Legal Services Bill: government moves to quell anxiety after strong opposition from Lords


The government last week agreed to take a fresh look at the Legal Services Bill to ensure that the proposed legal services board (LSB) is a light-touch supervisory regulator.



Responding to a host of opposition amendments during the latest committee days of the Bill in the House of Lords, Department for Constitutional Affairs minister Baroness Ashton said she will consider bringing forward amendments herself 'if, on reflection, having reread our debates and having discussed the matter with noble Lords, more needs to be done' to clarify the LSB's role.



She insisted that the government's intention is that responsibility for day-to-day regulation should rest with the approved regulators, such as the Law Society and Bar Council, so as to retain their experience and knowledge. She added: 'For that model to work, we need a strong and independent oversight regulator that does not second-guess and micro-manage those approved regulators that are performing their functions well.'



The minister accepted in principle a Conservative amendment that would require the LSB to consider representations from the professional bodies in the same way that the Bill says it must from its proposed consumer panel. Under the Bill, if the LSB disagrees with the panel, it must explain why.



She also agreed to have another look at the wording of the clauses under which the LSB can fine approved regulators, and take over regulating a particular area itself. 'We want the board to remain an oversight regulator, except in those circumstances where it has no choice but to regulate itself,' Baroness Ashton said.



On other issues, however, the minister did not accept the case for regulating either paralegals or will writers - while also revealing that the Association of Law Costs Draftsmen and Council for Licensed Conveyancers have expressed interest in regulating probate work in future.



Baroness Ashton refused to yield over the speed of introducing alternative business structures (ABSs), despite concerns about the impact on small law firms and as a result access to justice, saying only that time must be taken to ensure that the regulatory and licensing framework is properly set up before ABS licenses are issued.



The former Lord Chief Justice, Lord Woolf, told peers: 'There is no doubt that large businesses could provide legal services in a novel and interesting way. But that could - unintentionally, perhaps - have a devastating effect on those who have traditionally provided services in rural areas in particular.'



The minister rejected calls for an ABS pilot. 'It would be wholly inappropriate and wrong to pick a few companies and give them, and nobody else, the chance to do this,' she said.



She also disappointed the City of London Law Society, which sought an exemption from the ABS regime for firms which just bring non-lawyer managers, such as the heads of finance and marketing, into their partnerships. Saying these would be 'low-risk bodies' which receive special treatment in the Bill anyway, Baroness Ashton said: 'I am not sure that, by exempting them, I could be confident that we had any form of regulation over the managers in question... As managers, they are in an undeniably important position to influence the business.'



Neil Rose