Treasury’s regulation shakeup heralds new era for ‘Tesco law’
The government is to consult on making regulators independent of representative bodies as part of moves to boost competition in legal services.
In a policy document published today, A better deal: boosting competition to bring down bills for families and firms, the Treasury says the proposal will create a ‘fairer, more balanced regulatory regime’ for England and Wales.
Ministers also want to make it easier for businesses such as supermarkets and estate agents to offer legal services such as conveyancing, probate and litigation.
But the Law Society warned that the setting of rules and standards for legal services must be independent of government. Any perception that this independence is threatened will damage the standing of England and Wales as a 'jurisdiction of choice', it said.
The proposals would effectively reform sections of the Legal Services Act which paved the way for alternative business structures - so-called 'Tesco law' - and established the current regulatory arrangements. They pre-empt justice secretary Michael Gove's plans for a review of the act before 2020.
The government plans to consult by spring 2016 on removing barriers to entry for ABSs and making regulators independent from representative bodies.
Sir Michael Pitt, chairman of the Legal Services Board welcomed the reform plan. ‘I believe these proposals will lighten burdens on business and streamline regulatory processes, all in the interests of delivering better services for consumers while promoting competition, deregulation and economic growth.’
The proposals are set out in a joint document signed by chancellor George Osborne and business secretary Sajid Javid. It covers issues ranging from the cost of school uniforms to reforming the dental contract in England. It also promises action to prevent 'exploitative terms and conditions' on contracts.
The document states: 'The government will continue to look for new ways to promote open and competitive markets. We will continually strive to ensure that the policies pursued by both central government and independent regulators deliver open and effective competition.'
Catherine Dixon, chief executive of The Law Society, said: 'We support the government’s aim to ensure a fair and balanced regulatory regime for legal services. However, public protection demands that setting of rules and standards for legal services must be independent of government and ensure that there is no perception, or otherwise, that government is interfering with the independence of the legal profession.
'Freedom from government intervention is an essential cornerstone of our justice system and of the rule of law.
'England and Wales is recognised as the jurisdiction of choice but that standing is threatened by any suggestion that government is able to fetter the independence of the legal profession. Any such perception, real or actual, would impact on our standing internationally and threaten the direct economic contribution of £23bn made by solicitors.
'The legal profession must be free to set the standards and rules under which it operates, and also own legal education and training so that standards are led by the people who practise law. Enforcement of the rules and standards set by the legal profession, by an independent regulator would also be a further protection of the public and consumer interest.'
She added: 'It is fundamental to any change that competition across the provision of all legal services must satisfy the aim to protect the public, enable access to services and maintain market confidence.'