Barder: Exceptional and rare
Professor Mayson also sought advice and insight from a range of individuals on a purposefully established Advisory Panel, including our colleague Iain Miller. In the Acknowledgements section of the report, Mayson states that this allowed him to “consider aspects of legal services regulation, and the experiences of consumers, practitioners and regulators, in a much more considered way than would have been possible otherwise.”
In summarising his views about the current regulatory framework, Professor Mayson has referred to it as “incomplete” and “limited” and as “not able in the near-term and beyond to meet the demands and expectations placed on it, particularly with the emergence and rapid development of alternative providers and lawtech”. The report sets out 46 long-term recommendations which Mayson states are seeking to “create a level playing field for legal services and enhance consumer protection, through targeted and proportionate regulation”. These are made within the context and expectation of longer-term reform of the overall regulatory framework for legal services and are not in any way to be regarded as quick fixes. However, Mayson did cite four further short-term recommendations as possible solutions or improvements to address the most pressing issues he uncovered.
While we would encourage you to set aside time to read the Mayson report in full, we consider the following to be the headline points to take away in terms of his recommendations:
Mayson anticipates that in order to achieve some of his recommendations the LSA would need, at the very least, to be amended, if not entirely ripped up and replaced with other enabling legislation. It may come as no surprise then that this and the recommendation to introduce a single regulator have received a less than warm welcome from some of the existing bodies tasked with discharging the regulatory functions of the approved regulators.
For example, in response to the suggestion of one “super regulator”, Legal Futures reported that a spokesman for the Bar Standards Board said: “The work of barristers is central to the operation of the justice system and the rule of law. As such, the public interest requires that barristers continue to be regulated robustly by a regulator with the necessary specialist expertise”.
These bodies may be reassured by the fact that recommendations requiring a substantial overhaul of the existing legislation are unlikely to become a reality any time soon. Even before Covid-19, reform of the LSA was not something on the Government’s agenda. Clearly any review of this primary legislation is now firmly on the backburner.
The Legal Services Board (LSB) recently announced that it is developing a new strategy for legal services regulation which it intends to pursue irrespective of legislative reform. The LSB’s Chief Executive, Matthew Hill, indicated that this strategy “…could include considering alternative regulatory models. Central to our thinking is a commitment to a strategic reshaping of legal services to better meet the needs of consumers and benefit everyone in society…”
So, what exactly is the LSB proposing? Earlier this month the LSB’s Board considered a proposal submitted by the LSB Executive to conduct a review of the “reserved legal activities” set out in the LSA.
The legal activities, which are reserved and therefore must only be carried out by an authorised or exempt person, are:
The distinction between what is a reserved legal activity and what is not is of fundamental importance. Whilst it is a criminal offence to carry on a reserved legal activity when you are not entitled to do so, anyone can carry on a legal activity which is not reserved. This means that, contrary to consumer expectations, not all providers of legal services are regulated. And this is one of the main reasons – consumer confusion - that Professor Mayson cites as the need for change.
Unfortunately, the boundary between reserved legal activities and all other legal activities is blurred and hard to draw. This is because the history of the reserved legal activities is obscure and, in some cases, dates back many centuries and is the result of simply confirming the then current practice or a political influence. Equally, the boundaries of the reserved legal activities have rarely been tested in a court of law.
This lack of clear, logical distinction between what is a reserved legal activity and what is not causes confusion for those seeking to access legal services and also enables individuals to find creative ways of avoiding regulation.
The LSB Executive has recognised that “Over time, the regulatory system is falling ever further out-of-step with the evolution of the market. It is important that the regulatory framework is as fit for purpose as it can be to support the sector to recover from the Covid-19 pandemic, maintain its international competitiveness following EU exit and deliver wider consumer and public interest outcomes.”
The proposal which the LSB Board considered this month suggested that any review of the reserved legal activities should be “…approached as part of a broader vision of change that can be achieved within the parameters of the [Legal Services] Act… The Act provides scope for regulators to authorise providers holding other professional titles or operating in the unregulated market, raising issues around the future institutional landscape. There is scope to set up voluntary arrangements relating to both regulatory standards and consumer redress. Therefore, alongside any alterations to the reserved activities, we would wish to explore parallel reforms to the regulatory arrangements of existing regulatory bodies”. (Our emphasis added)
To undertake such a comprehensive review would, however, be no mean feat. Sensibly, the LSB has recognised this and has committed to revisiting the issue once it has more information. The LSB Board concluded that “…most people expect the legal professionals they engage to be regulated, but it should not necessarily follow that all legal activities should be regulated. However, the Board agreed that it would be an undesirable outcome if a review led to more regulators, so it was keen to explore how the existing regulators could adapt. In our aim to promote public trust and confidence in the legal services system we will revisit this topic later in the year, when we can analyse different models, risks and opportunities in more detail.”
The LSB clearly recognises the need for change, but is keen to get it right rather than to rush to make quick fixes, which then do not stand the test of time. It therefore seems to be a case of “watch this space”. Given the uncertainty of the current situation we find ourselves living within, where so many other items trump this on the political agenda, perhaps this is the slightly dampened message we can take away. While the Mayson report sets out how the legal services framework could look if you were to start with a blank canvass (which to be fair to him was the brief), it seems that we are (now, even more so) a very long way from being afforded that opportunity. So in the meantime, perhaps we remain in limbo, more in a type of “make do” situation, where change is most likely to be brought about by small steps and achievable measures, as opposed to what can only be regarded as a step change. So in that sense, while the LSB’s proposals might seem ambitious, they are clearly achievable and given the absolute need for change, long term, perhaps this is the desired route that the LSB should be taking and one that it should be encouraging the frontline regulators to support.
Jessica Clay is a Senior Associate in the Regulatory department and specialises in legal services regulation, with a focus on regulatory compliance, legal ethics, investigations and public law matters.
Lucy Williams is Legal Counsel in the Regulatory Department with a particular specialism in legal, healthcare and financial regulation. In her defence practice Lucy represents regulated professionals and organisations facing professional disciplinary proceedings, including law firms, solicitors, barristers, doctors, nurses, psychotherapists and teachers.
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