Accountants’ body applies to regulate all reserved legal activities

Topics: Regulation and compliance,Tax law,Alternative business structures

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The Institute of Chartered Accountants in England & Wales (ICAEW) today applied to regulate all reserved legal activities.

The representative body says it wants to promote more competition in the legal services market and build on the success of its existing probate regulation activity.

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The ICAEW could become a licensing authority within 14 months for all reserved legal activities: conducting litigation, rights of audience, reserved instrument activities, notarial services and administration.

But the organisation has stressed it will restrict the activities it regulates to taxation, and is not seeking authority to accredit firms wishing to offer a wider range of services.

Vernon Soare (pictured), ICAEW executive director of professional standards, said the number of applications for authorisation and licensing for probate received during its first year as a regulator ‘far exceeded’ expectations. The ICAEW currently regulates 168 entities offering probate services.

‘Any further authorisation for legal services by ICAEW will be restricted to the service line of taxation,’ said Soare. ‘This is an obvious natural link for our members in traditional accountancy practices.

‘The ability of our members to expand their offerings to include legal services has already increased access for consumers, which is clearly in the public interest.’

The ICAEW has applied to the Legal Services Board for authorisation and has also started a three-month consultation with its members.

Research conducted by ICAEW shows the taxation work carried out by accountancy firms would be complemented by all the further reserved legal activities. For example, accountants currently represent clients before the tax tribunals of the General Regulatory Chamber (GRC) and provide expert litigation support to solicitors relating to both civil and criminal actions.

Debt-recovery cases brought by HM Revenue & Customs and complex winding-up proceedings would also be possible for ICAEW-regulated firms if the scope is extended.

As with probate, firms authorised or licensed for further reserved legal activities will be required to carry a minimum of £500,000 professional indemnity insurance per claim. A compensation fund will also be in place, although it has yet to receive a claim since it was set up more than a year ago.

The organisation says it has 146,000 members in more than 160 countries.

Readers' comments (25)

  • OMG, is this the beginning of the end?

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  • This competition among regulators to regulate lawyers is just a race to the bottom. We don't see this in the medical profession.

    I think the same philosophy applied when they decided to have Exam Boards competing with one another. All that's happened is that the exam grades have ballooned as our kids' rankings in international education league tables has tanked.

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  • Ooh, this is fun. Can I play?

    I'd like to propose myself as the regulator for newsagents, luthiers and driving instructors.

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  • As a solicitor, I love this guy. He is exactly what we do not have or indeed ever have had, as a representative. He may not get what he wants for his members, but make no mistake, he is testing the boundaries and expectations, to see what he can maximise for the ICAEW. TLS is utterly and completely incompetent in comparison. Did you see how Soare came out fighting for his Insolvency Practitioner members ?

    Look at the Junior doctors, then look at us solicitors. Timid, gentlemanly souls, who at most get 'troubled' by events, whilst we are steamrollered !

    I totally agree about the lack of independence of the ICAEW's regulatory function and, having experienced it, I do feel that it lacks independence and protects its members. I also cannot understand the anti-competitive advantage they have with the lesser level of PII they have to carry for Probate.

    But instead of having a go, perhaps we need to wake up and smell the coffee. Our biggest problem is and has always been, fellow lawyers, particularly the Judiciary, tearing strips of its own, which as we can see, has led to the frenzy visited upon us, this last few years.

    I have said that the competition between regulators, should be leading to the SRA softening its ridiculous draconian stance to the benefit of solicitors, but look for example at the ridiculous cases brought before the SDT of late. Is it any wonder you would not want to be regulated by these self serving, extorionately expensive morons.

    We will not help ourselves with Sep Rep or escrow accounts and I wonder whether the Achilles heel of Mr Soare's grand vision will be PII. Just yesterday on of his members told me the PII premium for 5 offices was £10k. A solicitor colleague with 5 offices I know currently pays just under £70K. Will the ICAEW want all the downsides ? I wonder, but as I have said before, don't underestimate the accountants, they will and indeed are, taking business away.

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  • This is no problem as all industries evolve and move on. Watch out Google , Apple and Intel the solicitors of UK are about to muscle into your space with their dynamite weapon called The Law Society.

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  • Enough is enough. The same legal services do not need different regulators, there should just be ONE.

    Rebrand the SRA into the "Legal Regulation Authority", and make everyone who wants to provide legal services subject to them alone.

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  • I have a good friend who two years ago had the misfortune to be interviewed under caution regarding VAT matters. He wanted to be accompanied by his accountant but was not permitted to be, and didn't see the point of a duty solicitor - a police station clerk would have been neither use not ornament.
    There are, I would think, a considerable number of people who do not see the need for solicitors in matters pertaining to tax; they would prefer a tax barrister instructed by their accountants.
    All I'm seeing here are demands for restrictive practices a Longbridge shop steward could only have dreamed of.

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  • Accountants' enthusiasm for competition is an interesting concept when 99% of FTSE 100 companies are audited by 4 firms. And they don't see the need to separate regulation from representation.

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  • As one commentator noted PII will be the Achilles' Heel for accountants as claims appear (in due course) and they find they are not adequately covered. The likelihood of this happening is quite substantial given that accountants can be let loose on probate work after a 3-day accreditation course.

    In the interim solicitors should employ accountants and stop referring work to external accountants who seek to take their work. This is already happening and there is a real risk that accountants, by going down this route, will be biting the hands that feed them.

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  • Accountants are still smarting that the court declined to allow them to assert legal professional privilege for their clients - this is the back door to outsmarting the justice system
    Accountants took tax work from solicitors (it was easy peasy - like taking sweets from a child) and ever since have fancied they are tax law supremoes- then in giving advice which is regarded as aggressive tax avoidance ( if not in many cases tax evasion advice) seek to protect their records against the snooping eyes of HMRC.
    Nice try

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