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UK legal regulators clash over roles

Regulatory regime must ‘meet the needs of the profession’  

4 December 2013

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By Manju Manglani, Editor (@ManjuManglani)

Representatives from the Solicitors Regulation Authority (SRA), Legal Services Board (LSB) and Law Society of England and Wales entered into a heated debate yesterday about the current and future regulation of the legal profession.

Speaking at Managing Partner’s 10th annual Risk Management for Law Firms conference yesterday, the current system of regulating law firms came under fire over its cost and complexity.

Chris Kenny, chief executive at the LSB, opened the debate by saying that the regulatory regime under the Legal Services Act 2007 is “working better than its complexity deserves”.

But, he warned that “the current regulatory framework has yet to deliver its real potential because of over-engineering and complexity”.

Kenny argued that the benefits of outcomes-focused regulation “are not yet fully visible” and that a key challenge is that, to some extent, “both regulators and firms lack confidence to operate without prescriptive rules”.

Consequently, law firms are subject to “excessive regulatory burdens and costs” under the new regime, he said.

The Law Society’s head of corporate affairs, Patricia Greer, suggested that regulatory costs could be reduced by addressing overlaps in their work. “We need to reduce duplication of the roles of the SRA, Law Society and LSB,” she said.

“Quite a lot can be achieved by tidying up internal governance rules to tighten roles and responsibilities and ensure the profession has a say in how it is regulated and how standards are set for different parts of the profession.”

Standards setting would include deciding where regulators should be focused, the key issues and problems, and setting out high-level policies on what should be achieved, she said.

“We need to look at regulatory objectives and need to have a lighter touch and take and oversight role for the LSB.”

Kenny similarly felt that “existing regulators need to better target their regulation on higher risk areas and entities, reduce regulation in lower ones and respond to changing risks”.

The SRA’s executive director, Samantha Barrass, agreed that regulatory costs need to be addressed and that “there is more we can do to remove unnecessary regulation”.

“We know that we need to be transparent not just about our costs, but where the money is going,” she said.

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