The peer tasked by Chancery Lane with reviewing legal regulation has hit out at what he described as the ‘great unwashed’ – unregulated advisers who provide services that solicitors ‘are much better qualified to provide’.

Lord Hunt of Wirral was speaking in Manchester at the first in a series of roadshows publicising his preliminary report, published last week (see [2009] Gazette, 7 May, 1). About 50 solicitors attended last Thursday’s event.

Will-writing is one service in his sights: ‘You get people working from an offshore island persuading someone to go down the cheap route and after death it’s found to be all wrong and there’s no remedy,’ he said. ‘The same basic regulation should apply.’

In the second phase of his consultation, Hunt is to consider whether regulation should be extended to will-writing and probate, among other areas.

Hunt also revealed that Sir David Clementi, original architect of the reforms that will give rise to alternative business structures in 2011, is ‘extremely worried’ about how ABSs will be regulated.

He warned solicitors against burying their heads in the sand. ‘I suspect the profession doesn’t think it [ABSs] will affect them or it will all go away. We need to face up to the challenge. Who will regulate them? The SRA and other frontline regulators are not queueing up.

‘The SRA should not be forced to regulate ABSs but they [ABSs] need to adhere to the highest standards. There’s a momentum behind ABSs to which we must adjust.’

Hunt said the recession will hasten the formation of ABSs. ‘In the recession, when banks are not prepared to lend, [raising] equity capital is a serious attraction. ABSs will come much quicker than we think.’

According to Hunt, the Office of Fair Trading believes that the legal profession is a ‘massive vested interest’, and practitioners can expect no respite from the chill wind of the market.

‘They would love to see supermarkets offering legal services,’ he added. ‘I said to the chair of the Competition Commission: "But what about small shops?". But they don’t worry that small firms will close.’

The next Hunt roadshow takes place today in Cardiff.

In the debate, fears were raised about the possibility of ABSs and ‘traditional’ law firms being regulated differently, and the absence of a level playing field.

Hunt warned of the threat that other bodies, notably the Institute of Chartered Accountants in England and Wales – which has already expressed interest – could fill the vacuum. ‘There are great dangers that other bodies will step in,’ he said. ‘But chartered accountants are only regulated to do audits, not to advise in key, restricted areas where we work.

‘I am very worried at the prospect of competing regulators,’ Hunt added. ‘Part of my solution in the report is that areas of work where you have to be solicitor should be extended, but the Office of Fair Trading will be very opposed to that.’

Hunt went on to stress that the profession needs to find a solution to the perception that legal fees are excessive. ‘There’s a feeling that solicitors milk the system, which is by and large unjustified,’ he added. ‘I am also concerned that anyone dealing with claims management companies should be subject to equivalent regulation and I’m not sure we’ve got the regulation of CMCs right yet.’

The Smedley report, which complement’s Hunt’s review, proposes a discrete regulatory regime for corporate firms. One questioner suggested this could leave small firms and sole practitioners feeling ‘beleaguered’, adding: ‘Are we in danger of creating a "them and us" mentality?’

‘What has given regulation a bad name is a "box-ticking" mentality,’ Hunt replied. ‘You’ve seen that with the FSA and the banks. We need the same basic standards over and above which there is a code of ethics that characterises solicitors. At the same time we have got to bear in mind the pressure and stress encountered by the vast majority of solicitors, in small firms.’