LSB consults on streamlined prosesses for regulatory rule changes

21 July 2009 - Legal Services Board sets about shaping the processes that will underpin the new regulatory framework for lawyers.

The Legal Services Board (LSB) today proposes a new framework for approving future changes of regulatory rules and the awarding of Approved Regulator status.

The consultation is part of the major programme of reform for the sector, putting into practice measures to put the consumer and public interest at the heart of legal regulation, overcome barriers to entry and embed competition. One element of the consultation is the creation of a process to approve applications from new bodies who want to become Approved Regulators in the sector or from existing Approved Regulators who want to extend their regulatory remit to cover additional activities. The LSB’s proposals are designed to allow for such developments by setting a framework to manage entry and prevent any erosion of acceptable regulatory standards.

The consultation also seeks responses to plans for a new process governing changes to the framework of rules set by existing Approved Regulators. As the oversight regulator in the sector, a major priority for the LSB has been to ensure that consumers’ interests are protected whenever it is required to approve rule changes by the existing regulators.

Chief Executive of the Legal Services Board Chris Kenny said:

"The Legal Services Act had as its clear mission the opening up of the delivery of legal services to a more diverse range of providers, leading to embedding competition and raising standards. That means that regulation needs to move as quickly as a changing market place. The changes on which we are consulting today are designed to ensure that consumers can receive the benefits of these market developments whilst ensuring quality and independence in the sector. Our proposals should give existing regulators faster answers when they make proposals for change and set clear benchmarks for bodies thinking of becoming legal regulators for the first time."

The consultation exercise will run until 13 October. Following the consultation, a final version of the rules will be published with the intention that these will come into force when the LSB takes up its full powers in early 2010

Notes to Editors

1. The consultation paper can be accessed online.

2. The Legal Services Act 2007 provides for the creation of the Legal Services Board as the oversight regulator for legal services in England and Wales.

3. The legal profession currently consists of some 15,000 barristers, 108,000 solicitors and 14,000 individuals operating in other aspects of the legal profession such as conveyancing. The sector is currently valued at £23.34 billion per annum (total turnover in 2006).

4. The LSB oversees eight “approved regulators”, which in turn regulate individual lawyers and organisations. The eight approved regulators, designated under Part 1 of Schedule 4 of the 2007 Act, are the Law Society, the Bar Council, the Master of the Faculties, the Institute of Legal Executives, the Council for Licenced Conveyancers, the Chartered Institute of Patent Agents, the Institute of Trade Mark Attorneys and the Association of Law Costs Draftsmen.

5. The Legal Services Act provides that new bodies may become Approved Regulators either to regulate Reserved Legal Activities in the context of Part 4 of the Act or to go on and also become a Licensing Authority for Alternative Business Structures under the terms of Part 5 of the Act.

6. Currently, decisions on rule changes are made by the Lord Chancellor, taking account of the advice, where appropriate, of bodies including the OFT and the Legal Services Consultative Panel (the “LSCP”). In setting their rules, the Approved Regulators have obligations under the Legal Services Act to have regard to “best regulatory practice”, which will be an ongoing process because, as circumstances change over time, rules will need to change to reflect changing conditions. Moving from the Ministry of Justice, the Act requires that the function for approving these rules changes will be discharged by the Legal Services Board.

7. For further information, please contact Craig Jones on craig.jones@legalservicesboard.org.uk or on 020 7271 0068 / 07766 207395