Scotland's legal sector will be reformed along the lines of its counterpart in England and Wales if recommendations by the competition watchdog come into effect.
A list of sweeping changes proposed by the Competition and Markets Authority is topped by the creation of an independent body to regulate the legal profession, set standards and handle complaints. Separating regulation from representation – along the lines of England and Wales – will increase trust in the sector and result in better regulation, the CMA says. The Law Society of Scotland, which currently acts as both representative body and regulator, said this would drive up costs.
In the final report of its investigation into Scottish legal services, the CMA says there are signs the legal services sector in Scotland is not working, with consumer complaints increasing in number and the system unable to respond to new market pressures.
The CMA also proposes enabling alternative business structures by enacting legislation passed back in 2010. This will allow businesses owned and/or run by non-lawyers to provide regulated legal services.
The Law Society of Scotland must also review its guidance on price and service transparency, including setting mandatory rules for firms publishing this information, the CMA says.
It encourages the Scottish government to implement its recommendations ‘promptly’, while recognising the challenges of the current environment and impact of the coronavirus crisis.
CMA chief executive Andrea Coscelli said: ‘Our recommendations are intended to introduce greater liberalisation that could foster growth and innovation in the delivery of legal services which would help the sector grow.’
Many of the recommendations have been discussed in Scotland for more than a decade, and usually kicked into the long grass. But the case for doing nothing has been made harder as other jurisdictions – not least neighbouring England and Wales – have liberalised their markets and created separate regulators.
The Law Society of Scotland today make a distinctly lukewarm response to the CMA, saying it will consider the report's content carefully over the coming months. It agreed to taking forward price transparency proposals and said that pace was needed around introducing alternative business structures, to help firms access vital capital.
On the issue of wider reform, the Society said it was ‘no surprise’ to see the CMA back an independent regulator, having started its work with a clear policy position in favour of this.
John Mulholland, president of the Law Society of Scotland, added ‘At this of all times, we must avoid creating complicated new structures which add little benefit and only serve to build in extra costs for legal firms. All this would do is increase prices for consumers and undermine the competitiveness of the Scottish legal services market.’