Sackman: Focus on strengthening existing rules
The government has no plans to review the regulation of estate planning and trust-selling practices in the wake of the collapse of Anglo-Scottish law firm McClure, a justice minister has said.
McClure went into administration in 2021 and there have been particular concerns about its work on family protection trusts (FPTs), including potential mis-selling and the quality of advice given to clients.
Such work is not covered by the reserved legal activities.
According to Jones Whyte, another Anglo-Scottish firm that took on McClure’s work and staff, there were 18,840 FPT files at the point of the administration.
Last year, the Solicitors Regulation Authority said it was concerned that Glasgow-based Jones Whyte was taking “too long to deal with all of the issues [1] arising from McClure and that too many former clients are experiencing stress and frustration arising from delay and uncertainty”.
It subsequently rebuked [2] Jones Whyte for breaches of the accounts rules since taking over the work of McClure.
In response to a series of written questions from Liberal Democrat MP Martin Wrigley, including whether the Ministry of Justice would review the regulation of estate planning and trust-selling work, legal services minister Sarah Sackman said the government recognised “the financial loss, distress and uncertainty experienced” by former clients of McClure, especially around FPTs.
She said that since the firm’s collapse, there has been “continued work” by the SRA “to strengthen how risks to consumers are identified and addressed”.
“The Ministry of Justice keeps the statutory framework set by the Legal Services Act 2007 under review to ensure that it is operating effectively and protects consumers.
“The government has no current plans to review the regulation of estate planning and trust-selling practices. The department’s focus is on improving the enforcement of existing rules.”
Last November, Ms Sackman said the Mazur ruling was further evidence [3] of “a growing case for re-examining the legislative foundations of legal services regulation”, but there are no signs of this actually happening for the time being.