Remove Red Tape

Legal Service – Regulating the Legal Professions

The Government is responsible for the legislation which sets out the regulatory framework within which lawyers in England and Wales operate. As the legal profession is independent, the Government has no day to day responsibility for supervising or regulating lawyers. This is done through approved regulators e.g. the Solicitors Regulation Authority. However, it does establish the framework under which these regulators sit.

You can find all regulations that relate to regulating the legal profession below to the left. Please note that this theme will close for comment on 5 July 2012.

Go back to the Legal Sevices theme landing page by clicking here.

Tell us what you think should happen to these regulations and why, being specific where possible:

• Could their purpose be achieved in a non-regulatory way (eg through a voluntary code?) How?
• Could they be reformed, simplified or merged? How?
• Can we reduce their bureaucracy through better implementation? How?
• Can we make their enforcement less burdensome? How?
• Should they be left as they are?

3 comments on “Legal Service – Regulating the Legal Professions”

1. T Chaize on July 5, 2012 at 4:33 pm said:

   Please stop regulating. Nobody wants more regulation and it serves no purpose.
2. Simon Crawshaw on June 30, 2012 at 9:29 am said:

   There are too many regulators and regulations governing the legal profession. The Legal Services Board should be abolished. It seems to have no other function than to regulate the regulators (SRA, BSB etc). My experience as a barrister in independent practice who also sits on the training for the bar committee of the Bar Council is that almost any policy the BSB wishes to implement seemingly has to be “approved” by the Legal Services Board.

   So, to give a recent example, having conducted an extensive research and consultation exercise spanning two years, the BSB decided to implement an aptitude test for the Bar training course. An incredible amount of work went into this project from the BSB and Bar Council over several years. The policy was simply blocked by the Legal Services Board, no doubt after some “lobbying” on behalf of the course training providers.

   In summary, I have not seen a single positive or worthwhile function performed by the Legal Services Board. The purpose of a regulator to regulate other regulators is entirely unclear.Comment Tags: Legal Services Board
3. Nick Lockett on June 27, 2012 at 8:59 am said:

   The existence of multiple regulators is significantly problematic within the provision of legal services. The author of this, and has worked for many years as a barrister and subsequently re-qualified as a solicitor. Due to family connections, the author is also very familiar with the operation of claims management companies, although not directly involved in the operation of any CMCs.

   The authors experience in moving from controlled by the Bar Council to control by the Law Society/SRA is that there is a significantly greater degree of red tape and of control and administrative burden as a result of Law Society/SRA regulation than exists, for exactly the same direct access work, under the rules of the Bar Council. this creates a materially unlevel playing field and is anti-competitive. Similarly, when the same work is done under CMC regulation, the burdens are even more lower than direct access work covered by the Bar Council. this means that solicitors have the highest burden of all players in the market and consequently clients pay the highest costs ( as clearly structural costs are passed on) even though exactly the same work is being carried out. the Law Society/SRA have argued that there is a different character to the services provided by solicitors in order to justify their own significant administrative existence.

   in the same way that there is a single regulator for financial services, there should be a single regulator for all legal services. whilst there is a special case for maintaining a lightweight version of the current bar Council because of the special circumstances that a barrister works in, this should be by a voluntary code of conduct and a very lightweight regulatory overview covering only advocacy. As part of reduction of red tape, the bar Council “new code” should apply to all legal services providers conducting advocacy at any level of legal services. this would ensure a level playing field. This Bar Council role would of course be part of the new single legal regulator (LSA).

   all other matters Of the provision of legal services should fall within the new superregulator, whether general barristers services outside advocacy, solicitors services or CMC or its equivalent.

   at present, the unlevel playing field adds significant costs to the overheads of solicitors and the year-on-year expansion of the SRA will rule book adds to the significant additional overhead costs. These are passed onto sisters clients either directly or indirectly. Lighter weight regulated CMC’s are increasingly entering into all areas of non-advocacy legal services creating a 2 tier regulatory regime. This is inappropriate. A single regulator, with a single regulatory rulebook would level the playing field for all legal services providers.

   There are anachronisms within the SRA rulebook and structure. These stem from the period when, in order to get legal services, one had to deal with a solicitor. The world has moved on since these days.
   - Even in the high risk field of conveyancing, there are now solicitors and licensed conveyancers. They operate under different rule bases which is inappropriate and anti-competitive. A single legal regulator would mean equal protection and equal structural costs for all parties involved in conveyancing.
   - while it is accepted that all legal services providers should be subject to compulsory professional indemnity insurance cover, the current playing field is again entirely unlevel because the SRA maintains a list of approved insurers. CMC is can obtain professional indemnity insurance from a much wider group of insurance providers. Barristers also obtained their insurance from a different group. All legal service providers should be able to take insurance from the same pool of insurers. Either the PII that is taken out is adequate or it is not and it should not matter who the regulator is.
   - in the normal marketplace, if a limited liability entity enters liquidation then the creditors fall within the normal “in liquidation” rule concerning remaining funds available in the entity. SRA require solicitors to carry out tail-off cover insurance which distorts the marketplace. A single harmonised regulator with single harmonised insurance rules would ensure a level playing field.

   Harmonisation would undoubtedly mean that the divergent current rulebooks of the differing regulators have to be revisited with the result, undoubtedly, that many of the rules will fall away in order to reach accord. The result would be that the existing bodies such as the law society would simply become membership organisations, not dissimilar to trade unions or the various bodies that look after the interests of doctors and veterinary surgeons.

   other anachronisms would also be resolved with a single regulator. undercurrent SRA rules there is a significant cost to solicitors if they fall within client accounting rules; however broadly the same rules apply whether a solicitor is taking a fee deposit against work to be done or is taking the proceeds of the sale of the mansion as part of conveyancing. There is a need to protect clients from any legal professional running off with client funds; however matters such as advance payment of fees and fee handling should not fall within client accounting rules. Client accounting rules should handle such matters as conveyancing proceeds, payments relating to legal settlements in litigation, lump sum payments in personal injury cases all divorces etc. payment of fees should fall within the normal marketplace rule that these are protected. by imposing a single regulator, it would be possible to state a limit to the advance fees from a particular client and if that limit is exceeded then the funds fall into client accounting rules. applying this via a single regulator this would both level the playing field and reduce general costs.

   when entities such as the law society move 2 membership organisations then they can introduce a voluntary code of conduct; however this should simply be a voluntary code of conduct and should not be an excuse by which the membership organisations can reimpose their regulation.

   there is absolutely no justification for having the myriad of regulators in the current legal marketplace. The new alternative business structures will undoubtedly allow players in the legal marketplace to choose between their regulators. A very large number of solicitors have identified that by entering into an alternative business structure with Chambers of barristers they may be able to avoid SRA regulation by falling within a lighter weight Bar Council regulation. Information from the insurance market identifies that there is also widespread practice of solicitors creating and funding apparently unconnected CMCs which carry out all pre-litigation work in lightweight regulatory environment and then pass the litigation when it arises to the practice of solicitors have helped set up the CMC invisibly. in such cases, care has been taken to ensure that there is no evidence of linkage. the creation of a single legal services regulator to cover all legal services providers and a single rulebook for any particular type of work will ensure a level playing field.

   Alternatively if the current divergent regulatory regime is to remain in place, then any legal services provider should be free to choose which regulator they are regulated by and free, without restriction or transfer costs to move between regulators. All that would be required upon acceptance by the new regulator would be a change of regulators notices and rulebooks in the offices and notification to clients of the change of regulator.

   Under a single regulator or freely transferrable regulators, who would be entitled to call themselves a Solicitor or barrister? Although the vested interests of Bar Counsel and Law Society/SRA have promulgated massive confusion, there is a simple answer. Currently many CMCs are able to effectively use the term solicitors even though they are not regulated by the SRA and the lawyers concerned are no longer on the SRA roll or insured or regulated by the SRA. This is by very careful wording of their biographies by stating that “Mr X qualified in 1993 as a barrister and re-qualified in 2001 as a solicitor and has over 30 years experience in the legal profession. The firm is fully regulated and insured”. nowhere in the statement is there any assertion that Mr X is currently a solicitor and the firm clearly states on its business cards either “lawyers” “Advocates” “law firm”. for the vast majority of users of legal services the statement in the biography is read that Mr X continues to be a solicitor and they do not understand that Mr X is no longer a SRA and no longer regulated by the SRA.

   As training bodies will continue to exist, legal services providers will continue to be able to pass what is currently the solicitors examinations and the barristers examinations and therefore anybody who has passed a solicitors examination and practised for a minimum of 3 years under Law Society SRA Regulations should be entitled to call themselves a solicitor and anybody who has qualified at the bar Council’s barristers examinations should be entitled to call themselves a barrister if they have practised for a period of 2 years in Chambers. This covers the training or pupillage period plus one year’s actual practice. (A voluntary code of conduct could then be agreed between the existing Inns of Court to cover anyone operating from within Chambers.).

   The result of this “training based title” would be that the voluntary codes of conduct stand in their own rights and are not based around the legal service provider’s title. The owners of the voluntary codes would then be free to publicise the benefit of using a body that has adopted the voluntary codes.

   Under a single legal regulator, the enforcement of the legal services regulatory regime would be under the control of the single legal regulator. Failure to abide by the voluntary code would be simply enforced by expulsion from that voluntary membership entity and prohibition on advertising that the person has adopted the voluntary code.