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Self-regulation ends for legal profession in England

 

2008-08-28

 

SOURCE: Grey Areas Newsletters
AUTHOR: Richard Steinecke

As of September 1, 2008, the Legal Services Board will be appointed for England and Wales. The Board will be the single independent oversight regulator of legal services in England. What is unique about the Board is that it is not wholly or even substantially selected by the legal profession. It is entirely appointed by the government.

While some of the appointees are barristers or solicitors, most are not. They were chosen for their experience in consumer issues, regulatory experience, the legal sector and public service. Some are consumer advocates and many have worked with government or public regulatory organizations in the past.

The Board will have three years to establish its infrastructure and fully assume its regulatory role. It will act as an “oversight regulator” for all bodies involved in the regulation of legal services.

The Board is part of a comprehensive package of reform (Legal Services Act 2007) of the regulation of the legal profession in England. The purpose of the reforms is described by the English government as follows:

“The current regulatory framework is complex and fragmented, with regulatory anomalies and gaps, which make it confusing for consumers. The new system will put an end to this confusion and will establish a clear, flexible and transparent system, which is responsive to consumer needs, with a single set of regulatory objectives.”

A second component of the reforms is the establishment of the Office of Legal Complaints (OLC). The OLC will be established and monitored by the Board. The OLC will be completely independent of the legal profession. The OLC “will administer an ombudsman scheme that will deal with all consumer complaints about legal services… Legal service providers would be required to maintain ‘in-house’ complaints handling procedures, which will have to satisfy any requirements set by the [Board], to deal with complaints made by consumers in the first instance. The OLC will then handle all complaints made against providers that cannot be resolved at the local level. This will remove the current uncertainty amongst consumers as to where, or to whom, they should address their complaint.”

The third component of the reforms is to permit alternative business structures (ABS):

“Different types of lawyers, and non-lawyers will be able to work together in innovative practices, including 'one-stop shops', which can deliver packages of legal and other services in more consumer focussed and convenient ways.

“The [Board] will supervise all licensing authorities (i.e., those bodies that regulate ABS) and will make rules governing how it carries out this supervision. It will also have powers to decide which bodies may become licensing authorities and it can in certain circumstances become one itself.”

This alternative business structures reform is not dissimilar to some of the recommendations made by Canada’s own Competition Bureau over the past year.

These reforms are similar to some of the recent measures taken with respect to the medical profession in England, which has also lost a significant measure of its authority to regulate itself. While it is difficult to determine with certainty the causes of the loss of self-regulation in England in the two professions most associated with the concept over the past few centuries, two factors emerge as significant.

First, there appeared to be an inability of professional bodies to separate their regulatory and self-interest roles. This became obvious in the submission of the General Council of the Bar (the group for barristers) on the Legal Services Act 2007. It began its submission as follows:

“The Bar Council is the professional body that represents the interests of 14,000 barristers in England and Wales. As the governing body for the Bar it has a dual role in representing the interests of barristers and of regulating their work in the public interest.”

Regulators wishing to avoid a similar fate should ensure that they have two independent organizations, one for self-regulation and one for advocacy. And, the regulatory organization should be careful to avoid even a perception of becoming influenced by professional advocacy interests.

The second factor was the poor handling of consumer concerns. It would be fair to say that there were regulatory scandals, fanned by the media, that prompted significant government intervention. Constantly enhancing its ability to effectively and transparently handle consumer concerns is essential to the long term viability of the self-regulatory model. Of course this is easier said than done.

For more information, see: www.justice.gov.uk/docs/legal-services-reform-update.pdf and www.justice.gov.uk/news/newsrelease170708a.htm .

Richard Steinecke is the senior partner in the Toronto law firm Steinecke Maciura LeBlanc. He practises exclusively in the area of professional regulation. This article is reprinted with permission from the August 2008 issue of Grey Matters (No. 126), a newsletter published by Steinecke Maciura LeBlanc. Copyright 2008 Steinecke Maciura LeBlanc.