11 December 2009 - LSB Finalises Governance Rules Designed to Unerpin Public Confidence in Lawyers
The Legal Services Board (LSB) has today announced its final decisions on the framework of governance requirements designed to ensure the regulation of lawyers is carried out independently and in the public interest.
The separation of regulation from representation was one of the key drivers for recent reforms in the legal services sector, culminating in the Legal Services Act 2007.
To date, although the principle of independence has been embedded into the operation of Approved Regulators, detailed rules underpinning certainty in internal governance have been lacking. This set of decisions ends that situation, delivering for Approved Regulators a clear set of criteria to ensure that regulation is carried out independently of professional interests.
The finalised rules follow a detailed period of consultation over the last year. Responses from a range of organisations – including Approved Regulators, consumer organisations and other bodies involved with the delivery of legal services – have shaped the final framework.
The package of measures covers critical areas including the composition of regulatory boards, ownership of the appointments process for board members and the control and management of resources. The new framework of rules builds on the thinking included in the previous document, Internal Governance and Practising Fee Rules, published in September [see Notes to Editors for key recommendations].
The rules will come into force on 1 January 2010, when the LSB assumes its full range of statutory powers and the new regulatory regime comes into force.
Chairman of the Legal Services Board, David Edmonds, said:
“These rules, shaped by constructive consultation, are a proportionate response to the risks that were identified as far back as the Clementi Review. The new framework will
provide the underpinning for consumer and public confidence in the independent regulation of lawyers – something that is crucial both for the commercial wellbeing of practitioners and the wider public interest. The time is now right to turn from issues of constitution and governance to implementation.
Our focus, like that of the Approved Regulators, must quickly move on to the actual business of regulation now that these important foundations are in place”.
Notes for editors:
1. The Legal Services Act provides for the creation of the Legal Services Board as the oversight regulator for legal services in England and Wales.
2. The LSB oversees eight “approved regulator”, 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 Licensed Conveyancers, the Chartered Institute of Patent Agents, the Institute of Trade Mark Attorneys and the Association of Law Costs Draftsmen.
3. The full decision paper can be found at http://www.legalservicesboard.org.uk/what_we_do/consultations/2009/pdf/consultation_160909.pdf
4. The paper builds on the recommendations of the previous paper Internal Governance and Practising Fee Rules: Response to Consultation, released in September for consultation. This can be found at http://www.legalservicesboard.org.uk/what_we_do/consultations/closed/index.htm
Key recommendations of the previous paper included: A requirement that regulatory boards of Approved Regulators have a lay majority, whilst allowing flexibility on whether the chair is held by a lay person or a lawyer; Proposals to ensure the provision of resources generally, and corporate shared services in particular, is as effective, efficient and fair as possible; and An indicative timetable, which will see rules made by the board translated into action
5. The LSB is required to make rules under section 30 (internal governance) of the Legal Services Act 2007 before 31 December 2009. It proposes to make rules under section 51 (control of practising fees) at the same time. In making its rules, the LSB is required to act in a way that is compatible with the regulatory objectives fixed by section 1 of the Act, and in a manner considered by it most appropriate for the purpose of meeting those objectives.
6. Some Approved Regulators have already started work to separate their regulatory and representative functions. For example, the Law Society has established the Solicitors Regulation Authority (SRA) and the Bar Council has set up the Bar Standards Board (BSB).
7. 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 has been valued at £23.34 billion per annum.
8. For more information or interview requests please contact Craig Jones, Media and Public Affairs Manager at the LSB on craig.jones@legalservicesboard.org.uk or by calling 020 7271 0068 / 07956 226562.