MPs urged to support review of Legal Services Board

Vineall: Disappointed by LSB’s refusal to agree to review

MPs were last week asked to support a review of the Legal Services Board (LSB) after the chair of the Bar Council said the oversight regulator had refused to agree to one.

The session of the justice select committee also saw the chair of CILEx Regulation say that his counterpart at the Bar Standards Board (BSB) had copped out by refusing to comment on the issue.

The evidence session on legal regulation was overshadowed by outspoken comments from solicitor MP James Daly about CILEX, but committee chair Sir Bob Neill in particular probed the witnesses from the Bar Council, BSB, CILEX and CILEx Regulation about the Legal Services Act 2007 and the LSB.

Bar Council chair Nick Vineall said that, when the Act was passed, arm’s-length bodies like the LSB were subject to triennial reviews. But the rules have since changed and there has been no review of the LSB since 2017. It was time, he said, for another.

“You can’t mark your own homework indefinitely,” Mr Vineall said. “We think every regulator – every confident, transparent regulator – ought actually to welcome external review of its activities every now and again.

Conservative MP Edward Timpson KC said the committee had heard concerns that “maybe [the LSB’s] going beyond its remit”.

Mr Vineall highlighted three areas where this might be the case. First was the LSB’s support for a single regulator for legal services. “I suppose they’re entitled to that view, but that’s not the job that Parliament’s given them. And there’s a risk that they regulate as they think the system ought to be, rather than they regulate in accordance with the system which Parliament created.”

Second was the internal governance rules (IGRs) set by the LSB to ensure that the independence of regulators that are also representative bodies, such as the Law Society, Bar Council and CILEX.

“There’s also a danger if the IGRs drive too strong a wedge between the approved regulator and the body to whom it delegates its functions because then you move away from that compromise which Parliament achieved [with the Act] of not having totally separate regulation but also not having it within the professions. We have a concern that the IGRs are driving too great a wedge.”

The third was the LSB’s “tendency to correctly identify problem issues” – such as SLAPPs and non-disclosure agreements – and then take the lead because it saw “a regulatory problem”, when actually they were not. SLAPPs, for example, needed a legislative solution.

The “danger” was that, by looking at problems through a regulator’s prism, the LSB would assume “that there must be a regulatory solution”.

Mr Vineall said the Bar Council had sought the LSB’s support for a review, “and I have to say I was disappointed that they didn’t”.

The Ministry of Justice had also disagreed when the Bar Council asked in early 2023, saying the time was not yet right but that it would keep the matter under review. “So we feel that the time now is right and we would welcome your support.”

BSB chair Kathryn Stone was asked if she would support a review of the LSB, but she declined to express a view. “I think, chair, that’s a matter entirely for you,” she told Sir Bob. “It would be inappropriate for us [to comment].”

When CILEx Regulation chair Jonathan Rees was asked the same question later on, he said: “I won’t do Kathryn’s cop-out answer. I think it is time for a review of the LSB… I think it does many things really well. And I want to put on the record that the work they do around EDI [equality, diversity and inclusion], around vulnerable consumers, around technology is really good.”

But there was “a legitimate question” about the LSB’s rising budget – up 9% this year and set to go up by 14% next.

“That has a huge impact on us because essentially we have to find out of a budget that we’ve already set another £70,000 to pay for them, which actually means we’ll have to reduce two members of staff. The question is, is it right that the oversight regulator should be taking money away from the frontline regulators?”

Mr Rees added that he would like to see the LSB “be more of a coach, actually working with the regulators trying to spread best practice and not, as it were what I sometimes describe as a pedantic headmaster ticking us off”.

In his evidence, CILEX chair Professor Chris Bones also agreed about the need for a review, saying he shared some of the Bar’s concerns, “particularly around overreach”.

“Our view is that the Legal Services Board at the moment have a very broad view of their role and definition. I’m not sure they’re the best people to really take a view on climate change or judicial appointments.

“I think they could and should have a much more focused view about the performance of the delegated regulatory bodies for which they are accountable.

Unlike the other witnesses, Professor Bones said the 2007 Act also needed reviewing, arguing for regulation by activity rather than profession.

The committee will tomorrow take evidence from the LSB, as well as the Law Society and Solicitors Regulation Authority.

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