Radical plans to create a single legal services regulator and potentially overhaul the title of solicitor are unveiled by the Legal Services Board today.
The LSB says its proposals would see the abolition of all existing regulators – including itself – and the creation of a single body accountable to parliament. But the Law Society has criticised the proposals as 'mistimed' and not in the public interest.
As part of the blueprint, all ties between representative bodies – in solicitors’ case the representative Law Society at Chancery Lane – and regulators would be severed.
Regulation would be fundamentally changed under the plans, with the focus on the type of legal service being offered rather than the lawyer doing it: services perceived as high-risk would be subject to greater regulation, with a lighter touch applied to low-risk activities.
LSB chairman Sir Michael Pitt (pictured) said the time is right to move on from the ‘stepping stone’ of the Legal Services Act of 2007 to a fully-formed regulatory regime.
‘The existing arrangements are confusing and complex,’ he said.
‘We believe that a single regulator, covering the whole legal services sector and accountable to parliament, would be best placed to deliver improvement, deregulate, save cost and act strategically.’
The LSB says insufficient competition in the legal sector is restricting choice, increasing cost and hampering innovation in the sector.
The body wants an independent review to determine which activities should attract sector-specific regulation in future, on the grounds of risk to the overarching objective of safeguarding the public interest. The LSB cited legal advice to asylum seekers as an example of a high-risk activity needing greater scrutiny.
The oversight regulator says that regulation should no longer be based on professional titles such as solicitor and barrister, although it acknowledges the ‘strong brand power’ of these titles means the shift to activity-based regulation will have to be done in stages.
‘We do not consider that regulation should in future be based on professional title – in other words, regulatory rules should not be targeted at particular professionals solely on the basis of their professional titles,’ says the LSB paper.
‘Title acts at the moment as a barrier to sustainable entry to many parts of the market for legal services because a prospective market entrant without the title in question may find it difficult to gain market share.’
There appears some debate about whether the regulator or representative body should have control of awarding professional titles.
In the short term, the LSB said this should be left to the regulator, with concerns that giving responsibility to representative bodies could result in ‘gold-plating of entry standards’.
Longer term, however, there may be benefits in consistency in the handling of protected titles across different professional groups, says the LSB.
Pitt admitted that the LSB had not carried out any cost assessment for the changes, despite the paper noting extra costs and uncertainty as possible risks of radical change.
There are question marks over the government appetite for repealing the Legal Services Act.
Asked this week by former solicitor and Conservative member Alberto Costa MP if she had a view on further reform of legal service regulation, the lord chancellor Liz Truss responded: ‘I don’t. It is something we will be looking at.’
Responding to the LSB's paper, Law Society president Robert Bourns described the proposals as 'an interesting contribution to a future vision for legal services regulation'. But he added: 'We simply don't think that it is in the public interest to embark on such changes at this time.
'During a period of unprecedented change for Britain, following the vote to leave the European Union, we must maintain confidence in all our markets and in particular the legal market. Uncertainty should be reduced, not increased.
'Embarking on regulatory change in this climate, especially when there is broad recognition that the current regulatory framework is working, is misconceived.'
He added: 'The jurisdiction of England and Wales is recognised across the world as being independent, fair, dependable and responsive. Other jurisdictions are keen to muscle in.
'We don't believe there is any demand from clients or the legal professions for the LSB’s proposals.'
The Solicitors Regulation Authority today said the LSB had set out a ‘strong case’ for independent regulation but urged caution about making wholesale changes.
Chief executive Paul Philip said: ‘We should pause for thought when considering fundamental constitutional changes, such as regulating by activity or moving to one single regulator.
‘Some consolidation across the regulators seems to be inevitable in the longer term, but we must avoid being distracted by rewriting the regulatory landscape to the extent that we blight much needed market reforms.’