BSB to regulate "advocacy-focussed" ABSs, allow barristers to conduct litigation

The Bar Standards Board has decided in principle to regulate "advocacy-focussed" alternative business structures and allow barristers to apply to conduct litigation.

At a board meeting on 28 April, the regulator of the Bar in England and Wales agreed that it would regulate advocacy-focussed ABSs, legal disciplinary practices and barrister-only entities.

These BSB-regulated entities will be able to provide the same services as those provided by the self-employed Bar.

However, the regulator has chosen to shy away from covering multi-disciplinary partnerships. It will also impose a number of restrictions:

• All owners of BSB-regulated entities must also be managers; there will be a 25% limit on non-lawyer owners/managers of alternative business structures
• A majority of the owners/managers of ABSs regulated by the BSB will have to be barristers or other advocates with higher rights of audience
• BSB regulated entities and self-employed barristers will not be permitted to hold client money
• All managers of BSB regulated entities – barristers, solicitors and non-lawyers – will be subject to the same conduct rules.

As part of the shake-up, barristers and BSB-regulated entities will be able to apply to conduct litigation.

In other moves, the BSB decided to allow barristers to practise as managers or employees of ABSs regulated by other approved regulators when Part V of the Legal Services Act 2007 comes into force. Barristers will also be allowed to have ownership interests in ABSs “subject to the development of rules and guidance on managing any resulting conflicts of interest”.

BSB chairwoman Baroness Ruth Deech said: “Nearly 75% of respondents to our consultation agreed that BSB regulation of entities would be in the public interest. I am pleased that the Board has listened to the profession and other respondents and has taken this bold step forward, promoting choice and increasing access to justice.

“We intend to target our regulation on advocacy focussed entities, taking a risk-based and proportionate approach. We hope that this decision will allow barristers the freedom to react to changes in the legal market and permit them to devise new ways of working in order to remain competitive and better serve the public.”

Baroness Deech said much hard work was still to come. This will include development of a detailed regulatory framework, draft rules and options, which will include a further cost analysis. The BSB chairwoman said this would be issued for consultation in autumn 2011.