Hill: IGR reflect commitment to ensuring regulatory independence
The Legal Services Board (LSB) is ramping up pressure on the Law Society, the Bar Council and other approved regulators over ensuring the independence of their regulatory arms.
The LSB plans to introduce ongoing monitoring of regulatory independence to ensure the they obey the revised internal governance rules (IGR) introduced last year to ensure greater independence.
The IGR define the relationship between representative bodies (officially called approved regulators) and their regulatory arms where they are part of the same organisation.
There are currently six of them: the Law Society, Bar Council, Chartered Institute of Legal Executives, Association of Costs Lawyers, Chartered Institute of Patent Attorneys and Chartered Institute of Trade Mark Attorneys
Each has until July this year to submit a certificate of compliance with the IGR, after which the LSB will introduce ongoing monitoring.
This will form part of the LSB’s wider monitoring of each regulator under its regulatory performance framework.
The framework involves five standards, under each of which there are up to six outcomes the regulators are expected to achieve. The standards cover core functions such as supervision, but also leadership, assessing the regulator’s ability to carry out its functions effectively.
A newly published LSB consultation said compliance with the IGR would be added as an outcome to this latter standard.
It also proposed including the six approved regulators in the framework – for this purpose alone – monitoring them through “relationship management meetings” two or three times a year.
Approved regulators would have to produce evidence demonstrating the independence of their regulatory arms, such as protocols on delegation and separation, agreements for shared services and logs of any referrals to the LSB for clarification.
They must also provide records of any disputes that have taken place with their regulatory bodies.
The LSB asks only one question in the consultation: whether approved regulators are “clear” on how it will monitor regulatory independence, and if not what alternative approaches they would suggest.
LSB chief executive Matthew Hill said: “Regulatory independence gives everyone confidence that legal services work in the public interest and support the rule of law.
“Our internal governance rules reflect our commitment to ensuring regulatory independence and we will now monitor performance closely to ensure the desired outcomes are being delivered.”
Meanwhile, responding to a separate consultation on the LSB’s business plan, the Law Society urged the oversight regulator to stay in its lane.
should “focus the vast majority of its resources” on discharging its “core statutory function” under the Legal Services Act, rather than “diverting resources to work which is outside of its core regulatory remit”.
The society warned that the LSB’s drive to ‘act as an agent for change’ has “a potential to be a destabilising factor at a time when the sector is going through a period of unprecedented change and uncertainty, and may undermine efforts made elsewhere to increase confidence in the regulated professions and the international standing of the English and Welsh jurisdiction”.
On the LSB’s new internal governance rules, the society said it was making changes to its governance arrangements to comply, combined with training and protocols on information sharing.
The Bar Council’s response made a similar point. It said: “We would like to request that the LSB remains conscious of the boundaries of its role as defined by the Legal Services Act 2007 as well as the organisational and opportunity costs of regulatory change and adopts a more proportionate approach in future.”
It highlighted how the IGR consultation was the fourth on the subject, while the LSB recently launched a call for evidence on the topic of ongoing competence, and is also beginning to look at how the approved regulators use the practising fees they collect.
The latter two are “high priority for the Bar Council and, like the IGR project, will require significant resources if we are to engage adequately”, the response said.
“We are a small organisation with a budget that reflects this and as such, our work on LSB projects inevitably means that other important work we do in relation to fulfilling the regulatory objectives is impacted.”
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