Bar Standards Board to allow barristers to conduct litigation

The Bar Standards Board has approved proposals to regulate advocacy focused legal entities and allow barristers to conduct litigation.

At a meeting last Thursday, the BSB decided it will regulate advocacy focused alternative business structures, legal disciplinary practices (LDPs) and barrister-only entities, but not multi-disciplinary practices.

It has placed restrictions on the types of structures that it will seek to regulate in order to keep the regulatory risks and their associated costs down.

BSB-regulated entities will not be able to hold client money or have external ownership.

All owners of BSB-regulated entities must also be managers, and there will be a 25% limit on non-lawyer owners or managers of ABSs regulated by the BSB.

A majority of the owners/managers of ABSs regulated by the BSB must be barristers or other advocates with higher rights of audience.

BSB-regulated entities and self-employed barristers will also be permitted to apply to conduct litigation, an area of work currently performed mainly by solicitors.

The board also decided to permit barristers to practise as managers or employees of ABSs regulated by other approved regulators, and to have ownership interests in ABSs, subject to the development of rules and guidance on managing any resulting conflicts of interest.

The BSB hopes it will be in a position to regulate such entities from mid-2013 once the Ministry of Justice has approved its plans.

Patricia Robertson QC, who led the BSB’s working group on entity regulation, said the estimated cost to the profession of delivering the proposal was in the region of £400,000, which amounted to less than £30 per barrister.

She said the BSB was not seeking to compete ‘head to head’ with the Solicitors’ Regulation Authority, but that its proposals offered a ‘genuine alternative’ to the SRA’s regime, specifically targeting advocacy and addressing the problems faced by advocates without burdening them with the cost of addressing issues that do not concern them.

She said the BSB would regulate ‘relatively simple structures’ so that the risks would not be radically different from those the BSB is already dealing with.

She summed up the rationale of the BSB’s approach as ‘specilaism, choice and cost effectiveness’.

On the decision to permit barristers to do litigation, Robertson said: ‘While the referral bar remains a useful resource, it’s not ideal for all areas under the sun. There is a clear demand from some sectors for a one-stop shop.

‘It’s time to grasp the nettle and remove the prohibition and allow barristers to apply for that authorisation,’ she said.

Robertson said that ‘in one sense fusion is already with us’, as barristers can for example already practise in LDPs, but she said the culture of the bar could best be sustained by ‘opening the tent and letting more people into it’.

BSB chair Lady Deech commended the proposals to the board, regretting only that progress towards their implementation could not be made faster.

In doing so she said: ‘Fusion is not on the agenda. What we’ve designed is something that preserves the bar’s independence.’

She said: ‘Nearly 75% of respondents to our consultation agreed that BSB regulation would be in the public interest. I am pleased that the board has listened to the profession and other respondents and taken this bold step forward, promoting choice and increasing access to justice.

‘We intend to target our regulation on advocacy focused entities, taking a risk-based and proportionate approach. We hope that this decision will allow barristers the freedom to react to changes in the legal market and permit them to devise new ways of working in order to remain competitive and better serve the public.’

Deech said that following this ‘momentous step’, there was still a lot of work to do.

The BSB will now develop a detailed regulatory framework, draft rules and options, including a further cost analysis, for consultation in the autumn.

Bar chair Peter Lodder QC said the board’s decision recognised the changing market place and the need to move forward, which he welcomed.

‘Regulation of advocacy remains with the BSB, and the maintenance of the bar’s character and identity are likely to be preserved by this step. It’s extremely important for access to justice,’ he said.

The move has been hailed as an attractive alternative for law firms who want to conduct litigation work.