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Advent of ABSs will be good for the profession, minister tells lawyers

27 September 2010

Solicitors should prepare for ABSs, justice minister Jonathan Djanogly has said as he confirmed the government’s commitment to the introduction of the new regime.

Putting an end to earlier rumours that the coalition might not implement the ABS provisions of the Legal Services Act, Djanogly said “no one should be under the illusion that I wish to delay ABS introduction, and all lawyers should be preparing for its introduction”.

Speaking at a breakfast meeting at the Law Society, the minister said the roll out of the alternative business structure regime was part of the government’s drive to remove the regulatory burden on businesses.

For the first time he confirmed unambiguously that the government’s Reducing Regulation Committee had “given clearance for continuation of the works streams relating to implementation of the 2007 Act – which includes clearance to proceed with ABS”, he said.

As a result, the establishment of ABSs was now officially “one of the key priorities in the programme of work relating to the 2007 Act”.

The confirmation was accompanied by the veiled caveat, however, that the minister would be prepared to delay implementation of the regime if he was not satisfied that an appropriate framework was in place.

The Legal Services Board has scheduled 6 October 2011 as the ‘go live’ day for ABSs but Djanogly told Solicitors Journal that he regarded the target date as a guide.

He would only give the new regime the green light, he said, “if the framework offers appropriate guarantees for the protection of consumers and access to justice”.

He also suggested that the processes involved to give effect to the Act could take longer than anticipated.

“Licensing authorities can only be designated by order,” he said. “The MoJ will draft the orders and lay them, subject to ministerial approval, before parliament. A commencement order will also need to be laid before the ABS regime becomes operational and again this will be subject to ministerial approval.”

But he insisted that the liberalisation of the legal services market set out in the Act was a positive move for the profession, in particular for smaller firms.

“Risks to small or inefficient legal suppliers may be mitigated by the possibility provided by ABS that practitioners from different professions would be able to join up to ensure that it is economically viable for them to continue to provide legal and associated services, and to gain from efficiency savings,” he said. “I foresee that those firms that take a proactive approach will benefit.”

In the same speech, the minister also confirmed that large-scale cuts will go ahead within the Ministry of Justice as part of the government-wide spending review.

Cuts alone were not the answer to the current financial crisis, he said, but they could provide “an opportunity and facilitator for reform”.

“In effect, we are being given a rare chance to consider fundamentally how to improve and enhance the way the business of justice is conducted,” Djanogly continued.

The minister confirmed a raft of cost-busting measures ranging from court closures and a reduction of the legal aid budget to controlling costs in civil litigation and defamation proceedings.

He also confirmed the government’s intention to reform the family justice system.

Earlier this summer Djanogly tasked a panel set up by Jack Straw with carrying out a full review of family justice.

The panel, chaired by FSA chairman David Norgrove, is due to complete its initial investigation by the end of the month. It received the backing of the president of the family division last week (see ‘No sacred cows in family justice review, president warns’, 21 September 2010), who supported early indications that the panel would recommend greater use of out-of-court dispute resolution mechanisms.

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