It’s over ten years since Sir David Clementi’s review of the regulation of legal services. It was to be expected that another would be forthcoming. We may not have expected two reviews of regulation being announced within two months of each other. But that’s what’s happened.
Government Review of ABS and Independent Regulation
The Government announced in November that it would be reviewing the legal services market with a view to abolishing the barriers to Alternative Business Structures and taking regulatory arms completely out of the remit of the professional bodies.
Competition and Markets Authority Review
In addition, in January the CMA announced that it was going to undertake a market study into the market for legal services, looking at:
- whether customers can drive effective competition by making informed purchasing decisions
- whether customers are adequately protected from potential harm or can obtain satisfactory redress if legal services go wrong
- how regulation and the regulatory framework impact on competition for the supply of legal services.
What might the Reviews cover?
Both reviews are clearly aimed at both making legal services more available and affordable for consumers, and at looking at the regulatory framework for legal services. It remains to be seen how far the reviews will go.
Matters which they could certainly look at are:
- How far the Legal Services Act requirements for due diligence before ABS firms are licensed are appropriate;
- Whether the regulatory arms of professional bodies should be given their freedom;
- How far the existing “reserved work” approach is appropriate;
- How you can encourage comparison websites in the legal sector;
- The balance between consumer protection and competition;
- The role for professional titles in the modern legal services world.
The SRA has made an early bid for freedom, citing research that suggests that people believe that solicitors should be independently regulated.
The Law Society has also published a consultation with its members on the future of regulation – proposing an independent regulator of minimum standards with the professional responsible for its own professional standards and ethics.
I’m going to be keeping a close eye developments and will be blogging and commenting as they happen. Watch this space.