Welcome to this edition of LSB news.

There have been a number of interesting happenings in the legal services market since the last edition (emailed on 22 May 2014), not least the fact that Sir Michael Pitt is now three months in the hot seat as Chair of the LSB.

One of the most forward-looking developments has been the hosting of a 'regulators’ summit' by the Ministry of Justice as part of its response to last summer’s review of legal services regulation – more below.

We’ve received applications from the Solicitors Regulation Authority (SRA) to change (amongst other things) their requirements on professional indemnity insurance and from the Bar Standards Board (BSB) to enable them to regulate entities. Both of these applications have generated significant interest.

On the research side we’ve published two reports which look at the challenging issue of how to tackle the large unmet need for legal services.

As with previous editions, I hope that you will find this bulletin informative. Please don’t hesitate to get in touch if you wish to discuss any of the issues highlighted in more detail.

- Chris Kenny, CEO

Sir Michael Pitt has been in post for three months. It has been a busy time as he has engaged with new responsibilities.

Amongst all of the activity, a key objective of his first '100 days' in post has been to build constructive relationships with the various legal sector stakeholders.

To this end Mike has met all of the legal regulators and representative bodies. He has also met the Minister, Shailesh Vara, at the Ministry of Justice, and representatives of the judiciary including the Lord Chief Justice.

Mike led the LSB delegation which participated in the MoJ’s regulators’ summit (see next section for more detail) and hosted a question and answer session for members of the legal press.

The next significant milestone in Mike’s diary is the Westminster Legal Policy Forum seminar – The future of legal services regulation on 4 September. He will be sharing a platform with Shailesh Vara, Professor Stephen Mayson, Professor George Yarrow and others. In his keynote address, Mike will outline his and the LSB’s current thinking on reform of legal services regulation, a topic which is guaranteed to generate interest amongst regulators, the profession and the many consumers who rely on legal services.

On 21 July, as part of its response to last summer’s review of legal services regulation, the Ministry of Justice hosted a summit of the LSB and legal regulators. The LSB viewed this as a welcome development.

Senior figures from each of the legal regulators attended the Summit and engaged in robust debate with Ministers and with each other. In what was a constructive discussion, one notable point of consensus was that the Legal Services Act 2007 has a number of shortcomings which, when the time is right, need to be addressed.

A follow up meeting will take place in the autumn at Chair-level (to be arranged by the LSB) which will look at (i) taking forward the discussion about progress that can be made under the existing regulatory framework, and (ii) developing thinking further on the future.

In the last six to nine months the LSB and the Legal Services Consumer Panel (LSCP) have been actively engaging in Wales and with Welsh stakeholders on legal services issues.

In October, the LSB will hold its first Board meeting outside London, in Cardiff, and will also hold a stakeholder event for all parties with an interest in legal services in Wales (the details of which are to be confirmed). Together with the LSCP, the LSB will also be appearing and speaking at the 2014 Legal Wales Conference (also October 2014).

The LSCP’s Briefing Note: Wales, from its 2014 Tracker Survey, outlines many of the key issues affecting legal services and legal services consumers in Wales which the LSB wants to highlight.

In addition, we are engaging with the recently established Justice Policy unit in the Welsh Government, which builds on existing relationships with the Finance and Professional Services unit of the Economy, Science and Transport Department.

We recently published two pieces of research looking at the challenging issue of how to tackle the large unmet need for legal services.

'How people resolve legal problems' uses a series of consumer surveys to identify why people take the decision they do when faced with a legal problem. When people classify a problem as severe they are more likely to seek advice from a law firm or the advice sector. However, even with the most severe problems, over half of individuals handled these problems alone, and only 9.4% actually sought advice from a law firm.

The second report 'Helping legal services consumers make better decisions' applies behavioural economics to evaluate different ways of helping people make better decisions about legal problems.

Both reports are designed to support regulators and other stakeholders as they develop policy to address these issues, and support our shared objective of increasing access to justice, increasing the public’s understanding of their rights and duties, and promoting the consumer interest. After all law is for citizens, not just for lawyers.

For more information about LSB research, please see our dedicated legal research webpages.

One of the key roles the LSB plays is to approve changes to the regulatory arrangements of the regulators of the legal profession. Part 3 of schedule 4 of the Legal Services Act 2007 provides the statutory basis for our doing this.

At any one time the LSB will be considering a number of applications. We aim to make an initial decision within 28 days of receipt of an application but this can be extended for anything up to 90 days if required. We also have the power to exempt certain general or specific changes from the approval process by issuing a direction.

Since its establishment, the LSB has made on average between 15 and 20 rules change decisions a year. Currently we are dealing with the following applications for LSB approval for amendments:

• the SRA’s regulatory arrangements on Professional Indemnity Insurance (PII) Minimum Terms and Conditions of Cover
• the SRA’s regulatory arrangements relating to Compensation Fund contributions, and
• the BSB’s regulatory arrangements to enable it to regulate entities.

The legal challenge being mounted to the High Court’s Quality Assurance Scheme for Advocates judicial review decision continues. The appeal to this decision began in the Appeals Court on 16 July 2014. A ruling is not expected before October.

On 14 July the House of Commons debated and approved the application of the Institute of Chartered Accountants in England and Wales (see here) to become an approved regulator for probate activities. This decision means that the legal sector has its first truly new approved regulator since the Legal Services Act 2007 came into force.

The ICAEW’s application to become a licensing authority for probate activates (see here) is scheduled for decision shortly.

29 July 2014

LSB grants SRA exemption from need for approval for alterations made to its Residual Client Balances Rules

23 July 2014

New LSB research on what we can learn from long term experiences in the personal injury legal services market

21 July 2014

LSB consultation on allowing the Council for Licensed Conveyancers (CLC) to amend its statutory framework

21 July 2014

LSB consultation on modifying some ICAEW functions

16 July 2014

LSB consultation on modifying some CIPA and ITMA functions

11 July 2014

LSB decision on the modification of SRA regulations on sole practice

11 July 2014

LSB updates to some Part 5 (ABS) rules (specifically no’s. 13, 15 and 16)

2 July 2014

LSB grants CLC exemption from need for approval for alterations made to its Licensed Bodies (ABS) Licensing Framework to reflect changes to the Rehabilitation of Offenders Act

25 June 2014

LSB consultation on modifying some CILEX functions

10 June 2014

LSB’s annual report published

9 June 2014

LSB grants SRA exemption from need for approval on changes made to training regulations

6 June 2014

LSB response to BIS data sharing for non-economic regulators consultation

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Web: www.legalservicesboard.org.uk
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You can also get in touch with the Consumer Panel, which advises the LSB on consumer issues, here.