Ethical push: LSB statement of policy to be finalised
A professional ethics network is to be launched in a bid to achieve the “cultural step-change” required to improve standards among lawyers.
The initiative was announced in the Legal Services Board’s draft 2026/27 business plan, a consultation on which also revealed that its budget is set to fall slightly next year, following an 8% increase in the current year.
“Our evidence gathering – including from the Post Office Inquiry and our own report into the misuse of non-disclosure agreements – reveals how the conduct of some legal professionals can fall short of ethical standards, such as when their independence is compromised or when they mislead the courts,” the LSB said.
“Such conduct harms consumers and diminishes the rule of law, eroding public trust. It is critical that professional ethics are understood and upheld by the legal profession.”
Last year, the LSB consulted on a draft statement of policy on upholding professional ethical duties, which will be finalised in the coming year. It will then be for the frontline regulators to respond to its demands.
The draft plan said: “To achieve the cultural step-change required, we need a shared commitment not only from regulators but from the sector more widely. To this end, we will convene a Professional Ethics Network (PEN) to help to embed the principles in the statement of policy.
“The PEN will be used to identify emerging ethical challenges and develop and share recommendations about how professional ethics is understood and applied across the sector.”
Consumer protection was another key policy priority for the year. “This is led by the evidence from our market surveillance work which indicates that mass claims (including third-party litigation funding), the potential for collapse of large law firms, and activities in the unregulated sector, particularly the increased use of AI, are key risk areas…
“We want to ensure that, as the legal services market changes, consumers can make informed choices about the services they use and are aware of the risks.”
The consultation revealed that an LSB bid to the government-backed Regulators’ Pioneer Fund for a voluntary standards regulatory sandbox for AI-powered business-to-consumer lawtech did not succeed.
But the oversight regulator said it was “actively exploring alternative routes to take this work forward”.
The sandbox would “explore the potential for voluntary standards to support the provision of high-quality AI-powered consumer facing legal tools for those with legal need, supporting responsible innovation and ensuring users have the information they need to make informed choices about the risk and suitability of these services for their needs”.
The LSB pledged a revised approach to oversight of the frontline regulators that would remove “unnecessary burdens on regulators who are performing well, while taking robust action where this is needed”.
This will include monitoring the performance of the Solicitors Regulation Authority (SRA) and Bar Standards Board on a quarterly basis. “We expect to see improvements from both regulators,” it warned.
The LSB has, however, put on hold a review of the internal governance rules, which aim to ensure the independence of those regulators whose powers are delegated from the official ‘approved regulator’, such as the SRA from the Law Society.
Overall, the rules were “operating as intended” and, given “potential litigation which may have implications for the IGR” – this is likely a reference to CILEX looking to switch regulator to the SRA and CILEx Regulation challenging it – “we have paused further substantive work on the evaluation until the outcome of these proceedings is known”.
The LSB’s proposed budget for 2026/27 is just under £5.7m, a 0.5% reduction on the current year.
This “reflects our success in securing higher than forecast reductions in our accommodation costs, which means our running costs will be lower in future, as well as the fact that the 2025/26 budget included some one-off costs which will not be incurred in future”.
It also planned to use technology, including AI, to improve internal efficiencies.
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