
LSB: Signs of success
The Solicitors Regulation Authority (SRA), Bar Standards Board (BSB) and CILEX Regulation all require increased oversight, the Legal Services Board (LSB) has revealed.
It admitted too that some of the eight legal regulators it supervises “still actively resist our oversight of their work”.
The comments came in a paper to inform a discussion at this week’s full board meeting about the LSB’s approach to regulatory oversight – one of its core functions.
“Our relationships with some regulators have not always been straightforward and some still actively resist our oversight of their work,” it admitted.
“However, the combination of our current regulatory approach and relationship management has led to improvements, such as more comprehensive and more accurate assessments of regulators which provide us with the means to drive improvements in their performance and in meeting the regulatory objectives.”
It pointed to governance improvements made by IPReg, the Intellectual Property Regulation Board, and “its willingness to engage constructively with the LSB about how to do so”.
Other “signs of success”, the LSB said, included how it has “significantly increased” its knowledge and understanding of the practices used by the regulators, principally through being “more probing and demanding of information”.
The main way it checks regulators’ performance is through an annual assessment and the LSB said it has become “more frank” in its views, which has “not always been popular”.
“This has, nevertheless, provided a demonstration of our increasingly proactive oversight of the regulators.”
But in a veiled acknowledgment of questions about whether its oversight of the SRA was sufficient given the latter’s failures over Axiom Ince, the LSB said: “We know from our assessments, recent events and our relationships with regulators that there is still more for us to do to improve our oversight of their performance to ensure that they take account of the regulatory objectives and protect both consumers and the public interest.”
To enhance its approach, the LSB has introduced a new regulatory review team, developed its horizon-scanning function to “improve our ability to proactively identify and address emerging risks and opportunities early”, and put more resource into relationship management.
These changes would improve the LSB’s overall understanding of the risks each regulator presents and “better enable us to target our resources on those regulators which require increased oversight, which are currently the SRA, BSB and CILEx Regulation”.
The paper did not say why. The SRA’s performance around Axiom Ince and SSB Law have put it under the spotlight, while the BSB’s poor performance has been of concern to the LSB for some time. CILEX Regulation’s issues may relate to strained relations with CILEX over the latter’s ambition to change regulator to the SRA.
The LSB also cautioned board members that, no matter how effectively it performed as an oversight regulator, it was not a frontline regulator and it was they that were responsible for identifying specific risks presented by individual firms.
“It is unlikely that any horizon scanning activity that we would have undertaken would have identified the risks emanating from the Axiom Ince case, for example.”
Well…