A single independent regulator should be set up for the entire legal sector to end the current outdated and confusing regulatory regime, the consumer watchdog has advocated.
In the first high-profile response to the Ministry of Justice’s review of legal services regulation, the Legal Services Consumer Panel says today that four years of evidence show that the existing regulatory framework has failed to protect consumers or support a competitive market.
The panel says clients have to find their way around a ‘labyrinthine maze’ of regulation, with even regulators and the ombudsman unsure what areas they cover.
The panel was responding to an ongoing review led by the MoJ into how to simplify legal services regulation.
Members of the profession have called for a trimming down of regulators and the panel’s intervention will put pressure on ministers to consider scrapping the existing system.
Elisabeth Davies (pictured), chair of the panel, said: ‘The current system isn’t delivering the outcomes consumers need, offering instead a confusing maze where consumers can find themselves at a dead end due to gaps in redress and regulation. The patchwork of regulators is an expensive duplication of effort that no one can afford to persevere with.’
Competition between regulators, the panel claims in its response, may encourage a ‘race to the bottom’ and inhibit cooperation between them.
The panel also notes that lawyers are subject to multiple regulatory regimes because of a duplication of responsibilities, adding complexity and cost to legal services.
The panel wants consumers to have guaranteed access to the Legal Ombudsman for resolving disputes about all legal services transactions.
And it is advocating a single regulator, entirely independent of the profession, to give consumers confidence that regulation is protecting them and making it easier to make informed choices,
Davies added: ‘The Legal Services Act introduced welcome competition reforms but passported in the old regulatory structures – as the market and consumer behaviour has changed, these structures now look increasingly out-of-date. They need to be replaced by a new system, delivering the required consumer outcomes and reflecting how modern consumers use legal services.’
In a written statement to the House of Commons in June, justice minister Helen Grant said the regulation review would encompass the ‘full breadth’ of the legislative framework, including 10 pieces of primary legislation and more than 30 statutory instruments.
Scrapping existing bodies such as the Solicitors Regulation Authority or Legal Services Board is unlikely in the immediate future, but the consumer panel is not the first to suggest a single regulator as the best long-term option.
David Edmonds, chairman of the LSB, told a House of Commons committee in March that a single regulator for barristers and solicitors could be created within three years.