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 thatthe 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).
(An edited version of this post first appeared in The Times‘s The Brief on 8 January 2016)
As 2015 slides inexorably into 2016, we can ponder what differences this might bring to the world of legal services. The sands are definitely shifting, and the foundations of ‘old law’ continue to crumble as ‘new law’ takes greater hold. Let me explore three themes: demand, supply, and independence.
This month marks the tenth anniversary of the publication of Sir David Clementi’s final report on the regulatory framework for legal services in England & Wales. How time flies! The report is still a good read, and a helpful reminder of what needed to change – and why.
The report laid the foundations for the Legal Services Act 2007 (even though the Act went further on alternative business structures than Sir David was willing to recommend). Its principal aims can be summarised as:
creating the Legal Services Board and establishing the principle of regulation that is independent from professional representation
improving the way in which – and the speed with which – complaints against legal services providers are handled, including setting up the Office for Legal Complaints and the Legal Ombudsman
liberalising the business structures through which lawyers can operate by permitting ownership and investment by individuals who have not qualified as lawyers, and allowing legal businesses access to external capital.
All of these primary objectives have been achieved – more or less. So what now?