FOR IMMEDIATE RELEASE
Monday, 20 July 2015
Delivering on deregulation: regulators rise to the challenge
Today the Legal Services Board (LSB), on behalf of all the legal services regulators of England and Wales, publishes the regulators’ collective response to the cross-economy drive to find more opportunities for deregulation.
Regulators have been working together to identify opportunities for deregulation, with the aim of reducing burdens on practitioners and freeing up the market to deliver economic growth.
The legal services regulators have collaborated in three key areas:
- reporting jointly on their collective progress on deregulation and market liberalisation since the Legal Services Act was passed in 2007, achieved through measures which remove barriers to market access, reduce regulatory burdens and promote consumers’ interests
- agreeing proposals for minor changes to the Legal Services Act to reduce regulatory burdens and improve the efficiency of regulatory processes, and
- sharing their knowledge and thinking on alternatives to the handling of client money. This is a key area of policy where, rather than seeking to prohibit the handling of client money, there is instead scope for introducing more choice for practitioners, reducing consumer harm and lightening regulatory burdens.
Sir Michael Pitt, Chief Executive of the Legal Services Board said:
"I wish to commend my fellow legal service regulators for the time and energy they have dedicated to this process. Ministers tasked us with a challenging assignment, namely to identify opportunities for deregulation and to free up practitioners and the market to do what they do best. This work has pinpointed specific proposals which, while modest in scale, would materially reduce burdens and help the regulatory system run more efficiently.
In working together in this way we, the legal services regulators of England and Wales, have shown that we understand and appreciate the context in which we are working. In particular, we recognise the need to seek new ways of delivering access to justice in an environment of on-going pressure on public spending.
We also understand that it is vital that the legal sector delivers its full potential for economic growth, and that it supports an environment in which all businesses - including small and medium-sized ones – can thrive. We believe that the regulators’ continuing work on deregulation makes a direct contribution to achieving these goals."
For further information, please contact Julie Myers (020 7271 0059).
Notes for editors:
- In July 2014, Ministers called a summit of legal services regulators, at which they laid down a challenge to the regulators to seek further deregulation in the sector. The LSB wrote to regulators in October 2014 following up on this summit and a subsequent meeting of legal services regulators.
- The LSB has collaborated with the other legal services regulators to deliver three documents to Ministers:
• A report on progress on deregulation and market liberalisation.
This report sets out the key achievements in the liberalisation of the legal services market since the introduction of the Legal Services Act 2007. These achievements have together had a big impact in terms of reducing the regulatory burdens on the market. But this report also shows that there are limits in some circumstances to what can be achieved under the current regulatory framework.
• Proposals for minor changes to the current legislative framework.
The legal services regulators have agreed a list of proposals for relatively minor changes to the current legislative framework that will help deliver growth in the legal services market.
• A briefing paper on alternatives to the handling of client money.
Not all legal practitioners are allowed to handle client money. But where they do handle client money, this represents a significant source of risk to consumers. As a consequence, the handling of client money also attracts a significant volume of prescriptive regulation, the costs of which are ultimately passed on to consumers. The legal services regulators have therefore collectively developed an overview report on what options there might be for practitioners who no longer want to handle client money.
A cover letter to Shailesh Vara MP, Parliamentary Under Secretary of State at the Ministry of Justice, from all legal services regulators accompanied these documents. Copies of each of these documents can be found here. - The legal services regulators have also participated in a collaborative process, facilitated by the LSB and independently chaired by Professor Stephen Mayson, to explore options for the more fundamental reform of the Legal Services Act. A paper that is the product of this process will be published shortly.
- The legal services sector regulators which participated in the cross-regulator collaboration are, the:
• Bar Standards Board
• CILEx Regulation
• Costs Lawyer Standards Board
• Council for Licensed Conveyancers
• Faculty Office
• Institute of Chartered Accountants in England and Wales
• Intellectual Property Regulation Board
• Legal Services Board
• Solicitors Regulation Authority. - The Act created the LSB as a new regulator with responsibility for overseeing the regulation of legal services in England and Wales. The new regulatory regime became active on 1 January 2010.
- The LSB oversees nine approved regulators, which in turn regulate individual legal practitioners. The approved regulators, designated under Part 1 of Schedule 4 of the Act, are the Law Society, the Bar Council, the Master of the Faculties, the Chartered Institute of Legal Executives, the Council for Licensed Conveyancers, the Chartered Institute of Patent Attorneys, the Institute of Trade Mark Attorneys, the Association of Costs Lawyers and the Institute of Chartered Accountants in England and Wales.
In addition, the Institute of Chartered Accountants of Scotland and the Association of Chartered Certified Accountants are listed as approved regulators in relation only to reserved probate activities. - As at 1 April 2015, the legal profession comprised 142,109 solicitors, close to 500 alternative business structures, 15,237 barristers, 7,848 chartered legal executives and 5,678 other individuals operating in other areas of the legal profession such as conveyancing. The sector is valued at £29.2 billion per annum (total turnover in 2013).