Ministers eye making legal regulators independent from professional bodies

The Government will consult by Spring 2016 on making legal services regulators independent from their representative bodies, ministers have said.

The Treasury and the Department for Business, Innovation & Skills said in a 25-page paper, A better deal: boosting competition to bring down bills for families and firms, said the consultation would also cover the removal of barriers so that it becomes easier for alternative business structures, such as supermarkets and estate agents, to offer legal services like conveyancing, probate and litigation in England and Wales.

The paper said: “The government wants to ensure that innovative businesses are able to enter the market, providing greater choice for consumers. Alternative business models are around 15 percentage points more likely to introduce new legal services than other types of regulated solicitors’ firms.”

The legal services proposals are amongst a range of measures in the paper aimed at cutting red tape and reducing bills for businesses and families. Other proposals cover sectors such as communications (including broadband and mobile phones), energy, water, banking and pharmacies.

The Chancellor of the Exchequer, George Osborne, said: “This broad package of reforms will make markets work better for families. Driving competition will improve choice for people and ensure they get a better deal. And cutting red tape will help businesses grow and thrive.

“It’s the government’s responsibility to help foster the right conditions for competition and investment across the UK – that’s why the concrete steps we’re announcing make sure government, regulators and local authorities all play their part in promoting competition and removing market distortions.”

Sir Michael Pitt, Chairman of the Legal Services Board, said: "I welcome the government's intention to consult on reforming the legislative framework for the regulation of legal services. I am delighted that the proposals submitted to Ministers in conjunction with the eight legal services regulators in July have helped inform this important development.

“I believe these proposals will lighten burdens on business and streamline regulatory processes, all in the interests of delivering better services for consumers while promoting competition, deregulation and economic growth.”

Pitt added: “As our work with the other regulators earlier this year showed, there is a strong case for fundamental reform of the regulatory framework in this sector. Lack of independence between regulators and representative bodies is slowing reforms that would otherwise benefit both the profession and consumers."

Responding to the Government’s announcement, Law Society chief executive Catherine Dixon said: “We support the government's aim to ensure a fair and balanced regulatory regime for legal services.

“However, public protection demands that setting of rules and standards for legal services must be independent of government and ensure that there is no perception, or otherwise, that government is interfering with the independence of the legal profession. Freedom from government intervention is an essential cornerstone of our justice system and of the rule of law.”

She warned that England and Wales’s standing as the jurisdiction of choice was threatened by any suggestion that government was able to fetter the independence of the legal profession. “Any such perception, real or actual, would impact on our standing internationally and threaten the direct economic contribution of £23bn made by solicitors.”

Dixon added: “The legal profession must be free to set the standards and rules under which it operates, and also own legal education and training so that standards are led by the people who practise law.

“Enforcement of the rules and standards set by the legal profession, by an independent regulator would also be a further protection of the public and consumer interest.”

Chancery Lane’s chief executive said: “It is fundamental to any change that competition across the provision of all legal services must satisfy the aim to protect the public, enable access to services and maintain market confidence.”