Appeals consultation shows LSB making contingency plans to regulate ABSs itself

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Appeal route: Act to be changed to stop appeals to the High Court

The Legal Services Board (LSB) has continued making contingency plans to regulate alternative business structures (ABSs) itself if none of the current approved regulators are up to the task, it has emerged.

The LSB has issued a consultation on the arrangements for appeals against the decisions of ABS licensing authorities, which will initially apply to itself as an ABS licensing authority, as well as the Law Society and Council for Licensed Conveyancers if they are approved (by the LSB) as licensing authorities too.

Both bodies were named because they have begun detailed discussions with the LSB about their intention to apply for approval, but other regulators could be added before or after – the Institute of Legal Executives is planning to become an ABS licensing authority, although not when ABSs begin in October 2011.

Earlier this year, the LSB’s 2010/11 business plan said it would scope out the requirements for direct licensing during the summer and then in the last quarter of 2010 determine whether potential ABS licensing authorities are progressing sufficiently. If needed, the LSB would consult on its own licensing rules in the first quarter of 2011 (see story).

The consultation confirms the intention that appeals against decisions of the licensing authorities – such as refusal to grant a licence to a body, or action on an individual within an ABS – should be heard by the General Regulatory Chamber of the First-tier Tribunal, with appeals from there to the Upper Tribunal. The Legal Services Act 2007 is to be amended as it provides a right of onward appeal to the High Court.

The Act names both the Solicitors Disciplinary Tribunal and the Council for Licensed Conveyancers’ disciplinary appeals committee as bodies that can carry out the appeal function, but also allows the Lord Chancellor to designate new appellate bodies. The LSB has decided to go down the latter route so that a single body hears appeals.

It is envisaged that appeals will be heard by a panel of two members, a legally qualified chairperson and lay member. Members will be drawn primarily from the immigration services panel – who deal with similar appeals in relation to decisions by the Office of the Immigration Services Commissioner on immigration advisers – as well as other members with appropriate experience.

As the tribunal will use the existing infrastructure of the Tribunals Service, modest set-up costs, including training, have been put at around £16,000, while annual operating costs – based on an estimated 20 appeals in the first year – will be about £50,000. These costs will be recovered via the licence fees charged to ABSs.

The consultation closes on 12 November. For more, including the paper, see here.