Accountancy firms' expansion into the legal services sector took a significant step today as regulators opened the way for them to provide more reserved activities.
The oversight legal regulator, the Legal Services Board, has published a letter to the lord chancellor formally recommending he approve applications from the Institute of Chartered Accountants in England and Wales (ICAEW) to be an approved regulator and licensing authority 'in respect to all reserved legal activities'.
The ICAEW already regulates firms offering probate services and has been encouraged by its members to gain powers to approve further reserved legal activities such as conduct of litigation. The ICAEW says its regulation of probate activities has working well since being granted in 2014.
The LSB's decision announced today relates to two applications by the ICAEW to extend the scope of its licensing activity to: conduct of ligitation; rights of audience; reserved instrument activities; notarial services and administration of oaths. 'In relation to the first three of these activities, the ICAEW's applications confirm that it would restrict the scope of its regulation to taxation services,' the letter states.
Dr Helen Phillips, interim chair of the LSB, affirms that the board 'is satisfied that the criteria for granting an approved regulator designation application have been met.'
Duncan Wiggetts, executive director of professional standards at the ICAEW, said the LSB's approval was a positive step for consumers. 'The LSB’s decision is evidence of the role that it is playing in transforming the provision of legal services and giving more choice to the consumer,’ he said.
The ICAEW consulted on the applications last year, contacting the top 30 member firms for views.
In its applications, the organisation said the Competition and Markets Authority, which concluded a study into the legal services market last year, backed the move, suggesting it would strengthen competition for reserved legal activities and enable accountancy firms to offer a more integrated service.
These benefits, the CMA was reported to have said, would outweigh concerns raised about the potential for confusion about the scope of taxation services and accountants’ minimum professional indemnity cover compared to that of law firms.
The Legal Services Consumer Panel broadly supported the applications but raised concerns in relation to the independence of the ICAEW’s regulatory function, advising that there should be a clear distinction between what an ICAEW-accredited provider can and cannot do.
It emerged in documents supporting the applications that the ICAEW eventually wishes to develop legal education courses and assessments with a professional provider experienced in handling the LPC and BPTC. In short term, however, it will rely on other bodies’ qualifications.