Welcome to this edition of LSB news.

Autumn is always a busy time of year and this has been no exception for the LSB. There have been plenty of developments in the legal services sector since the last edition of LSB News. In September, the Chair of the LSB, Sir Michael Pitt - who took up post in early summer - made his first public speech at an event to discuss the future of legal services regulation. Outlining his first impressions of the sector, Sir Michael considered some of the areas in which both regulators and legal services providers might focus attention in the coming years. You can find a report of the speech, and a link to the full text, in the first article of this newsletter.

The LSB has also launched the first part of a substantial project examining the cost of legal services regulation. A survey of legal services practitioners, which was launched on Monday 13 October and runs until 28 November, will help to provide evidence for the direct and indirect costs of regulation to businesses and individuals. All members of the regulated community in the legal services sector are being encouraged to complete the survey so that the data reflects the current regulatory landscape as accurately as possible.

Meanwhile, the LSB is pressing on with wider initiatives to encourage frontline regulators to remove unnecessary regulatory obstacles from the market while maintaining appropriate and proportionate consumer protections. On 21 July 2014, Ministers at the Ministry of Justice held a summit of regulators to discuss deregulatory measures to encourage growth and innovation in the sector. As a follow-up to this summit, the LSB arranged a further meeting of the Chairs of the regulators, which took place at the beginning of October, to share thinking and initiate collaborative working in this important area. The start of October also saw the Court of Appeal deliver its ruling on the most recent appeal to the High Court’s Quality Assurance Scheme for Advocates judicial review decision, dismissing the appeal and confirming the decision in January in favour of the LSB.

We were particularly pleased to hold our Board meeting in Wales on 27 October, and to welcome legal services regulators and practitioners to a networking event which was held in Cardiff on the same day.

Finally, this is my last newsletter as Chief Executive of the Legal Services Board. I step down from the post on 28 November. I was delighted by the appointment of Richard Moriarty who takes up post on 1 February, as my successor. I am, of course, happy to deal with any points before my departure, as are Caroline Wallace and Julie Myers who will hold the fort in the intervening period before Richard’s arrival.

In the meantime, I would like to thank you all for your continuing interest in the work of the LSB and the legal services sector.

Chris Kenny, CEO

The Legal Services Board has appointed Richard Moriarty as its new Chief Executive.

Richard is currently Director of Regulation at Affinity Water and has a prior career spanning a number of regulated sectors across the economy, and brings a rich combination of public and private sector experience of the role of regulation in stimulating innovation for both providers and consumers.

On Richard’s appointment, Sir Mike Pitt, LSB Chair, said: "I am delighted that Richard will be joining the LSB. His experience, style and commitment to making the legal services market work well for legal services providers and consumers alike impressed the Board and make him well-placed to lead the LSB as it enters its next phase. I am looking forward to working with him."

He will join the LSB early in 2015.

On 4 September, Sir Michael Pitt made his first public appearance at a Westminster Legal Policy Forum event on “the future of legal services regulation”. In a very well-received speech he outlined some of his first impressions and thoughts regarding the legal sector.

In his speech, he said that he viewed many aspects of the English and Welsh legal system as needing nothing more than encouragement and freedom to flourish. However, he also suggested that there are other elements of the system which challenge both our senses of justice and of fair play.

On this point, he believes that the weaknesses in the Legal Services Act 2007 and their consequences can no longer be ignored. They need to be discussed and addressed by those with an interest in legal services, including the profession, regulators and politicians.

He also stated that more needs to be done to tailor legal services and reduce their costs to meet the needs of small businesses and people who are neither well-off nor eligible for legal aid. He suggested that consumer interest, risk and a focus on evidence should be amongst the highest priorities for regulators and practitioners.

For the full text of his speech please see here.

The LSB has just launched a significant project to examine what we are calling the “cost of regulation”. The results of this project, when it is complete, will help everyone involved in the legal services sector to better understand the costs associated with legal services regulation and its impact on the regulated community.

In carrying out this project and the associated research we want to establish a better evidence base for the impact of these costs which in turn we hope will help ensure that regulation is proportionate, targeted, and effective.

The research part of the project will gather data using a mixture of surveys and interviews with regulated legal services providers. This will help to provide evidence which will inform future work by policy makers and regulators alike, and represents a chance for practitioners in all areas of regulated legal services work to have their say on the direct and indirect costs of regulation which they encounter. They will also be able to provide feedback on the wider impact of regulation on their daily business.

Further information on the project can be found here.

The cost of regulation survey itself can be accessed and completed here. We are grateful to the regulators and our many partners in representative bodies for their support for the development of the survey and the encouragement they are giving to firms and individuals to respond to it.

On 2 October the LSB organised the first follow-up meeting to the Ministerial summit of regulators which took place on 21 July 2014. At the meeting in the summer, Ministers asked regulators to continue to seek further deregulatory measures to encourage growth and innovation in the legal services market.

Representatives at the follow-up meeting shared ideas and thinking on the challenge and agreed a number of actions, including:

• Production of a briefing document which maps existing work by the regulators to reduce unnecessary regulatory burdens while maintaining appropriate consumer protection
• Collaboration on identifying effective business models to avoid the holding of client money
• The Solicitors Regulation Authority will consider how best to share collective knowledge and learning from work on reviewing restrictions on in-house practice, facilitating entry of MDPs, reforming ABS ownership tests and reviewing business ownership restrictions
• The LSB will review its statutory decision-making processes in 2015-16
• The LSB will convene a group of executive representatives from the regulators to prioritise 5 – 10 “clausal changes” which could be made to the Legal Services Act; and
• The regulators will work collaboratively on developing legislative options beyond the Legal Services Act.

On 7 October the Court of Appeal delivered its ruling on the appeal against the High Court’s Quality Assurance Scheme for Advocates judicial review decision.

The Court dismissed the appeal against the outcome of the QASA Judicial Review, confirming the decision of the High Court in January this year in favour of the LSB.

In its 42-page ruling the Court found that the scheme is lawful in both domestic and European law, does not interfere with the independence of the advocate or the judiciary, and that the Legal Services Board’s decision to approve it was neither disproportionate nor unreasonable.

LSB Chair Sir Michael Pitt said that he was “pleased that the Court of Appeal comprehensively supported the High Court's judgement, which itself confirmed that the LSB followed the proper processes, and that the work of the BSB, SRA and IPS in developing the QASA scheme was valid.” He added that the LSB will continue its drive to raise standards in the legal sector. He went on to say that “advocates, given their vital role in the justice system, should expect to have the competence of their work assessed – and be seen to be assessed – in the interests of improving the quality of legal services.”

The LSB and the Legal Services Consumer Panel (LSCP) spoke at the Legal Wales conference in Bangor University on 10 October on the issue of “Consumer Issues in Legal Services” in Wales. The slide presentation which LSCP used can be found here.

With the assistance of the Regional Welsh Government, the LSB held its most recent Board meeting in Cardiff on 27 October 2014. This is the first time that the Board has met outside London since it was established in 2010.

To mark the occasion of this first meeting in Cardiff the LSB also hosted a “Meet the Legal Services Board for England and Wales | Dewch i Gwrdd â Bwrdd Gwasanaethau Cyfreithiol Cymru a Lloegr” reception that evening. The Head of Legal Services for the Welsh Government, Jeff Godfrey, the Chair of the LSB, and the Chair of the Legal Services Consumer Panel, Elisabeth Davies, addressed those who attended.

Attendees included the President of CILEx, representatives of the Welsh Government, the Welsh judiciary and the Legal Wales Foundation. Also in attendance were lawyers from numerous Cardiff based firms, Citizens Advice, and other interested parties.

The LSB joined the UK Regulators Network as an observer member on 9 September. This decision was taken in light of the mutual responsibilities which members have to protect and promote the interests of consumers, and to promote competition.

29 October

LSB approves the Intellectual Property Regulation Board 2014/15 practising fees application

21 October

LSB approves changes by the SRA to multi-disciplinary practices (MDPs)

17 October

LSB approves SRA application to change Compensation Fund eligibility criteria

13 October

LSB launches cost of regulation survey

9 October

LSB publishes report on regulatory restrictions on business ownership in the legal sector

8 October 2014

LSB approves the Costs Lawyer Standards Board 2014/15 practising fees application

19 September 2014

Warning notice issued to Bar Standards Board on its application to regulate entities.

10 September 2014

LSB approves the Council for Licensed Conveyancers 2014/15 practising fees application.

9 September 2014

LSB joins UK Regulators Network

3 September 2014

LSB response to Legal Services Consumer Panel ‘Fee-paying McKenzie Friends’ report & letter to Mrs Justice Asplin DBE

29 August 2014

LSB statement on Social Mobility and Child Poverty Commission report ‘Elitist Britain’

19 August 2014

Warning notice issued to SRA seeking more information regarding its PII rules change application

18 August 2014

LSB approves the Master of the Faculties 2014/15 practising fees application

15 August 2014

LSB approves SRA 2014/15 practising fees application

13 August 2014

LSB approves CILEx 2014/15 practising fees application

11 August 2014

LSB approves SRA application to change its regulatory arrangements for the level of contributions to the Compensation Fund

8 August 2014

LSB welcomes approval of Buckinghamshire County Council and Buckinghamshire and Milton Keynes Fire Authority as first local authority ABS

7 August 2014

LSB extends decision period for SRA application to change PII rules

Want to get in touch?

Legal Services Board
One Kemble Street
London
WC2B 4AN

Web: www.legalservicesboard.org.uk
Email: info@legalservicesboard.org.uk
Tel: 020 7271 0050
Follow us on Twitter: LSB_EngandWal

You can also get in touch with the Consumer Panel, which advises the LSB on consumer issues, here.