Davis: Unintended consequences
Reforms to the regulation of legal services proposed by an independent review led by Professor Stephen Mayson would lead to a “massively uncertain and costly system”, the president of the Law Society has said.
Simon Davis said the “unintended consequences” of the reforms, which include moving away from regulation by title, could lead to many small firms leaving the market and may be “unworkable in practice”.
Mr Davis was responding to last September’s interim report of the Independent Review of Legal Services Regulation, set up by the Centre for Ethics & Laws at University College London. A final report is due in the coming months following a period of consultation.
The report mooted an alternative regulatory regime that would see all legal services regulated, but providers subject to different requirements depending on the work they did.
In a letter to Professor Mayson, Mr Davis said: “We would not argue that the current regulatory framework is perfect, but we are concerned that the wholesale reforms you are proposing would lead to a massively uncertain and costly system, with firms needing multiple layers of different regulation for individual members, which would need to be regularly reassessed, with different terms of engagement and levels of insurance.
“We fear that such a complex system would lead to increased cost for legal providers and the public, with key suppliers such as high street generalist practices negatively affected.
“The unintended consequences could well be many small firms leaving the market, the legal sector contracting, and the cost of legal services increasing, leading to further unmet demand.
“There would also be serious implications for diversity, with many smaller firms having BAME partners, staff and suppliers. In many cases smaller firms deal with a higher proportion of vulnerable clients, who could also be affected.”
Mr Davis said the society was are also concerned about the potential implications for the “wider legal ecosystem”, such as the judiciary, courts and tribunals, and the administration of the justice system.”
He said the “multi-layered regulation” proposed by Professor Mayson could be “unworkable in practice”, limiting the ability of individuals to practise to areas for which they had specific regulation.
“In order to best serve clients’ needs, solicitors must be able to advise in relation to a client’s problem in the round.”
Instead, Mr Davis said the “immediate focus” should be on running a “properly funded, co-ordinated public legal education campaign” and obtaining “proper investment” in the legal aid system, particularly in early advice.
The Legal Services Consumer Panel was more positive in its response to the report.
Sarah Chambers, the panel’s chair, said in her letter to Professor Mayson that she agreed that professional title should no longer be the “only route to personal authorisation” and that minimum standards should be set by regulators, not professional bodies.
She agreed too that all legal services could be “within the scope of regulation to varying degrees” and that the regulatory objectives should be tightened.
Ms Chambers backed extending the role of the Legal Ombudsman to all legal services but opposed giving it the power to investigate complaints by lawyers about consumers, as the report suggested.
She argued, among other things, that this would “send the wrong message to consumers about who the system is intended to protect” and “further dissuade” consumers from complaining.
Ms Chambers added that a new consumer representation body, independent of any new legal services regulator and of the providers, should be set up to provide an effective consumer voice.
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