The Legal Services Board has today published its response following its consultation on the internal governance rules for the legal services regulators. This document includes an analysis of submissions received together with its decision on its approach to the internal governance rules going forward.
Neil Buckley, Chief Executive of the Legal Services Board said:
“Independent regulation ensures that consumers, providers, investors and society as whole can be confident that legal services operate in the public interest and in accordance with the rule of law. Our aim in reviewing the internal governance rules is to enhance regulatory independence within the current legislative framework.
Having assessed the effectiveness of the current internal governance rules and taken into account stakeholders’ views on the need for change, we intend to develop new rules. These will be based on principles and focussed on outcomes and will be applied together with new supporting guidance.
With these new internal governance rules, we aim to:
- provide more clarity on the oversight role of the approved regulators and the LSB and
- reduce the number of disagreements between approved regulators and regulatory bodies about independence matters.
We anticipate consulting on new internal governance rules and draft guidance this autumn, with a view to approved regulators commencing transition to the new internal governance rules in spring 2019.”
For further information, please contact the LSB’s Communications Manager, Vincent McGovern (020 7271 0068).
Notes for editors:
- The Legal Services Board (LSB) is required by the Legal Services Act 2007 (the Act) to make the internal governance rules (IGR) for the legal services regulators. These rules set out requirements that approved regulators must meet relating to the independent exercise of their regulatory functions. In light of our experience and developments in the legal services sector, this consultation explored whether changes are now needed to the IGR to enhance regulatory independence.
- This response and decision document 1) sets out the results of our consultation in November 2017 on reviewing the IGR. This includes consideration of further submissions to the LSB in light of the publication of the LSB’s report into its investigation into The Law Society’s arrangements for monitoring and oversight of the Solicitors Regulation Authority, which can be found here), 2) our decision and 3) the next steps for this review. Full information can be found here (scroll down to ‘9 November 2017). The consultation response document can be found here.
- The LSB November 2017 IGR consultation identified possible options for enhancing regulatory independence through the IGR. A summary of responses to the consultation and to the investigation report, along with our consideration of them is in Annex B of the response and decision document.
- We intend to develop more principled and outcomes-focused rules, supported by statutory guidance. The new IGR will apply to all approved regulators (albeit that some rules will relate to matters that are only relevant for those with both representative and regulatory functions). We will impose separate obligations on approved regulators and (where different) their regulatory bodies to proactively report non-compliance with the new rules. We will also assure ourselves on compliance in parallel with, and (when it becomes practical to do so) as part of, the LSB regulatory performance assessments
- The current IGR can be found on the LSB website here.
- The Act created the LSB as a new regulator with responsibility for overseeing the regulation of legal services in England and Wales. The new regulatory regime became active on 1 January 2010.
- The LSB oversees ten approved regulators, which in turn regulate individual legal practitioners. The approved regulators, designated under Part 1 of Schedule 4 of the 2007 Act, are the Law Society, the Bar Council, the Master of the Faculties, the Chartered Institute of Legal Executives, the Council for Licensed Conveyancers, the Chartered Institute of Patent Attorneys, the Chartered Institute of Trade Mark Attorneys, the Association of Costs Lawyers, the Institute of Chartered Accountants in England and Wales and the Association of Chartered Certified Accountants.
In addition, the Institute of Chartered Accountants of Scotland is an approved regulator for probate activities only but does not currently authorise anyone to offer this service.
- As at 1 April 2017, the legal profession in England and Wales comprised 148,690 solicitors, 15,281 barristers, 6,809 chartered legal executives and 5,958 other individuals operating in other areas of the legal profession such as conveyancing. The UK legal sector turnover was £31 billion per annum (2016) which is up 19% in cash terms since 2012. For more information see here.