Clementi sets out radical stall on law review

The man appointed by the Government to lead a sweeping review of UK legal services today (8 March) called for an umbrella regulator to police law firms - ruling out leaving the powers of bodies like the Law Society untouched.

Setting out the first detailed framework for his review since his appointment last year, Prudential chairman David Clementi outlined his two "polar" outcomes - both of which would introduce some form of profession-wide external regulation.

Clementi's first and most radical model is for the launch of a Legal Services Authority (LSA) responsible for training, rule-making, enforcement and complaints and discipline.

The proposals would leave bodies like the Law Society and Bar Council as representative trade unions with no regulatory power.

The other suggested model would see the creation of a Legal Services Board (LSB) that would sit as an umbrella regulator over existing legal regulators. Regulatory functions would be vested in the LSB but delegated to the professional bodies.

As a compromise, he suggested a third possible model where professional bodies would work beneath the LSB, but would be stripped of all their representative functions.

The models are contained in a review document issued today by Clementi as part of his review of legal services regulation in the UK and confirm expectations that the former Bank of England deputy chairman is to take a radical "pro-competition" stance.

Commenting on other specific reforms, Clementi backed the idea of "legal disciplinary practices", which would see barristers, solicitors and other closely-related professionals working in partnership.

The move is seen as a compromise, stopping short of wider links between lawyers and bankers and accountants under the multi- disciplinary partnership model.

Lawyers, representative bodies and consumers now have 12 weeks to respond to the consultation. Clementi will deliver his proposals to the Lord Chancellor Lord Falconer by the end of the year.

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