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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Confidence in regulation

This is a conference* about ‘trust in the market’ and building confidence within the sphere of legal services regulation.  I shall therefore open with the observation (or reminder) that regulation is a public intervention in otherwise private transactions and free markets.  It must therefore stem from a political judgement that we should not have complete trust and confidence, and must instead rely on the intervention in the market. issue of how confidence in regulation develops and is then sustained is a fascinating one.  It begs preliminary questions of what we mean by ‘confidence’, and from whose standpoint we are assessing it.

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In-house lawyers and their moral compass: true north or magnetic interference?

The long-known tensions faced by in-house lawyers between serving their employer and staying true to their professional obligations receive some tough probing in research published today – with fascinating insights.  To what extent is the ethical imperative or ‘moral compass’ of in-house lawyers affected by their personal characteristics and by the overt, subliminal or cultural influences within their client-employer organisation?  The short answer is that it is affected, by many influences, contexts and drivers, and to varying extents.  As the lead author, Professor Richard Moorhead, says, the research report provides “as rich a picture of what it means to be an ethical in-house lawyer as has ever been attempted”.  A summary is available, and the full report can be downloaded here.

Evidence of the tension in in-house legal practice is perhaps most acute in the finding that almost 50% of respondents agreed that actions were sometimes taken in their organisations that were against their advice on legally important matters.  More than a third also agreed that loopholes in the law should be identified that benefit their employers.  These and other findings raise interesting and important questions about the extent to which lawyers’ professional codes are being diligently applied by in-house lawyers.  It might also perhaps prompt one to wonder ‘where were the lawyers?’ when various corporate scandals were being perpetrated….

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