My prediction for 2026: the world is going in one direction, the solicitors’ profession in the other, and something may snap. The world’s direction is towards deregulation. (World? – not the whole world, but that part of it with which we are usually compared, in other words the US, the EU and UK.)
In the UK, the government has expressly said that deregulation is part of its growth agenda. It wants regulation for growth, not for risk – which effectively means less regulation. As an example, it published a steer a few months back for the Competition and Markets Authority (CMA): 'This steer sets out how the government expects the CMA to support and contribute to the overriding national priority of this government – economic growth. The steer applies to all aspects of the CMA’s activity over which it has discretion'. This has been replicated elsewhere.
Nevertheless, the approach has not been easy, three steps forward, two steps back. Some quangos have been abolished by the government, others created.
The government’s uncertain approach is perhaps nowhere more clearly highlighted than in its handling of one of our riskiest challenges, the onrush of AI. How to balance risk and growth? The UK has been juggling the uncertainties, and is unsure which side to back: the regulation of danger (faulty AI decision-making! AI killer drones!) or the invitation of growth (data centres! UK innovation!). In consequence, little has been done, in the hope that growth will come rushing in, and the dangers somehow go away. One thing seems certain: we are wobbling towards less regulation, without a horizontal law with an overall AI regulator.
In the past, the EU has been notorious for its boldness of stride towards more regulation, and is now bold again in its strides backwards to less. There are no fewer than 10 ongoing regulatory simplification packages, called omnibus proposals: for instance, on cars, the environment, data and AI, chemicals, defence, agriculture and sustainability, hoping to free up businesses and the economy.
As I have explained before, both the UK and the EU have also seized on justice as an engine for growth. The emphasis here has been mainly on the importance of the rule of law, and, in the EU, on digitalisation of justice.
The US is a different case. Deregulation is taking place at pace, but for one principal reason: Trumpism, whether translated into America First (promotion of the freest AI) or the dismantling of environmental regulation (through lack of belief in human-caused climate change or a wish to exploit US energy sources, regardless of consequences).
When we look at how solicitors are faring in England and Wales, our trajectory is running against this world-wide trend. To take developments just from the last few weeks:
- We are faced with dual regulation, with the Financial Conduct Authority regulating the anti-money laundering side of our practice, and the Solicitors Regulation Authority the rest of our professional duties, raising important questions about the burden and cost of double regulation, including double reporting;
- We are faced the with the prospect of the re-introduction of annual accountants’ reports, this time having to be filed by our accountant directly with the SRA, with our being required to file an annual record of compliance, subject to penalties for late or incomplete declarations;
- HMRC has confirmed that conveyancers who submit Stamp Duty Land Tax returns must register as tax advisers, in accordance with legislation introduced in the Finance Bill 2025-26, which will come into effect from May next year.
Where is deregulation, or indeed regulation for growth, in this piling on of further compliance duties?
So, the treatment of solicitors directly contradicts the government’s overall stated aim. The government trumpets the contribution of the legal sector to the economy, in its industrial and trade strategies, it being among a handful to be picked out.
And, as if blind to this, more regulation rains down on the legal sector at the same time.
Partly, the reason is that our regulator is unable any longer to control the legal services market that it has created – see its devastating role in the recent Axiom Ince and SSB scandals.
Partly, it comes from a lack of authority from the government in not insisting that its deregulatory agenda be obeyed, even in a key economic sector. Is there anyone in the government tasked with this?
To return to where I started: as my New Year prediction, I don’t see this state of affairs improving next year. No-one is paying attention to it, neither the regulator nor the government. The divergence between the government’s aim and solicitors’ regulatory journey will continue to grow until … something snaps.
I hope that the snap is on the government side, when it sees that no sector can continue to shoulder increasing regulatory burdens without consequences.
Jonathan Goldsmith is Law Society Council member for EU & International, chair of the Law Society’s Policy & Regulatory Affairs Committee and a member of its board. All views expressed are personal and are not made in his capacity as a Law Society Council member, nor on behalf of the Law Society
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