Probate: Reservation does not protect client money
A full review of the reserved legal activities (RLAs) is not justified at the moment without a “fundamental” reappraisal of the Legal Services Act too, the Legal Services Board (LSB) has concluded.
But it will look to clarify the rules around conveyancing and probate work to ensure they are directed to the main areas of risk, which sit outside of the scope of the RLAs.
Currently, reserved instrument activities (mainly conveyancing), probate, litigation, advocacy, notarial activities and the administration of oaths are the areas of work that by law only authorised lawyers can undertake.
Last year, the LSB decided to undertake a ‘first principles’ analysis of the rationale for the RLAs to decide whether there should be a comprehensive review.
A paper for today’s meeting of the LSB’s full board said previous work on the RLAs found their justification inconsistent.
But after looking at each RLA, it said there was not a “strong case” for a large-scale review of the RLAs, given the resources it would consume, “without a more fundamental review of the legislative framework”
Though there have been some suggestions of political interest in a review of the 2007 Act, and the LSB has long called for it, its chief executive Matthew Hill said last year that it might not happen for one or two decades.
The review said the evidence did not suggest a significant shift in the justifications for rights of audience and conduct of litigation so as to create “a serious demand for change” at this time.
On conveyancing, the LSB cited the Competition and Markets Authority’s (CMA) concern that risks relating to client money or adequately ensuring title has changed hands were not covered by the reservation.
“Our recommendation is not to pursue changes to this RLA, but instead to satisfy ourselves that the respective regulatory arrangements operated by those regulators that oversee the RLA are sufficiently clear and effective in terms of the risks identified in the CMA review as an area with evidence of consumer detriment.”
The CMA pointed to the fact that handling client money was not reserved in probate either.
“Again, we will want to pursue these matters with individual regulators rather than seek change to the RLA itself,” the LSB said.
Notarial activities can only currently be conducted by notaries under the authorisation of the Faculty Office but this is in part due to the fact that other approved regulators have not sought to extend their reach to this work – except for the Institute of Chartered Accountants in England and Wales, whose application in 2017 was rejected by the Lord Chancellor, a decision upheld by the High Court.
The LSB paper said: “Greater consumer choice in relation to notarial activities could be provided without the need to make any change to the RLAs. This could be achieved by designating other approved regulators in relation to notarial activities.
On the administration of oaths, the LSB said it was “unlikely that any consumer gains from changes to this RLA would be worth the investment needed, particularly in light of the fact that costs to the consumer are already limited in many cases by statutory fees”.
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