The Law Society today warned government that now is the ‘wrong time’ for a shakeup of legal services regulation – stressing that the profession will be focusing on supporting its clients through a period of unprecedented change in the wake of last week’s Brexit vote.
Speaking before giving evidence to the House of Commons Justice Committee, chief executive Catherine Dixon pledged that Chancery Lane would work with solicitors, clients, the public and government to support a ‘calm transition’ after the UK voted to leave the EU.
But with the Ministry of Justice expected to consult soon on options including a formal separation of legal representative bodies from regulators, she pointed to the overriding need for stability.
The Law Society has a ‘vital role’, said Dixon, in convening legal expertise to help the country deal with the aftermath of last Thursday’s poll.
She alerted MPs to what she described as ‘the dangers of picking away at the finely balanced legal services sector when the sector, constitution and economy are going through a period of such unprecedented change’.
She also outlined some of the sectoral issues which will need to be addressed in the event that Article 50 is triggered.
These include: maintaining single market access; enabling solicitors to continue to practise across the EU; maintaining financial services passporting arrangements; ensuring the mutual recognition of judgments; maintaining extradition arrangements including the European Arrest Warrant; and maintaining England and Wales as the jurisdiction of choice, and the use of English and Welsh law across the globe.
The prospect of separation of the SRA and Law Society – along with other legal regulators from their representative bodies – was raised by the Treasury last year, with a consultation expected to be published this summer.
Dixon disagreed with her SRA counterpart Paul Philip during the evidence session over which body should ‘own’ professional standards, legal education and entry into the profession, and the awarding of the professional title of solicitor.
She said that in the event that government is minded to review legal services regulation, the Society’s vision is for the profession to own and drive professional standards.
She said this would enable the regulator to concentrate on setting regulatory rules to ensure effective market regulation and concentrate on addressing the ‘mischief’ from which clients need protection. However, this would require a wholesale review of the current arrangements and now is not the time to embark on such a review, she added.
There was a divergence of opinion over the need for reviewing the current arrangements. The SRA’s Philip said the retained links between bodies gave the perception of a lack of independence. But Dixon suggested that if there is a perception issue, then that issue should be dealt with, rather than undergoing wholesale change to legal services regulation as the regulator already operates independently.
Dixon said: ‘The current system is broadly effective. It would be the wrong time given the outcome of the referendum to undertake a full review of legal services.
‘Given the public and the legal profession would be going through a period of what would be unprecedented change, I would question whether now is the right time.’
Philip claimed that the SRA receives 20 calls a day from people who are confused about whether the regulator is part of the Law Society and said the status quo leads to a ‘crisis of confidence’.
He added: ‘Although we do treat them fairly and act in their interests, it is difficult to convince them that is the case when we are essentially part of the Law Society.’
Dixon responded: ‘If there is a perception issue the key thing is we tackle [it]. If the public is confused we should be focusing on public legal education – there is no dispute regulation is operating independently.
‘It would be a bit of a sledgehammer to crack a nut to go through a complex process of changing primary legislation to change what seems to be a perception issue.’
Philip rejected the idea the Law Society could manage and drive professional standards.
‘Professional standards must be owned by the regulator,’ he said. ‘It is the standards the public can expect of a solicitor: to give it to the organisation that represents solicitors would appear to be a conflict of interests.’
Both Philip and Dixon, as well as Bar Council chair Chantal-Aimée Doerries QC and Bar Standards Board director general Dr Vanessa Davies, who also gave evidence, rejected the idea of a single legal services regulator.
Philip said it was inevitable the profession would see ‘consolidation’ of the current nine different regulators, with a reduction ‘a foregone conclusion’.