Regulators remain worryingly disunited in the wake of Mazur, judging by the caustic response of CILEX to the Legal Services Board’s final report on the fiasco. But the institute has its own agenda
This week’s postscript to Mazur did little to engender confidence that regulators are back in lockstep after the chaos and confusion that followed last September’s bombshell judgment. On Monday, the Chartered Institute of Legal Executives responded with remarkable belligerence to what was always going to be a critical report from the Legal Services Board on the leadup to the debacle.
Chief executive Jennifer Coupland accused the umbrella watchdog of overlooking its own failures. The LSB missed ‘multiple opportunities’ to provide clarity on the regulation of litigation before the disaster unfolded, she alleged. Moreover, the board itself appeared to have learned nothing: ‘It is disappointing that this first substantive LSB output since the publication of Richard Lloyd’s “Independent Public Bodies Review of the LSB” report shows no substantially changed approach to the oversight of regulation going forward,’ she complained. Coupland even accused the board of lacking empathy for Mazur’s casualties – those legal workers who lost their jobs, retired early or faced demotion.
Order was largely restored, of course, when the Court of Appeal ruled in March on CILEX’s challenge to the High Court ruling. To widespread relief, the court decided that unauthorised staff do not ‘carry on the conduct of litigation’ merely by performing tasks that fall within the statutory definition, provided they act under the supervision of an authorised person.
The LSB’s final report on the role of frontline regulators in issuing guidance and ensuring compliance in relation to litigation conduct appears to be the final word on Mazur. It found that regulators responded constructively and updated their guidance following both judgments - but said previous advice to the profession ‘had varied in clarity and consistency’.
'It is insensitive to the reality of the position… in concluding that there was no evidence of detrimental impact, without properly acknowledging the human impact on the many lawyers and firms'
Jennifer Coupland, Chartered Institute of Legal Executives
In 2022, when regulators ‘developed differing interpretations’ of the [2007] act, there was ‘insufficient cross-regulator engagement to resolve that inconsistency’.
‘Several’ regulators assessed levels of non-compliance with the act to be low or insignificant. However, the LSB’s review found these assessments may have been ‘undermined by limited knowledge of how supervision of unauthorised individuals was operating in practice’.
The LSB report orders frontline regulators to: provide clear guidance on what adequate supervision looks like in routine and higher-risk cases; share draft guidance on reserved legal activities with other watchdogs before publication, to support consistency; collect better data on reserved activities; and improve risk assessment.
The board itself will undertake a review of guidance across other reserved legal activities, to ‘identify and address any similar inconsistencies’.
‘We [CILEX] know that we have not always got it right. As the master of the rolls observed during our appeal, regulators appeared to be operating “in their trenches” and that needs to change,’ said Coupland.
‘CILEX is, however, disappointed with some aspects of the LSB report: firstly, there is insufficient acknowledgement of the LSB’s own failings. There were multiple opportunities for the LSB to intervene or take action to provide the clarity that the sector clearly needed. Secondly, it is insensitive to the reality of the position following the High Court judgment in concluding that there was no evidence of detrimental impact, without properly acknowledging the human impact on the many lawyers and firms who experienced real negative consequences and significant stress.’
Professional politics are in play here, clearly. Responding to Lloyd’s report earlier this month, CILEX called for a wholesale review of the Legal Services Act as it unveiled a five-year strategy to establish legal executives as the third branch of the profession. Parity of esteem remains the end game for CILEX and it is not there yet. Now that superintendence of legal executives by the Solicitors Regulation Authority is a dead letter, a single regulator of legal professionals (and the abolition of the LSB) would likely aid its cause.
The Solicitors Regulation Authority’s own response to the LSB’s report was more sanguine. The regulator said it recognises the ‘concern and confusion’ among solicitors and firms that followed Mazur. The watchdog published updated guidance in June.
‘We are pleased to see the LSB stating that this guidance provides “detailed advice for the profession, including case studies to help professionals exercise their judgement as to what is appropriate in their circumstances”,’ it added. ‘We do though accept that more can still be done to provide even greater clarity to the profession, in particular in relation to legal service regulators reaching unified positions and consensus on the advice being given ahead of any publication.’
For the Law Society, vice president Brett Dixon said: ‘Since [the Court of Appeal] ruling, we have supported our members by publishing detailed guidance and practical advice on delegation, supervision and professional responsibility. The focus now should be on providing clear, practical guidance on what effective supervision looks like.’
2 Readers' comments