Legal Services Consumer Panel call for a single legal regulator – a small step towards massive change

3 September 2013

On 5 June 2013, in a written ministerial statement, Justice Minister Helen Grant said concerns over the complexity of the current regulatory landscape had prompted the government to undertake a full-scale review of the regulation of legal services. It was said that “the purpose of this review is to consider what could be done to simplify the regulatory framework and reduce unnecessary burdens on the legal sector whilst retaining appropriate regulatory oversight". She called for evidence from stakeholders and invited views about and ideas for reducing regulatory burdens and simplifying the legal services regulatory framework.

The Legal Services Consumer Panel yesterday published its submission to the Ministry of Justice simplification review, entitled ‘Breaking the maze; Simplifying legal services regulation’.

The Legal Services Consumer Panel’s role is to provide independent advice to the Legal Services Board about the interests of users of legal services, by investigating issues that affect consumers and seeking to influence decisions about how lawyers are regulated.

The Panel states that four years of consumer experiences has demonstrated to it that the existing regulatory framework “does not provide a sustainable model in the long term to offer consumers the best system of consumer protection or support a competitive market place”. Concerns include reserved activities being narrowly drawn, the unregulated sector growing in influence, duplication of responsibilities with multiple regulatory regimes and a lack of cultural independence.  It made specific reference to “serious allegations” having been made about representative arms meddling in regulatory matters.   Whilst conceding that the market it still changing and taking shape following the ABS reforms, it is their view that it is the “right time to start designing a new blueprint”.

A single regulator?

The proposed ‘lead candidate’ for a future regulatory model is a single regulator for the legal services market. The Panel considers it would be possible to design such a model while still respecting differences between branches of the profession;

‘It would not automatically lead to the fusion of the profession or undermine an independent bar, as some may claim.  Instead it would better reflect the changing professional boundaries happening now, as seen in rule changes designed to allow different types of lawyers to compete with each other for the same business and in new business structures that combine disciplines.   A single regulator is arguably the solution that would best enable the most diverse market – one made up of traditional and new providers.

A further strength isolated for commendation is that the single regulator model would offer “full independence from the profession, giving consumers confidence that regulation is protecting them, not lawyers”.

Given the fast pace of the changes in the legal services landscape, it was inevitable that regulatory frameworks would need to catch up.  It is certainly time to start designing a new blueprint although such a seismic change to legal regulation is not going to happen overnight and is likely to be met by the same varied and vocal responses that have been heard in response to the change in the legal landscape to date.

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