Lingering concerns about how legal services regulation works have prompted overseers to take another look at the rules underpinning the system.
The Legal Services Board says there is evidence of ongoing problems with the current regime, 10 years after it was enshrined in the Legal Services Act 2007. The internal governance rules (IGR) were created by the act and establish the co-existence of representative and regulatory groups, such as the Law Society and SRA, and the Bar Council and Bar Standards Board.
The LSB cites a ‘steady stream of disagreements’ about independence matters and a lack of ‘shared understanding’ about what functions the different groups should carry out. Options put forward in a new consultation range from incremental changes to a whole new IGR framework, with the legal profession given until 9 February to respond.
The LSB’s desire for regulation to be ‘structurally, legally and culturally’ independent is nothing new: the oversight body said as much in its vision for reform published in September 2016. Since then, the government’s will to review the system has seemingly waned. In a ’tailored review’ of the work of the Legal Services Board and Office for Legal Complaints published in July, the MoJ indicated that it was content to stick with the status quo for now.
Approved regulators continue to lobby for change notwithstanding and have raised 30 different issues with the current system since April 2014, when rules were last amended. The LSB notes there was ‘common awareness that there will continue to be issues no matter how the IGR are drafted, given the inherent tensions created by the legal framework in the Act’.
The consultation, which is wholly separate to the ongoing LSB investigation of governance arrangements between the Law Society and SRA, asks for evidence on the general nature, frequency and impact of disagreements on regulatory independence matters. The LSB suggests that public discussion between representatives and regulators about independence is ‘occasionally robust’, but this is sometimes perceived as harmful to the reputation of the legal sector as a whole.
Ongoing disputes, adds the LSB, suggest the current rules generate rather than reduce regulatory uncertainty.
The consultation asks whether extensive change – short of repealing the Act altogether – should be considered. New obligations mooted include separate invoices for the non-regulatory and regulatory components of the annual practising fee, and regulators being entitled to make the case for commissioning services from a third party that are currently shared with representative bodies.
Law Society president Joe Egan said: 'Solicitors are held to exacting professional and ethical standards by the Solicitors Regulation Authority, helping to maintain public confidence in the profession, which is essential to the effective operation of the justice system.
'This review provides a welcome opportunity to assess the internal governance rules for regulators introduced prior to the Legal Services Act of 2007, which effectively separated the regulatory and professional bodies. We will give careful consideration to the issues raised in the consultation and look forward to hearing the views of the regulators and other legal professional bodies.’