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Law centres and non-lawyer LDPs to be given a year to prepare for ABS status

18 November 2009

Law centres, Citizens Advice Bureaux, advice agencies and trades unions should be given a year’s “grace” to prepare for regulation as ABSs, the Legal Services Board has proposed.

Following the licensing of the first ABSs in mid-2011, the LSB said in a consultation paper that LDPs containing non-lawyers would also be given a year to prepare.

The Legal Services Act provided that the regulation of “special bodies” such as law centres, CABx, advice agencies and unions could be less burdensome because of the public benefit they provided.

However, the LSB said it believed it was “not in the interests of the public nor of the special bodies themselves for there to be significant and prolonged departures from the essentials of the regulatory regime.”

It called on ABS licensing authorities, such as the Law Society, to “adapt their regulatory regimes for special bodies” subject to a core set of values.

Elsewhere in the consultation paper the LSB said that every ABS must at all times have a “head of legal practice,” to ensure the firm complies with the terms of its licence, and a “head of finance and administration”, in charge of compliance relating to accounts.

Appeals against the decisions of licensing authorities should be heard by a single body, allowing a “single coherent body of jurisprudence to form around appeals to licensing decisions.”

The LSB said the appeals body could form part of the Tribunals Service.

“In the longer term we see potential value in exploring the suggestion that all appeals from any approved regulators’ decisions should be heard by this body.”

The LSB advised that licensing authorities should have the power to impose unlimited fines on individuals or firms which broke the rules.

The super-regulator argued strongly against the idea that the proportion of external ownership of an ABS should be restricted.

“In terms of the actual ownership of an ABS, we believe that strong ownership tests mean that there should be no restriction on how much of the business non-lawyers will be allowed to own.

“Any limit would be arbitrary and therefore represent an unjustifiable barrier to the emergence of different business models.”

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