Pitt: 'There is a compelling case to introduce a new regulatory settlement'

The Legal Services Board (LSB) has today published a paper exploring options for reform of the Legal Services Act 2007.

The paper, which has been shared with ministers, explains some of the choices ahead and the regulatory tools that are available to inform further debate on the Act.

LSB chairman, Sir Michael Pitt, said he welcomed the Lord Chancellor's recent announcement that the Legal Services Act should be reviewed during this parliament.

'Irrespective of any future reform, however, we recognise our responsibility to maximise the potential of the existing legal framework; indeed, we want the process of regulatory reform to accelerate. Whilst there may not be a 'burning platform' for emergency action, there is a compelling case to introduce a new regulatory settlement for the medium-term,' said Pitt.

The paper considers a set of core issues that could potentially frame possible future reform. These include the case for fundamental change to the Act and what should be regulated; the rationale for sector-specific regulation; tension between regulation of activities, individuals, entities, and titles; regulatory independence; and the shape of the regulatory infrastructure.

'Regulation has the potential to make a very real contribution to unlocking growth, increasing productivity and addressing the significant unmet need for legal services,' said Pitt.

'To do so, the regulatory framework must be more efficient and effective in seeking to promote strong and fair competition. It has to be capable of responding to rapidly changing conditions in the market whilst also maintaining necessary protections for consumers and the public interest.'

Pitt added that the LSB would continue to develop its thinking on what the key elements of the regulatory framework might be but warned that difficult choices lay ahead.

A spokesperson for CILEx regulation responded: 'The progress report to the Justice Minister on deregulation and market liberation shows that, although the Legal Services Act is complicated and overly prescriptive, it has had a substantive impact on the sector and the way services are provided. It has brought new, more independent ways of dealing with consumer complaints and facilitated new entrants, both amongst the regulators (of which CILEx is one) and new models of business through ABS.' 

They continued: 'More can be achieved through collaboration by the regulators to reduce unnecessary overlap and duplication, where they can see that it is in the interests of consumers, practitioners and the administration of justice to do so. The options paper put together by the regulatory bodies under the leadership of Stephen Mayson is a valuable resource when reviewing those changes. It will also provide a resource for the government if it feels a further review is needed.

'However, as is evident from the current Act, regulatory requirements imposed in the teeth of sectoral opposition is much less likely to lead to balanced, proportionate and rational outcomes than changes achieved through convergence and co-operation derived from practical understanding of issues. CILEx regulation hopes that further progress will be made under the legislation as it is, rather than waiting for a new settlement to be achieved through a review and subsequent legislation.’

Paul Philip, chief executive of the Solicitors Regulation Authority (SRA), said: 'The opportunity for joint discussion on the regulatory landscape is important and, as the LSB makes clear, this report does not represent collective or individual views. Our consistent view is that there is much more that can be achieved in the current legislative framework.

'Supporting growth and reducing bureaucracy are priorities for the SRA and we have done a great deal in the last 18 months. At a time when growth and innovation are critical, our focus is on what we can do now to free up firms to do business, while protecting the public.'