Legal Services Board calls for consumers to be put at the heart of regulation

On the 29th of March the Legal Services Board (LSB) launched a consumer-focused strategy for legal services in England and Wales, which included a call for all regulators in England and Wales to collaborate to reshape legal services to better meet society’s needs. It called for action from all regulators from its position as the oversight regulator, having been formed by the Legal Services Act 2007.

The ten-year strategy reflects that there are a number of challenges facing the legal services sector, and that many of these require a coordinated effort by different people and organisations in the sector, pursuing a common agenda. The strategy has identified nine challenges within the sector. These include closing gaps in consumer protection, empowering consumer choice and achieving fairer outcomes.

The LSB has also identified other priorities in the strategy, such as a statutory review of the reserved legal activities, a review of professional indemnity insurance, and work on simple legal products, but it has deferred these until resources permit.

Dr Helen Phillips, Chair of the Legal Services Board, said:

“While there have been many achievements over the last ten years of independent regulation, there continue to be significant levels unmet legal need. We must seize this moment to drive forward a strategy that promotes the public interest, supports competition and growth, and encourages diversity and inclusion. The LSB cannot do this alone – everyone in the sector must work together to pursue our shared interests. We are greatly encouraged by the commitment to collaboration that characterised so many responses to our consultation. Only by working together can the sector emerge strongly from the Covid-19 pandemic and successfully tackle the challenges it faces.If we all work together, we will improve diversity, and the sector will look more like the society it serves. The system will better support innovation and be equipped to respond to the changing market. Consumers will be able to shop around and reward firms that offer high-quality, transparent, and affordable services. The strategy is necessarily ambitious, and if we all play our part, we can achieve our vision. Through collaboration, we will reshape services to create a strong and resilient sector that better meets society’s needs.”

Read the full strategy here, or more from the LSB here.

Law Society of Scotland publishes a new strategy to improve regulatory process and enhance competition in the legal sector

The Law Society of Scotland’s Regulatory Committee has revealed a new two-year strategy, which is focused on improving regulatory processes, enhancing competition in Scotland’s legal sector and ensuring robust consumer protections. The Regulatory Committee is independent from the Law Society’s Council (the governing body of the Society), and is responsible for overseeing a number of sub-committees, as well as setting its own strategy, with the remit of regulating practice. The committee is made up of an equal numbers of solicitor and non-solicitor members and is led by a non-solicitor convener.

The new strategy sets out five overarching objectives. The first,  ‘protect’, is focused on protecting consumer and public interest, and protecting the rule of law. The second, ‘scrutinise’, is focused on examining the work of the subcommittee and other delegates of the committee to ensure their value and productivity. The remaining three are ‘enhance’, ‘align’, and ‘develop’. ‘Enhance’ is focused on raising public awareness of the society’s work, as well as developing a proportionate and principals focused regulatory structure that will enhance the competitiveness of the Scottish legal sector. ‘Align’ is focused on making sure that the regulatory committee’s work aligns with other groups in the society, whilst ‘develop’ is a process of internal self-reflection and development.

Craig Cathcart, Convener of the Law Society of Scotland Regulatory Committee said: “The legal profession has a key role in our society. Solicitors help people at pivotal points in their lives whether they are buying a new home, planning for the future of their family, building a successful business or upholding their rights in court. Anyone who seeks the advice of a solicitor must feel confident that they are in good hands. Having a robust and fair regulatory system which sets high standards for entry to Scotland’s solicitor profession and throughout a solicitor’s years in practice, along with clear consumer protections, provides that assurance.”

Read the full strategy here. 

Legal Services Board annual regulatory performance review pushes improvements in performance and governance

The Legal Services Board (LSB) has published annual reports on the performance of the eight legal services regulatory bodies. Each  one of the eight providers regulates a different type of lawyer in England and Wales, and has control over its day to day operations. However under the Legal Services Act 2007 (the Act), they have the same obligations and are assessed against the same 27 outcomes across five standards. The standards are: regulatory approach, authorisation, supervision, enforcement, and well-led: governance and leadership.

The report has found that the performance of most of the regulatory bodies has improved since the last assessment in November 2019. Notably, the Council of Licensed Conveyancers (CLC) and the Solicitors Regulation Authority (SRA) have met all the outcomes required across all standards. However, the report also found that although regulatory bodies are generally performing well against the authorisation, supervision and enforcement standards, there is a lower level of achievement in meeting the standard required for outcomes under the regulatory approach and well-led standards.

The LSB is therefore considering further actions including:

  • Undertaking a thematic review around regulatory approach in the coming year, depending on regulatory bodies’ progress in meeting the standard required.
  • Several of the not met ratings are associated with the quality and clarity of applications for statutory approval of changes to regulatory arrangements and practising certificate fees. Whilst some regulators appear to be experiencing little difficulty in meeting these standards, the LSB recently started a review of its rules and guidance in this area.

In last year’s report, the LSB raised concerns over some regulatory bodies not fully embedding the regulatory performance framework into their governance arrangements. The LSB has subsequently launched targeted reviews of the Bar Standard Board (BSB) and Faculty Office (FO) on performance against the well-led standard. These reviews formally began in September 2020 and are scheduled to conclude in early 2021.

Matthew Hill, Chief Executive of the Legal Services Board, said:

“Independent regulation protects the public and benefits the profession, and we have seen some welcome improvement across the regulatory bodies, particularly in their enforcement of standards and increased independence. However, there continue to be areas where improvement is needed. No regulatory body that is putting the public first in its decision-making and acting transparently to promote the regulatory objectives set out in the Act should have any difficulty in meeting the standards of good regulation. We expect the regulators to take the performance assessments as indicators of where improvements are needed to ensure they have the right mechanisms in place to carry out their regulatory duties effectively and efficiently. Appropriately regulated lawyers who deliver consistently competent and ethical services will give consumers stronger confidence in the sector and help build a legal services market that better meets the needs of society.”

Read the full report here. 

UK Competition and Markets Authority review of legal services market

The UK Competition and Markets Authority has released an updated report based on its initial findings on the legal services market published in 2016. The report recognises the improvements that have been made in increasing the transparency of the price, service and quality of legal services, but said there was more to do to increase “the intensity of competition between providers”, calling for reforms particularly in the currently unregulated sector of the market.

The unregulated sector has grown significantly over the past few years, largely due to the rising use of legal technology products. The report raises concerns over the current regulatory framework and the focus on professional titles and reserved activities, as opposed to the risk profile of activities. Which it suggests could restrict competition, create unnecessary costs and leave a regulatory gap.

The CMA has recommended three actions within the existing regime which would help “deliver reform in stages”.

  • First was creating a mandatory public register of unauthorised providers for certain legal services and mandating that they offer redress options to consumers.
  • Second was that the Legal Services Board (LSB) should carry out a review of the reserved activities.
  • Third was the independence of regulation from professional representation. The CMA noted that “significant improvements” have been made as a result of revised internal governance rules imposed on bodies like the Law Society and Bar Council by the LSB.

Andrea Coscelli, the CMA’s chief executive, said: “This is an incredibly important sector that people often turn to at a time of great need, which is why the CMA made recommendations to improve consumer outcomes, including through increasing transparency, as well as to address concerns about the way in which the sector is regulated. It is positive to see changes that have already been made, but more progress is needed. We encourage the Ministry of Justice, the Legal Services Board and other legal services regulators to continue to work towards reform and to make sure the sector works well for consumers long into the future.”

Read the full review here or the LSB’s response here.

Regulatory Abdication in Practice

Abstract

“Meta-regulation” refers to deliberate efforts to induce private firms to create their own internal regulations—a regulatory strategy sometimes referred to as “management-based regulation” or even “regulation of self-regulation.” Meta-regulation is often presented as a flexible alternative to traditional “command-and-control” regulation. But does meta-regulation actually work? In her recent book, Meta-Regulation in Practice: Beyond Normative Views of Morality and Rationality, Fiona Simon purports to offer a critique of meta-regulation based on an extended case study of the often-feckless process of electricity regulatory reform undertaken in Australia in the early part of this century. Yet neither Simon’s case study nor her book overall succeeds in undermining the rationale for using meta-regulation.

In this review essay, I highlight the many limitations of Simon’s argument. I show how, in making existing scholarship her foil, Simon mischaracterizes what regulatory scholars have had to say about meta-regulation. Not only does Simon misleadingly make scholars out to be naïve and overly optimistic about what can be expected from meta-regulation, but she also ignores entirely the peer-reviewed empirical research that shows that meta-regulation can work. She also misstates what existing work has to say about the mechanisms that can make meta-regulation effective. The most significant problem with Simon’s book, though, is that the case study she presents in her effort to criticize meta-regulation theory does not actually describe a strategy based on meta-regulation. Rather, it shows Australian electricity regulators as passive, defensive, and weak. What Simon’s book actually offers is a detailed case study of regulatory abdication in practice.

Citation
Coglianese, Cary, Regulatory Abdication in Practice (February 7, 2020). U of Penn, Inst for Law & Econ Research Paper No. 20-11.

Available from the SSRN site.

State Bar of California publishes 2017 Annual Discipline Report

In 2017 the State Bar and its prosecutorial arm, the Office of Chief Trial Counsel, implemented a number of comprehensive structural and process re-engineering reforms designed to improve public protection for all California residents. Given the ambitious nature of these reforms, key measures from the report indicate a decline in short-term performance as compared to the previous year.

Key 2017 workload measures include:

  • Received 15,175 new complaints of attorney misconduct; of these 524 were immigration related;
  • Received 668 unauthorized practice of law complaints, 158 of which were immigration related;
  • Referred 315 unauthorized practice of law matters to law enforcement for potential prosecution;
  • Closed 14,063 cases and filed formal charges in 483;
  • Recommended disbarment or suspension to the Supreme Court in 592 cases;
  • Disbarred 129 attorneys; suspended 134 attorneys; and reprimanded 52 attorneys.

An additional performance measure included in the Annual Discipline Report is case backlog, which grew in 2017. The report notes that while the current backlog is up, the Office of Chief Trial Counsel has been developing a new system of case prioritisation to provide more protection to vulnerable victims of attorney misconduct, which will ultimately ensure that the cases that cause the most harm to the public never end up in backlog status.

“Californians deserve to be protected by a strong attorney discipline system. Our internal reforms and improvements will help the State Bar better achieve our mission of protecting the public from attorney misconduct,” said Leah Wilson, Executive Director of the State Bar of California.

Major initiatives of the State Bar Office of Chief Trial Counsel in 2017 include:

  • Development of an improved case prioritisation system to devote more resources to the cases which pose the greatest threat to the public;
  • Implementation of a new Case Management System to increase transparency, effectiveness, and efficiency;
  • Assessment of workload to allocate heavy caseloads among staff fairly and efficiently.

The State Bar’s ongoing reform efforts included additional measures  taken in 2017 to support the attorney discipline system and public protection:

Read the full 2017 Annual Discipline Report.