The accountants’ regulator will battle the government through the courts in a bid to allow its members to carry out all legal activities.

Former justice secretary David Lidington rebuffed an application last September from the Institute of Chartered Accountants in England and Wales (ICAEW) to regulate all reserved legal activities.

The former lord chancellor expressed doubts that the organisation, which is also the representative body, could be a sufficiently independent regulator.

The ICAEW this week confirmed it has applied to the Administrative Court for leave to bring a judicial review of Lidington’s decision, which halted the increasing incursion of the accountancy profession into the legal services market. 

The government’s rejection was all the more surprising because the Legal Services Board, the oversight regulator, had recommended that the ICAEW be granted an extension to regulate all reserved legal activities.

In his letter confirming the decision, Lidington set out that any influence by a representative body of regulation was not in the consumer and public interest.

He added: ‘The proposed governance arrangements for regulating reserved legal activities would neither be sufficiently independent, nor be seen to be sufficiently independent, of the representative functions of the ICAEW and therefore [I] have concerns about its operation in the public interest and in protecting the interests of consumers.’

At the time, the ICAEW criticised the government for failing to seize an opportunity to liberalise and regulate the market for legal services in England and Wales and to encourage more competition.

The ICAEW is already an approved regulator of probate services and had planned initially to restrict its scope of regulation to ‘taxation services’. But Lidington said such a limitation would be difficult to manage and would make the process more complex.