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Public must not become "guinea pigs in an ABS experiment", Bar Standards Board warns

28 August 2009

The Bar Standards Board (BSB) has proposed that alternative business structures should only be licensed if they have a majority of lawyer managers.

The BSB also warned that members of the public must not be treated as “guinea pigs in an ABS experiment, designed to permit the widest possible permutations on the ABS theme in order to reveal where the additional, and unacceptable, risks may later turn out to lie”.

In its response to the Legal Services Board consultation, the BSB said it had not yet decided whether to become an ABS licensing authority and its priority was to decide whether to regulate LDPs, which have been up and running since March.

The BSB said there should be an option for a licensing authority to regulate only low-risk bodies.

“In the interests of diversity of regulation, it makes sense that not all regulators should have to regulate all types of ABS,” the BSB said.

The Bar Standards Board said the LSB should learn from the experience of LDPs before deciding on its policy for alternative business structures.

“Regulators should be permitted, and indeed encouraged, to introduce ABSs gradually, starting with lower-risk arrangements and only allowing higher-risk models when experience has shown that additional risks can be managed effectively.”

The BSB warned that with the expected growth in the number of regulators covering similar services, there was a risk that standards would fall as they sought to attract more business.

“There must not be a race to the bottom in relation to regulatory standards.”

Earlier this month, the Bar Council warned the LSB against taking a “big bang” approach (see 17 August 2009).

In a separate development, the new chairman of the Criminal Bar Association, Paul Mendelle QC, said the MoJ appeared to have “torn up the recommendations for incremental and considered change set out in the Carter Report 2006”.

He described the latest plans for legal aid cuts, which could result in heavy cuts in the fees of criminal defence barristers, as “ill-considered and cavalier”.

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