Bones: Support for activity based regulation
There was a muted reaction to yesterday’s call from the Competition and Markets Authority [1] (CMA) for a review of legal regulation, with the Chartered Institute of Legal Executives (CILEx) the most prominent supporter.
Professor Chris Bones, the chair of CILEx, said: “Four years on from its original recommendation to review the regulation of legal services, we are not surprised that the CMA now sees a pressing need for one.
“The shortcomings that were apparent then have not been adequately addressed and we agree that Professor Stephen Mayson’s report earlier this year provides a pathway to reform.
“Although the legal services sector is becoming more competitive, there are still areas requiring intervention in the interests of consumers that can only be achieved by legislative reform.”
He said CILEx backed the idea of regulating lawyers by the work they did, rather than their professional title – “if you want your teeth seen to, you don’t visit a GP” – arguing that the rigidity of the current framework “does not recognise large pockets of existing providers”.
He added; “Without additional flexibility risks excluding also those novel technologies and solutions that lawtech can bring for the benefit of consumers and healthy consumer choice.
“Any review should look beyond the Legal Services Act 2007 to include legislation that imposes illogical and outdated restrictions on the market.”
These included a bar on CILEx lawyers certifying copies of a power attorney under the Powers of Attorney Act 1971 – despite being able to certify originals – and limitations on criminal advocacy work deriving from Courts and Legal Services Act 1990.
“Both have direct adverse effects on consumer awareness and competition,” Professor Bones said.
The other focus of the CMA report was on improving further the increasing transparency of providers’ prices, service standards and quality, and Professor Bones said its recommendations “have the capacity to make a significant difference to consumers”.
But he said there needed to be an “aggressive push” to make them happen. “We need more than baby steps to improve the experience of consumers looking for legal advice.”
He concluded: “There is much for the legal profession to be proud of. For those it serves, it does a great job. But the CMA’s recommendations will help open it up to the large swathe of the population increasingly denied access to otherwise affordable and effective legal representation.”
Sheila Kumar, chief executive of the Council for Licensed Conveyancers, said she was encouraged that the CMA had found there had been progress on providing consumers with better information in the two years since it and the Solicitors Regulation Authority introduced new transparency rules.
“We have begun work with other regulators on the next step, to identify quality information that can guide consumer choice.”
Law Society president David Greene welcomed the recognition of the progress made in providing information on price and services to consumers, but cautioned that any further reforms “should not only focus on competition outcomes, but also on the public interest, the rule of law, access to justice, and an independent, strong, diverse and effective legal profession”.
He said: “Competition plays an important part in driving down costs, but there are few winners in a race to the bottom where low cost may be offset by consumer harm.”
Mr Greene backed the CMA’s recommendation of a review of the unregulated sector, but in a pushback against major reform, insisted that the current regulatory framework was “sufficiently flexible for improvements to be made where there is evidence of consumer harm”.
Dr Helen Phillips, chair of the Legal Services Board, said the CMA’s findings echoed the conclusions of its State of Legal Services 2020 report, published last month [2].
“Although pricing information given to people who need legal services is more transparent, price competition is still weaker than we would wish to see.
“The range of prices offered by different providers for the same legal service hasn’t yet narrowed in the way we would have expected. There hasn’t been any progress on developing indicators that would enable consumers to assess the quality of providers.
“Although more people are shopping around for legal services, this trend has not accelerated since the CMA’s study in 2016.”
She said regulators and providers could do “much more” to improve competition and make it easier for people to find and compare services.
“We will work with the regulators and others to tackle the challenges identified and build a legal services market that better meets the needs of consumers.”
She did not address the CMA’s recommendation that the board carry out a review of the reserved legal activities, which its draft business plan [3] – currently out for consultation – says it is not planning to do.