LSB Newsletter - October 2016

Issue 8 :: Autumn 2016

Welcome to this edition of LSB news.

Legal services matter to all of us. They are needed by individuals, often at critical moments in our lives. They also can be essential for businesses, large and small. The broad range of services make up a vital part of the economy. It is an internationally successful sector and a significant contributor to jobs and investment. Last year (2015) the UK wide legal sector turnover was £32 billion per annum - which is up 23% in cash terms since 2012.

Over the last year we have worked hard to ensure the sector delivers more effectively for consumers, citizens, and authorised legal practitioners. We at the Legal Services Board believe that in addition to achieving as much as we can under the current framework, further progress could be made if there were changes in the way legal services are regulated and we have outlined our ideas in our vision for future legislative reform (see below).

In this edition, we also highlight some of the recent research we have published as well as our current consultation on diversity guidelines for the sector. That consultation is particularly timely given the Lord Chancellor's recent announcement on diversity in the profession.

There is also some information on our forthcoming visit to Manchester on 24 November. Please do join us if you can.

Neil Buckley, Chief Executive.

In early September the LSB published its vision for legislative reform of the regulatory framework for legal services in England and Wales.

In 2014 Government Ministers challenged the legal services regulators to free up the legal services sector so that it works better for citizens, reduces burdens on practitioners and delivers economic growth.

This vision paper, which has generated a healthy level of interest and debate in legal services circles, is a further LSB response to this challenge, building on a paper published in July 2015 setting out options for change.

Upon publication, Legal Services Board Chairman, Sir Michael Pitt, said:

“We believe that further legislative reform would help address current challenges and make the step change needed to improve outcomes for consumers, citizens and practitioners. There is a need to tackle the tensions inherent in the existing framework.

A new legal framework will help secure the important public interest outcomes that the legal sector delivers, such as maintaining the rule of law and ensuring access to justice. It will also strengthen the contribution the legal sector makes to the reputation of the UK as a great place to do business”

For more information on the vision paper please go here.

The Competition & Markets Authority launched a study in January this year into the legal services market to see if it is working well for consumers and small businesses.

It published its interim report setting out its initial findings and emerging views on possible remedies in July.

The LSB has responded to say that it supports the interim findings and agrees with the initial conclusions reached by the CMA.

We concur with the CMA’s analysis that there is a need for more transparency of price and service quality. The absence of such indicators inhibits consumer choice, reducing the incentives for providers to compete on price, quality and innovation.

We also highlighted other features of the legal services market that affect competition in the sector such as the fact that consumers tend to purchase legal services infrequently and at times of distress and that there is a legacy of strong professional identities that may impact upon competition.

Our recommendation, and one which we are making to the CMA, is that market transparency measures should be combined with both short and long term regulatory reform to ensure that the market both works in the public interest and responds better to consumer needs.

For more information please see our response here and further details about the CMA investigation here.

The LSB launched a consultation on diversity in the legal sector on 29 September. This three month consultation is intended to ensure that the diversity guidance which the LSB has issued for legal service regulators remains up to date and relevant. The changes proposed are designed to give regulators the freedom to develop their own approaches to improving diversity throughout the profession.

The work on diversity has followed LSB guidance published in 2011 on data collection. Our aim five years ago was to develop the evidence everyone in the legal sector needed to make judgements on the diversity profile of the legal services profession. The next step, which this consultation looks to help implement, is to take the data that has been collected and use it to make positive policy changes.

In all our work, we aim to be proportionate. The guidance we issued in 2011 was, necessarily, very prescriptive. We gave regulators a series of deadlines to achieve certain things. Now they have achieved what was required, we are proposing changing our focus to a more ‘outcomes focused' approach.

These outcomes are not going to be easily achievable. The thinking is to allow regulators to assess their respective professions and policies and carry out the work they think can have the most effect on diversity and inclusion. Collecting data alone will not bring about change – change will only happen once the data is used to alter attitudes. With this consultation we are proposing giving regulators the freedom to explore ways they can achieve the outcomes we have suggested.

This consultation closes on 2 December. The consultation document can be found here.

The LSB has published some important research in the last couple of months. Pick of the bunch would be the research focusing on how the market is working, the unregulated parts of the market, and the legal needs of citizens.

The Evaluation: Changes in the legal services market 2006/07 - 2014/15 report focuses on the latest changes in the legal services market since the Legal Services Act 2007 (the Act) was passed. Overall, it shows signs of some positive changes with the legal services market growing. It does however, highlight the continued scale of unmet legal need and conclude that progress has been slow towards delivering better market outcomes and access to justice for all. For further information please see here.

We published research focusing on the unregulated parts of the legal services market with a view to better understanding this section of the market. The report; Unregulated legal service providers: Understanding supply-side characteristics showed that the unregulated sector is neither as big nor as problematic as some have suggested with approximately only 5% of providers of legal services falling into the category of unregulated.

The LSB and the Law Society jointly collaborated on the largest ever survey of legal needs in England and Wales, with nearly 8,000 people responding to Ipsos-MORI's questions about how they dealt with a range of over 16,000 legal issues. Legal issues focused on included wills, probate, conveyancing, consumer rights, arrest, debt and more complex legal concerns such as relationship breakdown.

All of the LSB’s past legal research can be found here.

The LSB together with the Legal Services Consumer Panel (LSCP), the Legal Ombudsman (LeO) and the Competition & Markets Authority are heading to Manchester in November to discuss price transparency and consumer websites in legal services.

The LSB will hold its third Board meeting outside London, and its first in Manchester on the afternoon of Thursday 24 November.

This will be followed by an event which is taking place in partnership with the Manchester Law Society and the University of Law.

The event will focus on the work of the LSB, the LSCP and LeO, who will each outline their respective priorities and issues of interest, along with a questions and answers session.

All who wish to attend are welcome. You can register here.

The Chairs of the Legal Ombudsman (Steve Green) and the Legal Services Consumer Panel (Elisabeth Davies) have announced that they will be stepping down from their positions.

Steve Green was an inaugural member of the Legal Services Board where he took a lead role on the board in setting up the Office for Legal Complaints (OLC) and the Legal Ombudsman. He assumed the Chair of the OLC in 2014 and will be stepping down at the end of his term of office on 31 March 2017.

Elisabeth Davies was appointed as an inaugural member of the Consumer Panel on 1 November 2009 and acted as interim Chair from 1 August 2011 to 1 August 2012 when she was confirmed as permanent Chair.

Recruitment for the Chair of the Office for Legal Complaint / Legal Ombudsman has just started and his/her appointment will be made with the approval of the Lord Chancellor and following a pre-appointment scrutiny hearing before the Justice Select Committee. More information on this appointment can be found here.

The process to appoint a new Chair of the Consumer Panel started in the late summer and it is expected that the new Chair will be announced before the end of the year following approval by the Lord Chancellor.

LSB consults on revising its diversity guidance for regulators

LSB publishes its vision for legislative reform of the regulatory framework for legal services in England and Wales

LSB responds to CMA's legal services market study interim report

For further information on recent publications, decisions, etc. which the LSB has made please see here.

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