Super-regulator the Legal Services Board is to investigate the governance arrangements between the Law Society and Solicitors Regulation Authority created by the 2007 Legal Services Act. The Law Society welcomed the review as an opportunity to clarify its statutory duty of oversight of the SRA.
In a statement posted on its website today, the LSB said: 'Following representations made to us by the SRA in response to a request from ourselves and taking into account the information that has been provided by both the SRA and the Law Society, the Legal Services Board has decided to commence a formal investigation into the internal governance arrangements between the TLS and the SRA.
'The investigation will consider whether the current arrangements between the TLS and the SRA are in line with Part 4 of the Schedule to LSB’s internal governance rules 2009 (IGR) which require that the internal governance arrangements must not impair the independence and effectiveness of the performance of regulatory functions. In particular we will consider whether the arrangements for the Business and Oversight Board have worked as the parties intended, enabling TLS to exercise appropriate oversight whilst complying with the IGR.'
It said it would share further details when the detailed scope of the review has been determined.
Law Society president Robert Bourns said: 'We now have the opportunity to clarify the Law Society’s statutory duty of oversight put in place following [Sir David] Clementi’s root and branch review and the Legal Services Act 2007.
'We support the Legal Services Board's role of ensuring the system as a whole is working for clients, the wider public and the profession.
'The Law Society does not fetter the SRA’s regulatory activities and responds to consultations as any other stakeholder. On a day-to-day basis the two organisations maintain good working relations and share support services such as finance and HR systems.
'We will work closely and collaboratively with the LSB on their review.'
Bourns also noted the Competition and Markets Authority's conclusion last year that it could find no harm as a result of the current arrangements for regulation and that a full market investigation was not necessary.