Improving access to justice: rationalising the scope of regulation
Legal services regulation is built around what are known as ‘reserved legal activities’. These are listed in the Legal Services Act 2007 and cover appearing in court, conducting litigation, certain conveyancing and probate work, notarial activities and administering oaths. Only persons authorised to do so and regulated by an approved legal services regulator can undertake these activities.
However, many types of advice work are not regulated as legal services at all. These include writing wills and providing advice in relation to mental health, welfare benefits, housing and most other general legal advice. Nothing prevents any new firm or individual from setting up shop and offering these “non-reserved” services to the public. They may do so outside of legal services regulation. Recourse to the Legal Ombudsman is only available to customers of regulated lawyers, thus denying a simple and effective route to redress for most of the common problems with legal services - such as overcharging, failing to keep the customer informed and not returning documents.
However, some lawyers such as solicitors, barristers, notaries etc are regulated in all their legal work whether it is “reserved” or not by virtue of their professional membership and accompanying title.
The result of this is that regulation is uneven for the same activity, which puts a bigger burden on lawyers whilst leaving consumers uncertain over the level of protection they will receive
Reviewing the scope of regulation
The Legal Services Act 2007 did not address the question of why certain services need to be subject to legal services regulation whilst others do not. The list of reserved activities arose in a haphazard fashion over a period of centuries and has never been subject to any form of systematic review. Importantly, the list has not been tested for its relevance to today’s commercial legal market and best regulatory practice.
Instead, the 2007 Act included a mechanism for the LSB to add or subtract from the set of reserved activities. We have issued a discussion document about our proposed approach for assessing whether or not a legal service should be reserved and the consumer protection that is required. We are also seeking views on legal services that may be in need of review over our next business cycle (2012-15) to inform our strategic planning.
Our approach has been designed to support consumer protection without inhibiting innovation or placing undue regulatory burdens on legal services providers. Regulation needs to be proportionate and targeted, focused on outcomes and reflecting real risks in the market. It needs to tackle risk of consumer detriment but, in doing so, stop short of creating an excessive burden that might stifle innovation or restrain competition. It is important to remember that reservation to specific types of lawyer – in other words saying that 99%+ of the population cannot do something - is an extreme form of regulatory intervention.
Will-writing
Responding to concern about will-writing services, in September 2010 we asked the Legal Services Consumer Panel to advise the LSB on the consumer experience in this area. Since then we have worked with the Panel to develop a greater understanding of the way the will-writing market operates and problems that consumers face, including a mystery shopping exercise comparing the quality of wills produced by different types of provider. This research was co-sponsored by the Solicitors Regulation Authority and the Office of Fair Trading. The Panel published its report in July 2011. It highlighted that consumers face many problems when buying a will. The mystery shopping research demonstrated that too many wills, written by both solicitors and unregulated will-writers, failed to reflect what the client intended and made other basic errors.
In light of the Panel’s report and the underpinning evidence we have decided to hold a statutory investigation into how best to protect consumers in the will-writing market and the closely associated areas of probate and estate administration. As required by the Legal Services Act, we have given notice of our decision to the Lord Chancellor, the Office of Fair Trading the Legal Services Consumer Panel and the Lord Chief Justice. We are also required to publish the notice - it can be accessed here. The notice sets out reasons for our decision to hold an investigation and a description (in general terms) of the investigation procedure.
We held a stakeholder workshop to inform the investigation in October. The LSB delivered a detailed presentation to introduce and frame the event and then issues were explored in break-out groups. A summary note has been prepared. A call for evidence for the investigation concluded in December. The call for evidence document and responses received can be found in the Consultations section of this web-site.
Research
In March 2011, we published a series of research papers about this area. The first piece of research was an analysis of the economic rationale for regulation by the independent researchers Dr Christopher Decker and Professor George Yarrow. A series of essays accompanied this, responding to the points raised in the economic rationale by prominent legal and regulatory academics.
In addition, we published a report by Opinion Leader into Consumer Outcomes. This sets out results from a series of focus groups and in-depth interviews where different types of consumers were asked what they expected from their interaction with their legal services provider. These findings were then reviewed by a number of expert commentators, including legal journalists, academics, regulators, representatives of professional bodies, individual and third sector users.
In April 2011, a paper launched at the Socio-Legal Studies Association (SLSA) conference set out thinking in this area.
Relevant contact
For more information please contact Regulatory Project Manager , who can be reached on 020 7271 0074.