The government has shut down any lingering expectations it will tear up the Legal Services Act and definitively ruled out major regulatory reform.
Justice minister Lord Keen of Elie QC said there will be no commitment to a formal review of the regulatory framework at this time and that now is not the right time to consult on legislative change.
The Competition and Markets Authority had recommended last December the Ministry of Justice undertake a review of the independence of regulators immediately and – longer term – to look again at the entire system of regulation.
Those proposals effectively look dead in the water after Elie rejected both in his formal response on behalf of the government to the CMA report.
The minister said the sector can do more itself within the existing framework, particularly the Legal Services Board, the oversight regulator, which is reviewing internal governance rules between the Law Society and Solicitors Regulation Authority and whether the Legal Services Act which created the current system is working as intended.
Elie added: ‘We want the LSB to be able to progress its important work, which could lead to further clarity around regulatory independence within the existing framework, without any unnecessary obstacles.
‘We will closely monitor developments in this area and will keep the case for further action under review.’
On a longer term review of the regulatory framework, Elie said the government agreed it would ‘continue to reflect’ on the potential need for such a review, but insisted that significant improvements can come through ‘incremental change’.
The government’s stance will come as little surprise, after the LSB said earlier this month it expected the government’s focus over the next three years will be on the UK’s exit from the European Union.
The Law Society president Joe Egan today backed the notion that a major overhaul was not necessary and should not be a priority.
‘As the UK faces one of the biggest constitutional challenges in living memory, uncertainty for business should be reduced, not increased,’ he added. ‘Any unnecessary disruption of the legal sector is not in the national interest.’
Elsewhere in his response to the CMA, Elie said the government accepted the recommendation that it should review the case for extending redress to consumers using unauthorised providers of legal services. Currently, clients using such providers cannot take any complaint to the Legal Ombudsman, whereas clients of regulated firms have that option.
‘We recognise that there is a disparity in the redress available to consumers depending on their choice of provider,’ added Elie.