Legal services regulation: the final report

After two years, my final report of the Independent Review of Legal Services Regulation has been published.  It is available for download from this site and from UCL.

In 2016, the Competition & Markets Authority completed its market study and concluded that the legal services sector is not working well for individual consumers and small businesses, and that the current regulatory framework under the Legal Services Act 2007 is not sustainable in the long run.  One of its recommendations was that the government should undertake a review of the current regulatory framework.

In light of Brexit, the Ministry understandably did not feel able at the time to commit to a formal review.  In July 2018, I therefore volunteered to undertake the Independent Review on a pro bono basis under the auspices of the Centre for Ethics & Law, in the Faculty of Laws at University College London.

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Re-thinking legal services regulation

My interim report for the Independent Review of Legal Services Regulation in England & Wales is published today (available here).  This post is extracted from it.

While the reforms of the Legal Services Act 2007 have been mainly beneficial overall, that legislation might best be characterised as an incomplete step towards restructuring legal services regulation.

For reasons that are understandable, it did not fully follow through on some key elements of the regulatory structure.  These include: review and reform of the reserved legal activities (those few activities that must be provided by lawyers); the known regulatory gap (as a consequence of which the non-reserved activities of lawyers are regulated, but those of non-lawyers can legally be provided but cannot be regulated – to the potential detriment of consumers); and the separation of regulation from professional representative interests.

This lack of follow-through has led to increasing challenges to the integrity of the regulatory framework as the legal sector has evolved and developed since 2007.

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An independent review of legal services regulation

The announcements are out, and the work has started!  I’m honoured to be leading a fundamental review of the current regulatory framework for legal services in England & Wales through the Centre for Ethics & Law in the Faculty of Laws at University College London.  Full details are available here.

The independent review is intended to explore the longer-term and related issues raised by the Competition and Markets Authority (CMA) market study in 2016, which concluded that the legal services sector is not working well for individual consumers and small businesses, and that the current regulatory framework is unsustainable in the long run.  It called for a review of that framework to make it more flexible as well as targeted at areas of highest risk where regulation is most needed.

The time for the review is right.  In the light of Brexit, ‘taking back control’ presumes full confidence in our domestic rule of law and legal institutions, as well as maintaining our performance and competitive position in the global economy.   The provision of effective and properly regulated legal services is critical to maintaining the rule of law, and the effective and efficient administration of justice.  It is also necessary for sustaining the UK’s position and reputation as a world-leading jurisdiction for the governing law of international transactions and for the resolution of disputes (though this already appears to be under some pressure as a result of Brexit).

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