LSB reviews independence of law watchdogs

The Legal Services Board (LSB) has launched a review of regulatory independence in the profession as the oversight body moves to flesh out the framework governing the business of law.

The LSB today (25 March) launched a consultation on the separation of regulatory and representative functions at eight approved regulators designated under the Legal Services Act (LSA), including the Law Society and Bar Council.

The consultation paper addresses the internal governance of the approved regulators and the control of practising certificate fees.

The review is aimed at ensuring that regulatory and representative functions are fully separate on an operational level, a policy required under the Legal Services Act.

To monitor compliance, the LSB proposes placing a requirement on the Law Society and Bar Council as well as their regulatory arms to certify their compliance with rules on independence in the LSA at regular intervals.

The review will also examine measures to give sufficient control of shared services used by regulatory divisions, such as HR, finance and IT, to allow freedom from the trade representative arms.

The paper floats a vetting regime for the setting of practising certificate fees, which would require front-line regulators to get the LSB's approval.

It is unclear the extent to which the review will impact on the Law Society and Bar Council. Both bodies have already taken a number of moves to separate their regulation and representative arms with the creation of the Solicitor's Regulation Authority (SRA) and the Bar Standards Board respectively.

However, it is possible that some proposals would require processes to more fully separate bodies' trade union and watchdog functions.

The review closes on 26 June with the rules set to be published in November and come into effect from 2010.

The paper states: "As our first major policy act, we are consulting on the issue of regulatory independence... Our work now is about ending, once and for all, any perception that lawyers run the regulatory system for themselves. It is about entrenching a regulatory agenda that is in the public and consumer interest."

LSB chief executive Chris Kenny (pictured above) said: "Under the LSA, we are required to make rules on regulatory independence. That independence is not yet a done deal - we need to provide the detailed rules under the Act's broad framework."

SRA board chair Peter Williamson commented: "Independent and transparent regulation in the public interest is a cornerstone of the LSA. It is vital that regulation of legal services is, and is seen to be, independent from representation of the profession, to secure the confidence and trust of consumers."

The LSB's review comes during a period of mounting public debate over nature and independence of legal services regulation in the UK. Notably, the Law Society last year asked former Beachcroft senior partner Lord Hunt to conduct a review of the regulatory framework for the legal profession.

Other bodies, including the College of Law in a recent paper, have pressed the case for large law firm to receive distinct regulation from high street law firms.

Responses should be sent to: consultation@legalservicesboard.org.uk

For more, see Editor's Blog: Will the real legal services regulation review please stand up?