Clementi: Law Society Council votes to set up company for regulatory activities

The Law Society is to set up a subsidiary company for its regulatory activities as preparations for the implementation of the Clementi report gather speed.


The Law Society Council voted last week by 65 to 17 to adopt the structure as its preferred end-state for Chancery Lane once the Clementi legislation is in place, rejecting alternatives such as simply delegating powers to a ring-fenced regulation board or the more radical step of two separate organisations.


A draft Legal Services Bill enacting Sir David's recommendations was included in this week's Queen's speech, with a White Paper expected later this year. The legislation is expected to come into effect by 2008 at the latest.


A report drawn up for the council by Sheila Spicer, director of the Society's transition programme and former secretary to the Clementi review, said having a new structure up and running would demonstrate to the government and the proposed legal services board that the Law Society was fit to be a regulator under the new regime.


It said giving the regulatory arm its own legal identity as a subsidiary would leave both sides of the Society freer to make the strategic and operational decisions needed in support of their activities. 'Overall this may be seen as providing the clearest separation under the unitary Law Society,' the report added.


The Society is in the process of setting up an interim structure - approved by the council at a meeting in January - that will see the creation of two new boards, one dealing with complaints and the other with regulation generally. These will operate in shadow form from September, and come into full effect in January next year. The council will have a pure representation function.


Law Society chief executive Janet Paraskeva said the council's decision demonstrated the Society's commitment to an independent regulatory structure.


She said: 'This is a clear basis to prepare for the forthcoming legislation.'