Regulators will need to present 'sound evidence' for in-house reform
Regulators will have to produce a ‘sound evidence base’ should they wish to reform regulatory arrangements for in-house lawyers, the Legal Services Board has said.
Publishing a ‘statement of policy’ today, the oversight regulator highlighted the key principles it will consider when asked to approve regulatory arrangements in relation to section 15(4) of the Legal Services Act.
Section 15(4) states that an employer who employs someone to carry on a reserved legal activity, does not itself carry on a reserved legal activity unless part of its business is to provide that reserved legal activity to the public.
The LSB said the principles in the statement were designed to provide ‘additional focus’ on areas identified in the board’s thematic review as important in improving regulatory arrangements for in-house lawyers.
LSB chief executive Neil Buckley (pictured) said: ‘We know some regulators are planning to review their current restrictions. The principles in our statement of policy provide transparency about the issues the LSB considers essential in this reform.’
The Solicitors Regulation Authority outlined its plans to implement a new regulatory approach for in-house lawyers as part of its response to an LSB discussion paper, Are regulatory restrictions in practising rules for in-house lawyers jusitified?, which was published last February.
The LSB will expect an approved regulator that chooses to apply regulatory restrictions additional to those required by the act ‘to justify its approach with a sound evidence base’.
The board said it will be ‘particularly’ important to understand ‘any evidence that informs a decision by an approved regulator to place regulatory restrictions on in-house lawyers providing unreserved legal services to consumers unconnected to the employer’s business’.
Regulators must confirm that they have considered ‘any consequential effects’ of their proposed changes ‘in light of wider regulatory arrangements’.
The impact of alterations on consumers must also be considered.
Where new or revised regulatory arrangements pertain to section 15(4), the board will also consider how regulators ‘communicate and keep consumers informed about the benefits and consequences of different regulatory approaches for in-house lawyers’.
The LSB adds that nothing in the statement ‘should be seen to specifically restrict or deter’ the provision of pro bono services by in-house lawyers within the current legislative framework.