Barristers at risk of being squeezed out of market, regulator warns

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Davies: no government meddling

Barristers are at risk of being “squeezed out of the market by a declining case load, a surfeit of barristers and increasing competition from both other regulated legal professionals as well as unregulated service providers”, the Bar Standards Board (BSB) has warned.

However, its bid to support barristers to face the future by licensing advocacy-focused alternative business structures (ABSs) is set finally to take off this autumn.

The BSB recently put out for consultation its draft strategic plan for 2016-19, in which it set out the “major challenges” barristers will face over the next decade.

“These will arise, for example, from changing consumer demands and expectations, technological advances and global competition. There will also be statutory and other approaches to regulation in general that place both the public interest and the free rein of the market above the preservation of traditional practices and vested interests.

“There will be considerable government pressure to deregulate, but no reduction in the trend of ever greater transparency and public accountability, especially in the regulation of professionals.

“The relentless pressure on barristers’ costs is set to continue. Commercial and some areas of private law, to some extent, will be sheltered from the changes forced on the publicly funded Bar through reductions to legal aid.

“The present model for the administration of justice in criminal, family and immigration courts is becoming increasingly unsustainable. Government cannot afford the cost of legal aid and court administration, and individuals cannot afford the cost of litigation.”

As a result, barristers faced the risk of being squeezed out of the market. “How the Bar fares will depend on the robustness and creativity of its response, the changes which government and the judiciary will bring into the administration of justice, and the speed with which consumers seek out alternative ways to address legal problems,” the draft strategy said.

“We at the BSB must act in this context to ensure that the public can continue to rely on the high standards of work and ethical behaviour historically associated with the Bar.”

The draft strategy said the BSB aimed to address three key risks it had identified: the failure by those it regulated to meet consumer needs; a lack of diversity in the profession, together with “discriminatory practice and culture at the Bar”; and commercial pressures on legal services providers.

On the latter, the paper said that while pressures in the market “do have the potential to stimulate competition and innovation”, they can also “adversely affect access to legal services and can sometimes threaten professional independence and integrity if not carefully managed”.

The draft strategy said the BSB’s work over the next three years would be organised into three overarching themes: regulating in the public interest, “supporting those we regulate to face the future”, and ensuring it is a “strong and sustainable” regulator.

The government last year outlined its intention to make regulators like the BSB fully independent from representative bodies. The BSB supports the principle, but will not settle its position until the consultation on the draft strategy is complete, and the government outlines exactly how it intends to make independence happen.

However, speaking to Legal Futures, BSB chief executive Dr Vanessa Davies observed that there was a danger of some seeing independence from representative bodies as meaning the regulators were somehow “in hock” with government. This was emphatically not the case, she said, adding that in her experience government meddling in legal regulation was “non-existent”.

She trod carefully around the related issue of whether, in a post-separation world, lawyers should still have to contribute to the work of their representative bodies through their practising fees. While saying it was a matter for Parliament to roll back the provision of the Legal Services Act 2007, she also noted that this was “pretty much the only profession where statute allows that to happen”.

The BSB’s application to become an ABS licensing authority was going for approval at next month’s meeting of the Legal Services Board, Dr Davies said. If “all goes according to plan” and it is approved, the BSB will pilot the application process in the summer ahead of opening the doors to applications in October.

She admitted to being “a bit disappointed” by the number of entities that the BSB has approved since that process began last year – 38 since 1 April 2015 – but said it was “about given the profession choice”. Further, the BSB had a “scale up/scale down” model which meant there were not staff sitting around waiting for applications to come in.