mayson 2013 review of legal services regulatory framework

www.stephenmayson.com

ReviewofLegalServicesRegulatoryFramework

ResponsetoCallforEvidence

ProfessorStephenMayson

September2013

ReviewofLegalServicesRegulatoryFramework 1

Contents

Section1. Introduction

1.1 Thenatureofthisresponse 41.2 Summary 4Section2. Concernswiththecurrentregulatoryframework

2.1 Introduction 72.2 Thecentralityofreservedlegalactivities 72.3 Thecomplexityofregulatoryfocus 82.4 The‘missionaryzeal’ofregulators 82.5 Over-emphasisonmarket,competitionandconsumers 92.6 Inadequatelyresourcedregulators 10Section3. Objectivesforlegalservicesregulation

3.1 TheLegalServicesAct’sregulatoryobjectives 123.2 Overridingobjectivetoregulateinthepublicinterest 123.3 Primaryobjectives 13 3.3.1Supportingtheconstitutionalprincipleoftheruleoflaw 13 3.3.2Protectingandsupportingtheproperandeffectiveadministrationofjustice 14 3.3.3Protectingandsupportingaccesstojustice 14 3.3.4Encouragingindependent,strongandeffectivelegaladviceandrepresentation 15 3.4 Subordinateobjectives 16 3.4.1Promotingandmaintainingadherencetotheprofessionalprinciples 16 3.4.2Enablingcompetitionintheprovisionoflegalservices 173.5 Therelationshipbetweenoverriding,primaryandsubordinateobjectives 183.6 Someoriginalregulatoryobjectivesnolongerrequired? 19 3.6.1Protectingandpromotingtheinterestsofconsumers 19 3.6.2Increasingpublicunderstandingofthecitizen’slegalrightsandduties 20 3.6.3Encouragingadiverselegalprofession 223.7 Anewstatementofregulatoryobjectives 23


Contents(continued)Section4. Principlesunderpinningfurtherreform

4.1 Timingandextentoffurtherreform 254.2 Regulatoryobjectivesandprinciplesforreform 254.3 Principlesforfurtherreform 25 4.3.1Achievingtheregulatoryobjectives 25 4.3.2Separatingregulatoryandrepresentativefunctions 26 4.3.3Matchingpublicexpectationandthescopeofregulation 27 4.3.4Generatingconfidenceinjusticeandlegalservices 28 4.3.5Effectivenessoftheregulatoryframework 29Section5. Thescopeandnatureoflegalservicesregulation

5.1 Theextentoffurtherreform 305.2 Currentreservedlegalactivitiesasafundamentalflaw 305.3 Otherapproachestoregulation 305.4 Usingalternativestoregulation 31 5.4.1Self-regulation 31 5.4.2Informationandeducation 32 5.4.3Co-regulation 32 5.4.4Economicinstrumentsorincentives 32 5.4.5Nonewintervention 335.5 Redesigningthescopeandnatureoflegalservicesregulation 33 5.5.1Theprinciplesforlegalservicesregulation 34 5.5.2Thenatureandconsequencesofregulation 39 5.5.3Conclusion 40Section6. Anewapproachtolegalservicesregulation

6.1 Foundationsofregulation 426.2 Whatshouldberegulated:potentialpublicgoodreservations 42 6.2.1Activitiesconnectedtotheadministrationofjusticeanddueprocess 43 6.2.2Notarialactivities 46 6.2.3Immigrationadviceandservices 47 6.2.4Publiclawadviceandservices 49 6.2.5Property-relatedactivities 49


Contents(continued)6.3 Whatshouldberegulated:potentialconsumerprotectionreservations 53 6.3.1Willwriting 54 6.3.2Probateandtheadministrationofestates 55 6.3.3Insolvencypractice 56 6.3.4Claimsmanagementservices 576.4 Whatshouldberegulated:regulationofnon-reservedlegalactivities 586.5 Whoshouldberegulated 606.6 Howtheyshouldberegulated 606.7 Bywhomtheyshouldberegulated 606.8 Summary 62Bibliography 63


Section1.Introduction

1.1 Thenatureofthisresponse

ThispaperrespondstotheinitialcallforevidenceissuedtostakeholdersbytheMinistryofJusticeon5June2013inrelationtoareviewoftheregulatoryframeworkforlegalservices.

I submit this response in a personal capacity; all views expressed here are my own and shouldthereforenotbeattributedtoorassociatedwithanyorganisationwithwhichIamconnected.

1.2 Summary

IidentifyinSection2anumberofconcernswiththecurrentregulatoryframeworkforlegalservices.Aftersettingouttheseconcerns,thepaperconsidersinSections3and4theobjectivesandprinciplesthatmight guide the future ‘architecture’ of the regulation of legal services. It then addresses inSection 5 the current and potential future scope and nature of legal services regulation, andconcludesinSection6withsomethoughtsaboutanewapproachtoregulationcoveringwhatshouldberegulated,whoshouldberegulated,howtheyshouldberegulated,andbywhomtheyshouldberegulated.

Myprincipalconclusionsareasfollows.

1.2.1 Concernswiththecurrentregulatoryframework

Section2:Thecurrentframeworkraisesconcernsinrelationto-

• thecentralityofillogicalreservedlegalactivities

• thecomplexityofregulatoryfocus(onactivities,individuals,entitiesandtitles)andmultipleregulators

• the‘missionaryzeal’ofregulators

• over-emphasisonmarket,competitionandconsumers

• inadequatelyresourcedregulators.

1.2.2 Objectivesforlegalservicesregulation

Section3:Forthefuture,thereshouldbeahierarchyofregulatoryobjectives-

• anoverridingobjectiveofprotectingandpromotingthepublicinterest

• theoverridingobjectivewouldbesupportedbyprimaryobjectives(suchassupportingtherule of law; protecting and supporting access to justice and the proper and effective


administrationofjustice;andencouragingindependent,strongandeffectivelegaladviceandrepresentation)

• theoverridingandprimaryobjectiveswouldbefurthersupportedbysubordinateregulatoryobjectives(suchaspromotingandmaintainingadherencetotheprofessionalprinciples,andenablingcompetitionintheprovisionoflegalservices)

• theneedforcertainofthecurrentregulatoryobjectivesmightbequestioned:protectingandpromoting the interests of consumers (its functions and intentions are covered by otherobjectives);increasingpublicunderstandingofthecitizen’slegalrightsandduties(toobroadandamulti-agency responsibility); andencouragingadiverse legalprofession (toonarrowandunnecessaryifanti-discriminationlawsareapplied).

1.2.3 Principlestounderpinfurtherreform

Section4:Anyfurtherreformshouldbedrivenbytheneedto-

• achievetheregulatoryobjectives

• fullyseparateregulatoryandrepresentativefunctions

• matchpublicexpectationsandthescopeofregulation

• generateconfidenceinjusticeandlegalservices

• achieve an effective regulatory framework which results in simple, appropriate,proportionate,cost-effectiveandresponsiveregulation.

1.2.4 Thescopeandnatureoffuturelegalservicesregulation

Section5:Futurefoundationsoflegalservicesregulationshouldbebasedon-

• regulationonlywhereitisinthepublicinterestandeitherthealternativestoregulationarelesseffectiveorregulationprovidesadditionalprotection

• amorecoherentsetofreservedlegalactivities

• addressingthecurrentregulatorygapwherebynon-reservedlegalservicesprovidedbynon-authorisedpersonscannotbesubjecttodirectregulation.

1.2.5 Anewapproachtolegalservicesregulation

Section6:Anewapproachtoregulationcouldbefoundedon-

• aninvestigationofarevisedsetofreservedlegalactivitiesbasedontheneedtosecurepublicgood or consumer protection (including legal activities connected to the administration of


justiceanddueprocess,notarialactivities,immigrationadviceandservices,publiclawadviceand services, conveyancing, intellectual property activities,willwriting, probate and estateadministration,insolvencypractice,andclaimsmanagementservices)

• theregulationofallother‘legalactivities’,withaccesstotheLegalOmbudsman

• theregulationofallprovidersoflegalservices,whetherauthorisedornot

• oneregulatoronlyforeachofthereservedlegalactivities

• a reassessment of how best to achieve consistency of policy and implementation, andimprovedcost-efficiency,acrosstheregulationoflegalservices.


Section2.Concernswiththecurrentregulatoryframework

2.1 Introduction

ThesubstanceofthecurrentregulatoryframeworkforlegalservicesinEnglandandWalesderivesfrom theLegalServicesAct2007, itself the resultofa reviewbySirDavidClementias recentlyas2004andstillnotfullyimplemented.

This Section addresses a number of concerns that arise about the policy, structure andimplementationofthisframework.

2.2 Thecentralityofreservedlegalactivities

GiventhestructureoftheLegalServicesAct,thenatureandscopeofthereservedlegalactivitiesiscentraltothestructureandimplementationofitsprovisions.Theseactivitiesaffect,forinstance,thedesignationofapprovedregulatorsandlicensingauthorities,theauthorisationofapprovedpersons,theissueof licencestoalternativebusinessstructures,theapprovalofHeadsofLegalPractice,andthe extent of the Legal Ombudsman’s jurisdiction. Unfortunately, there appears to be no policyrationalethatsupportsthechoiceofthisgroupoflegalactivities,takenasawhole,forsuchacrucialrole1.

Thedifficultywiththecurrentstatutorystructureliesnotsomuchwithwhatitcoversbutwithwhatit does not. There is awidespreadmisconception (including among some lawyers), aswell as anexpectationthatalllegalservicesareregulated.Thecurrentregulationofnon-reservedactivitiesisanincidentaleffectwherethoseactivitiesareprovidedbyapersonauthorisedtodeliveroneormoreof the reserved activities. Such regulation is a consequence of the approved regulators’ wish toregulatealloftheprofessionalactivitiesofthosewhofallwithintheirreach,butdirectregulationofthemisnotanintentionoftheAct.

The‘regulatorygap’thatariseswhennon-reservedactivitiesarelegitimatelyprovidedbythosewhoarenot–anddonotneedtobe–authorisedpersonscreatesthelargestthreattotheAct’sintentions.In seeking to encourage competition and innovation in the delivery of legal services, and in theexpectationthatthiswouldleadtobetterservice,bettervalueandfewerservicecomplaints,theActhasalsocreatedthepossibilityandprospectofsome80%2oflegalservicesbeingprovidedbythosewhocouldnotcurrentlyberegulated. Absentthedevelopmentofvoluntaryjurisdiction(which,bydefinition,willprobablyexcludetheprovidersinrespectofwhomthereareregulatoryorconsumerconcerns),theLegalOmbudsman’sjurisdictionissimilarlyhampered.

1SeeLegalServicesInstitute(2010)Reservedlegalactivities:historyandrationale:availableat

http://stephenmayson.files.wordpress.com/2013/08/mayson-marley-2010-reserved-legal-activities-history-and-rationale.pdf,andLegalServicesInstitute(2011)Theregulationoflegalservices:whatisthecaseforreservation?:availableathttp://stephenmayson.files.wordpress.com/2013/08/mayson-marley-2011-what-is-the-case-for-reservation.pdf.

2Thispercentageestimateisadmittedlybasedonanecdotalratherthanempiricalevidence,butisneverthelessconsistentacrossconversationswithlawyersandlawfirmsirrespectiveofnatureofpractice,size,andgeography.Eveninfirmsthatspecialisein,forexample,conveyancing,willsandprobate,orlitigation,thenatureofthereservedlegalactivityineachcaseissonarrowlydrawnthatthepercentageofworkconductedthatisinfactreservedremainsataboutthe20%level.


Theextensionofreservedlegalactivities,asenvisagedbysection24,isaratherblunt(andpossiblydisproportionate)instrumentforachievingtheregulationofadditionallegalactivities.Indeed,giventhatonlya ‘legalactivity’canpresentlybeconsideredforreservation,theassumptionmustbethatthe extension of the regulatory net through reservation can necessarily only be achieved on apiecemeal,case-by-case,basis.

2.3 Thecomplexityofregulatoryfocus

Aninevitableconsequenceofthecentralityofthereservedlegalactivitiesdescribedinparagraph2.2above is that the fundamental approachof theLegal ServicesAct is thusactivity-based. However,some of the real force of regulation in relation to certain (non-reserved) activities can only beachievedthroughacombinationofregulatingauthorisedpersons–whetherindividualsorentities–aswellasprotectedtitles3.TheAct’sstructuredoesnotthereforedomuchtoaddressthe‘regulatorymaze’identifiedbytheClementiReview:ifanything,itreplacesitwitharegulatorypatchwork.

Such a multi-focused approach leads to varied approaches to regulation resulting from multipleapproved(front-line)regulatorsapplyingdifferentrequirementsfortheawardofprofessionaltitlesorauthorisationtoconductthesamereservedlegalactivities.Arguably,thebiggestdrawbackofthecurrentframeworkisnottheoversightroleoftheLegalServicesBoardbuttheoverlappingrolesoftheapprovedregulators.

Thereisthusanabsenceofunderlyingcoherenceandconsistencytotheregulationoflegalservices4whichaddscomplexityandpotentialconfusiontotheregulatoryframework.Giventheimportanceoflawandlegalservicestothepublicinterest5,thisisregrettable.Althoughtheapprovedregulatorsclaimtoberegulatinginthepublicinterest,Ibelievethatitwouldbemoreaccuratetoobservethattheyaremore inclinedto justify theirpreferredapproachbyreferenceto thepublic interestratherthantrulytoberegulatinginandforthepublicinterest.

2.4 The‘missionaryzeal’ofregulators

The Legal Services Act sets out its eight regulatory objectives in section 1. I shall address thecontinuingnatureandrelative importanceoftheseobjectives inSection3below. Theseobjectiveswerestatedat thetimenottobe inanyorderofpriority,or tobe interpretedorapplied insuchaway that somewould have supremacy over the others6. However, it appears that this presumedparityofobjectivesisnotinfactbeingadoptedinpractice.

The Legal Services Board regularly (and, in my view, inappropriately) privileges one regulatoryobjectiveovertheothers,bysuggestingthatitregulates‘intheinterestsofconsumers’.Forexample,onitswebsite,andinitsbusinessplanfor2013-14,theBoardstatesthatitsgoal isto“reformand

3GiventheAct’sfocusonreservedlegalactivitiesandauthorisedpersons,itisstrangethatonlysomeprofessionaltitlesare

protectedratherthanallthetitlesofthosewhoareauthorisedtodeliverreservedlegalactivities.4Cf.footnote2.5Cf.Mayson(2013)Legalservicesregulationand‘thepublicinterest’:availableat

http://stephenmayson.files.wordpress.com/2013/08/mayson-2013-legal-services-regulation-and-the-public-interest.pdf.

6SeeHansardOfficialReport,HLDeb9January2007c.129,BaronessAshtonofUpholland:“TheJointCommitteerecommendedthattheExplanatoryNotesshouldmakeitexplicitthattheobjectiveswerenotlistedinorderofimportance.Weagreedwiththat,andtheExplanatoryNotesreflectit.”


modernisethelegalservicesmarketplaceintheinterestsofconsumers”.Ifthenotionofprioritisingtheregulatoryobjectivesremainsunacceptable,thentheLSBshouldbe(andshoulddeclareitselftobe)regulatingconsistentlywithalltheregulatoryobjectivesratherthanstatingthatitsgoalfavoursoneofthem.

ItispossiblethatLSBandotherregulatorsmightwishtoprayinaidparagraph28oftheExplanatoryNotestotheLegalServicesAct,whichstates:“TheActdoesnotranktheseobjectivesandprinciplesinorderofimportance.TheLegalServicesBoard,theOfficeforLegalComplaintsandtheapprovedregulatorswillbebestplacedtoconsiderhowcompetingobjectivesaretobebalancedinaparticularinstance.”Inthatcase,however,IwouldwishtorefertotheviewexpressedbySirDavidClementiinhis final report that (2004: 28): “In a regulatorybody thepublic interest shouldhaveprimacy”. Istronglybelieve that theconsumer interestand thepublic interestarebynomeans thesame,andthereforeshareSirDavid’sviewthat ifanyof theregulatoryobjectives is tobeprivilegedovertheothersthenitshouldbe‘protectingandpromotingthepublicinterest’7.

Further, as reflected in the quotation above, the LSB also pursues a goal of ‘reforming andmodernising’and,aspartof that,oftenexpressesapositivemissionto increasecompetition in themarketplace.WhileIcertainlywishtosee(andsupport)reform,modernisationandcompetitioninthe legal servicesmarket, I amuncomfortablewith the idea that an oversight regulator should besettingtheseasitsgoals.ItseemstomethattheregulatoryoversightisdischargedbyenablingthechangesinregulationthattheActenvisages(suchastheseparationofregulationandrepresentation,the creation of the Legal Ombudsman and a better approach to complaints handling, and thelicensingofalternativebusinessstructures).

Of course, these statutory changes and their consequential regulatory frameworks need to beimplemented,andit istheLSB’sroletooverseethis implementation. Inthissense,theLSBshouldcertainly oversee the changes in regulation that permit and encourage modernisation andcompetition. Idonot,however,seethattheActrequiresmodernisationandcompetition8suchthatthese thingsbecomegoalsof the regulator in theirown right. Whetherornotmodernisationandcompetition actually follow from regulatory reforms must, to my mind, be the outcome ofindependentactors(whetherfirmsandindividuals)choosingtotakeadvantageofthereformsratherthanthespecificmissionofanoversightorfront-lineregulator.

2.5 Over-emphasisonmarket,competitionandconsumers

By the timeofSirDavidClementi’s reviewof the regulatory framework in2003-4, law firmswerecompeting strongly among themselves for work and talent. However, that framework containedelementsthatinhibitedtheabilityofotherstocompetewithlawfirms(andwouldalsohavemadeitverydifficult for lawfirmstocompeteforworkandtalentagainstthoseothersortoraisecapital).So, although the marketplace was internally competitive, it was relatively closed and thereforeunder-developedcomparedtoothermarketsforprofessionalservices.

Theco-existenceofregulatoryandrepresentativefunctionsinthesameprofessionalbodieswasalsoout-dated and indefensible. Further, in spite of internal competition, the legal professions (andsolicitorsinparticular)tendednottodealwithclients’complaintsquicklyoreffectively.7SeefurtherMayson(2013).8Section1(1)(e)refersto‘promoting’competition,not(aswithaccesstojusticeinsection1(1)(c))‘improving’or(aswith

citizens’understandinginsection1(1)(g))‘increasing’:assuch,theActfocusesonintentratherthanachievement.Ialsointerpret‘promoting’initsenabling’senseratherthanitsproselytisingormarketingsense.


The Clementi Review and the subsequent Legal Services Act were therefore right to address theperceptionthatlegalserviceswerenotoperatingasapropermarketplace,andthattheinterestsofclientsandconsumerswerebeingneglected. Perhapsnot surprisingly, therefore, theWhitePaperthatprecededtheLegalServicesBillwasentitled ‘PuttingConsumersFirst’andcontainedmuchoftherhetoricofconsumerism,competitionandmarkets.Indeed,agooddealoftheresistancetothesereformsexhibitedbythelegalprofessionstookissuewiththisemphasis.

Having spent themajority ofmy professional and academic career encouraging lawyers to regardtheir endeavours as a business (albeit a regulated one), and to persuade them that commercial,efficientandprofit-seekingactivitiesarenotinherentlyantitheticaltoprofessionalethicsandvalues,IhaveconsistentlywelcomedandsupportedthebroadthrustoftheClementireforms.

However, my concern now is that the pendulum has swung too far in favour of competition andconsumerism,andtothedetrimentofabroaderbalanceinthelegalservicesmarket.Thisshifthasalso been detrimental to some of the fundamental objectives for the legal infrastructure of thecountry and the regulatory framework required to underpin it. I explore these fundamentalobjectivesinSection3below.

Forthetimebeing,asexamplesofthispoint,Ireferbacktoparagraph2.4aboveandtheexpressed‘mission’oftheLSBtoregulateintheinterestsofconsumers,andtoreform,moderniseandincreasecompetition; to the recentdiscussionsabout introducingprice-competitive tendering into legalaidcontracting; and to the Bar seeking to compete head-on with solicitors through increasing directclientaccessandinofferinglitigationaswellasadvocacyservices.

Inall of this, there is adiscourseandunderlyingphilosophy that competitionandconsumerism isbeneficial,andthatmarket forceswilldrivehigherqualityservicesandimprovedvalueformoney.Thereisnoevidencethatthiswillalwaysbethecase–and,arguably,muchevidencefromtheglobalfinancialcrisisthatevenregulatedmarketscandosignificantharmtosocietyandcitizens.

Despiteallthis,perhapsthegreatestdangertoclientsandconsumersoflegalservicesofthisshifttomarkets, competition and consumerism lies far less in what regulators and the regulatedcommunities do and substantially more in the provision of non-reserved legal services by thoseindividuals and entities that are not – and cannot be – regulated because of the ‘regulatory gap’referredtoinparagraph2.2above.Thiscangiverisetoconflictingpublicexpectationsthatmarketforceswill drive competition and innovation to benefit consumers, but that in any event all legalservicesareregulatedandsubjecttoredressifanythinggoeswrong.

Inconclusion,therefore,advancingcompetitionandconsumerinterestsmightunleashmarketforcesthat achieve some ‘public interest’ benefits (such as easier andmorewidespread access to better,perhaps cheaper, legal services). But if thosebenefits are achievedat the expenseof otherpublicinterestobjectives(suchasthedemocraticfabricofsocietywheresomecitizensareexcludedfromparticipation, or are denied access to legal services because of greater imbalances of power andresourcesresultingfromcompetition),thenoneshouldarguablyconcludethatthose‘publicinterestbenefits’arenot,infact,trulyin‘thepublicinterest’.

2.6 Inadequatelyresourcedregulators

BeforetheLegalServicesAct,front-lineregulatorsfocusedtheirattentiononthetraining,admission,and discipline of individuals, and they therefore had little or no experience of regulating entities.


Theyalsooperatedonarules-basedapproach,andmonitoringandenforcementfocusedonfailuretocomplywiththoserules.

There has now been a shift to outcomes-focused regulation, with a consequent emphasis on risk.AlthoughtheSRA,forexample,claimstooperatearisk-basedapproachtoregulationgenerallyandtoABSlicensinginparticular,itisquestionablethatithaseitherthenumbersofstaffortheexpertiseorexperiencetomakemeaningfulrisk-basedassessments.Theconsequencesarethattheregulatoryprocessisslowerandlessresponsivethanitneedstobe,andthattheapproachisinfactrisk-averserather thanrisk-basedandproportionate to therisk. As the largestregulatorof legalservices, theSRAhasnotsofardemonstratedthatscalenecessarilyleadtoefficientorcost-effectiveregulation.

Further, thedifferenthistories, sizeandscopeof thecurrentapprovedregulators leads to relativedisparity of approach and resourcing, as well as fragmentation and duplication of regulatoryresourceacrossthetotalityofregulatedlegalservices. Thispotentiallycreatesconfusionforclientandconsumers,cost-inefficienciesintheprovisionofregulation(withcostsbornedifferentlybytheregulated community and, ultimately, the fee-paying clients). The relationships of the approvedregulatorsamongthemselves,andwiththeLegalServicesBoard,is–atbest–oftenuncomfortable.

The need for this multiplicity of front-line regulators, and for an oversight regulator, would bearrevisitinggiventhepotentialinconsistencies,confusion,inefficienciesandcostsinvolved.


Section3.Objectivesforlegalservicesregulation

3.1 TheLegalServicesAct’sregulatoryobjectives

Based on the recommendations in Sir David Clementi’s review, the Legal Services Act establishedeightobjectivesfortheregulationoflegalservices(section1).Inprinciple,thoseobjectivesseemtometoremainvalid,butIbelievethattheycouldbenefitfromsomerefinement.

3.2 Overridingobjectivetoregulateinthepublicinterest

Inparagraph2.4above,Ihavealreadyexpressedtheviewthatprotectingandpromotingthepublicinterestshouldtakeprimacyinanyregulatoryobjectives. Ihavepreviously9articulatedameaningof‘thepublicinterest’inthecontextoflegalservicesregulation,whichis:

Thepublicinterestconcernsobjectivesandactionsforthecollectivebenefitandgoodofcurrentandfuturecitizensinachievingandmaintainingthosefundamentalsofsocietythatareregardedbythemasessentialtotheircommonsecurityandwell-being,andtotheirlegitimateparticipationinsociety.

On thisdefinition, thepublic interesthas twoprincipaldimensions: the fabricofsociety itself;andthelegitimateparticipationofcitizensinsociety.Thefabricofsocietyismaintainedbyfundamentalissuessuchasnationaldefenceandsecurity;publicorder,theruleoflaw,andtheadministrationofjustice; protection of the natural environment; effective government; and a sound economy(includingthefreemovementofpeopleandcapital). Participationisthensecuredandencouragedbypersonal andpublic health, education, andwelfare (including shelter andnurturingof childrenand dependants); access to justice; the protection of physical safety, human rights, personalautonomy10andfreedomofexpression11,andequality;andreliablepersonal,publicandcommercialrelationships.Justasthepublicinterestshouldtakeaccountoffuturecitizens,soparticipationmustprotectminorityorweakerinterestsaswellaspromotingtheactivitiesofthemajority.

Theviewtakenbycitizensofwhatisregardedbythemasfundamentalwillchangeovertime;andofcoursewhethersomethingisforthecollectivebenefitorgoodofsociety(inthesenseofacontinuingpoliticalcommunity)isitselfamatterofjudgement.Indeed,itisentirelypossiblethatnoonepersonor institution will be fully aware, at any given time, of all the factors that contribute to thefundamentals of society and citizens’ participation in it. Nevertheless, governments, judges andregulatorsare,arguably,electedorappointedasthetransitoryarbitersofthatjudgement–providedthat theyare takingasufficientlybroadandbalancedviewof theirremit,aselaboratedhere. Andprovidedalsothattheyaresufficientlyaccountablefortheirjudgementsandactions.

9SeeMayson(2013)Legalservicesregulationand‘thepublicinterest’:availableat

http://stephenmayson.files.wordpress.com/2013/08/mayson-2013-legal-services-regulation-and-the-public-interest.pdf.

10Meaningthat“individualsmusthaveasphereinwhichtheycanexerciseindividualchoiceswithoutinterferencefromothers(includingthestate)”:Leveson,2012:73.

11TheLevesonreportreferstofreedomofexpressionas“anaspectofabroaderpublicinterestintheautonomy,integrityanddignityofindividuals[which]isadimensiontothepublicinterestwhichhasaveryancienthistoryintheUKandaspecialplaceinpublicimagination.Itunderliestheiconicstatusofhabeuscorpusasanearlyguaranteeofpersonalliberty,anditunderliesthespecialimportanceoffreedomfrominterferenceinhomelife:‘anEnglishman’shomeishiscastle’.”(2012:73).


Applyingthenotionofthepublicinterestarticulatedabove,theregulationoflegalserviceswouldbeprotectingandpromotingthepublicinterestwhenit:

(1) positivelyupholdsthoseelementsoflegalservicesthatprotect,preserveorpromotethedemocraticfabricofsociety;and

(2) protectsorenhances,orremovesorreducesimpedimentsto,theabilityofcitizens,onan equal basis, to exercise their claims to civil, political or social freedoms andparticipation.

Tomymind, thiswouldprimarily involvesupportingtheconstitutionalprincipleof theruleof law(includingtheadministrationofjustice);improvingaccesstojustice;andencouragingindependent,strong and effective legal advice and representation. Inmy view, the administration of justice isnecessary tomaintaining the ruleof lawand securing access to justice12, and is therefore apublicinterest objective in its own right. These are all specifically ‘legal’ outcomes of the regulatoryobjectives, and are founded on a view of the law as an abstract set of rules and a system forupholdingthem.

However,beyondthis,societyalsoneedstoencouragereliabilityandstabilityinsocialrelationships(whichare central to good social order and commerce). Iwould thereforego further and suggestthatthepublicinterestshouldalsoextendtopromotingandprotectingtheUKanditsjusticesystemasalegalforum,aswellastoadvancingthecommercialinterestsof‘UKplc’.

On thebasis of this analysis, Iwould thereforenowpropose for consideration that the regulatoryobjectivesforlegalservicesshould,asanexpressionofpolicy,bedividedintoanoverridingobjectiveof ‘protecting and promoting the public interest’, along with other primary and subordinateobjectivesintendedtosupportit.

3.3 Primaryobjectives

Theruleof lawiskeytothesecurityandwell-beingofsociety,andaccessto justice isanecessaryplatformtobeingabletoassertone’srightsinaccordancewiththeruleoflaw.Maintainingtheruleof law also means that there should be an effective system of administration of justice, and thatstrongandindependentlegaladviceandrepresentationshouldexisttoholdanover-bearingState,orotherpowerfulagents,accountablewithinthelaw.Eachoftheseelementsisnecessaryinthepublicinterestofmaintainingthefabricofsocietyandenablingthelegitimateparticipationofcitizensinit.

Iwouldthereforesuggestthatthefollowingcouldbeconsideredtobeprimaryobjectives.

3.3.1 Supportingtheconstitutionalprincipleoftheruleoflaw

AsSirDavidClementiwroteinhisfinalreport(2004:15):

Theruleoflawembodiesthebasicprinciplesofequaltreatmentofallpeoplebeforethelaw,fairness,and a guarantee of basic human rights. A predictable and proportionate legal system with fair,transparent, and effective judicial institutions is essential to the protection of both citizens and

12TheLevesonreportalsohelpfullyrefersinthiscontextto“theproperindependenceandaccountabilityoflaw

enforcementagencies”(2012:70).


commerce against any arbitrary use of state authority and unlawful acts of both organisations andindividuals.

Thedemocraticfabricofsocietycannotbeprotected,preservedorpromotedwithouttheruleoflaw;norcanthelegitimateparticipationofcitizensinthatsocietybesecuredwithoutit.

3.3.2 Protectingandsupportingtheproperandeffectiveadministrationofjustice

Althoughnotexplicitlystatedasaregulatoryobjective in theLegalServicesAct, Ibelieve that it isimplicit inanynotionofthepublic interest,andinsupportingtheruleof lawandaccessto justice,that the effective administration of justice should also be protected and supported. Althoughachievingtheproperandeffectiveadministrationofjusticeisamulti-agencytaskandresponsibility,thoseresponsibleforlegalservicesregulationshouldexplicitlyberequiredtoconsidertheeffectsofregulationonthisvitalaspectofthepublicinterest–and, indeed,tobevocalwhenotheragencies’policiesoractionsmighttendtounderminetheadministrationofjustice.

Ratherthanleavingthisobjectiveasimplicitintheregulationoflegalservices,Ibelievethatitwouldbepreferableforthisimportantmanifestationofthepublicinteresttobemadeexplicitasaprimaryobjective.

3.3.3 Protectingandsupportingaccesstojustice

The correct role of regulatory influence on access to justice often polarises around the issue ofwhetherregulationpromotesorrestrictsaccess. Itisperhapsdifficulttofindanyevidencebasetosuggestaconclusiononewayortheother:nevertheless,theParliamentaryintentionatthetimetheLegalServicesBillmadeitspassagewasclearlytoencourageimprovedaccesstojusticebyliberatingthelegalservicesmarketfromsomeperceivedrestrictivepracticesandstructures.

Thechallengeisthattheconceptof‘accesstojustice’isopentomultiple(andpossiblycontradictory)interpretations. In the context of the current statutory obligation to improve it, the regulatoryobjectivepotentiallyplacesanimpossibleburdenonregulatorsunlessit is interpretedinanarrowway(tomean,ineffect,judicialdeterminationofdisputes)13.

Aswiththeeffectiveadministrationofjustice,thoseresponsibleforlegalservicesregulationshouldexplicitlyberequiredtoconsidertheeffectsofregulationonaccesstojusticeasavitalaspectofthepublicinterest–and,inthesameway,tobevocalwhenotheragencies’policiesoractionsmighttendtoundermineorreduceaccess.

Once regulatory restrictions are removed, arguably regulation should then be neutral onwhetherthosewhoprovidelegalserviceswillactuallyinnovatedeliveryandsoimproveaccesstojustice:thestructures andmethods throughwhich legal activities are provided should not, in principle, varywith regulation of these activities but rather attach to the entrepreneurial and professionalawarenessoftheproviders.Thisdoesnotimply,ofcourse,thattheeffectswillbeneutralorevenlydistributed:areviewofdevelopments in themarket for theservicesandproductsofoptometrists,

13SeeLegalServicesInstitute(2012)Improvingaccesstojustice:scopeoftheregulatoryobjective,particularlyatparas4.3.2

and4.4:availableathttp://stephenmayson.files.wordpress.com/2013/08/mayson-marley-dunn-2012-access-to-justice.pdf.


forexample,demonstrateshowuneventheeffectsmightbe. Nevertheless, theopportunitieswereequallyavailablealbeitdifferentlytaken.

Ratherthanimposinganobjectiveofimprovement,perhapsamoresuitableandrealisticobligationinshapingandimplementinglegalservicesregulation(aswithsomeoftheotherobjectives)wouldbetoexpressthisprimaryobjectiveas‘promotingandprotecting’,‘protectingandsupporting’or,attheveryleast,‘havingregardto’.

3.3.4 Encouragingindependent,strongandeffectivelegaladviceandrepresentation

The current equivalent regulatory objective in section 1(1)(f) is both more broad (it includesdiversity)andnarrow(itrefersonlytothelegalprofession)thanmightbedesirable14.Ishallreturntodiversity(seeparagraph3.6.3below).Inthepost-LSAworldoflegalservices,itwouldseemoddto confine the public interest in this objective to the legal profession rather than to the broaderprovisionoflegalservicesbythoseappropriatelyqualifiedorlicensed,whethermembersofthelegalprofessionsornot. SirDavidClementialso thought that “a strongandeffective legalprofession…wouldhelptoensureaccesstojustice,themaintenanceofahealthysupplierbaseforpubliclyfundedworkandcontinuedsupport forprobono initiatives, therebyservingthepublicinterest” (2004:17,emphasissupplied).

Thisregulatoryobjectiveisexpressedasacompoundidea,butthedifferentelementswithinitcouldbeaffectedinvaryingwaysbyregulation.Inrelationtoindependence,theLSBsays(2010:11):

Independent primarilymeans independent from government and other unwarranted influence. Anindependent profession serves to promote the principle that legal service providers should be freefrom inappropriate influence (financial or institutional) to act as anagentof the client, in theirbestinterests.

Ensuringtheindependenceofthelegalprofessionshasbeenafrequentlycitedreasonforprovidingregulatoryprotection. Forexample, if rightsof audiencewerenot reserved toauthorisedpersonswhoareappropriatelyqualified,theywouldfacecompetitionfromproviderswhomightnotadheretosimilarstandardsofindependenceandcompetence.Thus,regulationpotentiallyhasaroletoplayinpreservingtheindependenceoflegalservicesproviders,ascompetitionalonewouldbelesslikelytodoso.

The LSB considers a strong legal profession to be (2010: 12) “able to speak authoritatively onmattersof relevanceand is fully informedof consumerneedandhow tomeet it. Itsvoiceon lawreform and the wider justice system should not be weakened through regulation”. Strength istherefore tied in with independence – and both are underpinned by professional ethics andstandards–becauselegalpractitionersshouldbeabletospeakoutwithouthindranceonissuestheyfeelareimportant.Regulationmightthenplayakeyroleinmaintainingthisstrengthinthosewhoprovidelegaladviceandassistance.

Finally,theLSBsuggeststhataneffectivelegalprofessionwillbe(2010:12):

able to meet the changing needs of consumers and contribute to the meeting of the regulatoryobjectives.Theprofession’seffectivenessisasmuchdefinedbyconsumers’expectationsinitasitisbytheprofessionsandcoversquality,accessandvalue.

14Interestingly,SirDavidClementirecommended“aconfident,strongandeffectivelegalprofession”(2004:17).


Effectiveness isanoutcomethatresults frommanydifferent factors. These include:educationandtraining;qualityandutilityofadviceandservice;cost-effectivenessandvalueformoney;abilitytorelate toandcommunicatewith clients, so that theyareable tounderstandandactonanyadvicegiven(andwherediversityamongindividualsandentitiescouldbeamajorfactor)15;andefficiencyandinnovation(whichcanbestimulatedbyfaircompetition).Manyoftheregulatoryobjectivesthatarepresentlywithin section1(1)of theLegal ServicesAct could thereforebe seen to support andenhance a primary objective of encouraging independent, strong and effective legal advice andrepresentationand,forthisreason,couldberegardedassubordinateobjectives.

3.4 Subordinateobjectives

Adopting a hierarchy of regulatory objectives, with an overriding regulatory objective (protectingandpromoting thepublic interest)which isdirectlysupportedbyprimaryobjectives,wouldallowfor those objectives being further supported by subordinate objectives. Taking the currentregulatory objectives in the Legal Services Act, there are some objectives which are stillunquestionablyimportant,eveniftheywerenotcategorisedasprimaryobjectives:theycontributeto the effectiveness of the primary objectives. In this sense,wemight say that it is in the publicinterest that they are promoted but that they are not, in themselves,manifestationsof the publicinterestinthewaythattheprimaryobjectivesare.

Iwouldthereforesuggestthefollowingcouldbeconsideredtobesubordinateobjectives.

3.4.1 Promotingandmaintainingadherencetotheprofessionalprinciples

Theprofessionalprinciplesaredefinedinsection1(3)oftheLegalServicesAct2007asapplyingtoauthorisedpersons,whoshould:actwithindependenceandintegrity;maintainproperstandardsofwork;actinthebestinterestsoftheirclients;maintainclientconfidentiality;and,whenexercisingarightofaudienceorconductinglitigation,complywiththeirdutytothecourttoactintheinterestofjustice. These are the bedrock of what all professionals would regard as their proper ethicalframeworkandare,inthissense,uncontentious.Itisrightthattheseprinciplesshouldberequiredofallthoseindividualsandentitiesauthorisedtocarryourregulatedlegalservicesactivities.

Itisinteresting,though,thatthereisnoexplicitprofessionalprinciplerequiringauthorisedpersonstoactinthepublicinterest,eitherintheActorintheapprovedregulators’codesofconduct.ThisisincontrasttotheCodeofEthicsissuedbytheInternationalFederationofAccountantswhichstatesthat16“Adistinguishingmarkoftheaccountancyprofessionisitsacceptanceoftheresponsibilitytoactinthepublicinterest”.

Actinginthebestinterestsofclientsistoooften,tomymind,usedbylawyersasajustificationfortheiractionswhenthoseactionsinfactcompromiseindependence,underminethepursuitofjustice,or run counter to the public interest. It is not necessarily in the clients’ best interests for theiradvisers simply to do their bidding; their ‘enlightened’ best interests might suggest that theiradvisersshouldactoradvisedifferently.Perhapsoutcomesfocussedregulationwillencouragemoreenlightened action. However, if protecting and promoting the public interest were to become an15Placingaprimaryemphasison(abroadnotionof)theeffectivenessoflegaladviceandrepresentationwouldleadto

furtherquestionsaboutwhetherseparateobjectivesrelatingtodiversityandcitizens’generalunderstandingoftheirlegalrightsanddutiesremainnecessary:seefurther,para3.6.3below.

16Seehttp://www.ifac.org/sites/default/files/publications/files/2013-IESBA-Handbook.pdfatSection100.1.


overridingregulatoryobjective in the future, itwouldbenobadthingtoconfirmasaprofessionalprincipletheneedforregulatedpractitionerstoactinthepublicinterest.

Authorisedpersons currentlyhave adual obligation: a legal requirement to complywith theAct’sprofessionalprinciples,andaduty(insection176oftheLegalServicesAct)tocomplywiththecodesofprofessionalconductsetbytheirapprovedregulator.TheLegalServicesActalsorightlyprohibits(bysection90)anynon-authorisedpersonsconnectedtoalicensedbody(thatis,anABSlicensedtodeliveroneormoreofthereservedactivities)frominterferingwithsuchcompliancebyeitherthatlicensedbodyoranauthorisedperson.

Theinclusionofprofessionalprinciplesandadherencetothemwithinthestatutoryframeworkfortheregulationoflegalservicesisthereforetobewelcomedandshouldbemaintained.Theyarepartoftheassurancetothepublic,tothecourts,toclients,andtoconsumersandmarketsatlargethatallproviders of regulated legal services must abide by certain standards of ethical practice thatsubordinatetheproviders’personalandeconomicintereststothoseofothers.

3.4.2 Enablingcompetitionintheprovisionoflegalservices

Economictheorywouldsuggestthatperfectlycompetitivemarketsactastheunderlyingregulatorinsecuringthecorrectoutcomesineconomicexchanges. However,thenotionofperfectmarketsisatheoreticalconstructandtheywillnotbefoundintherealworld.Consequently,‘marketfailures’ofvariouskindswillinevitablyariseandregulationwillbeneededtoaddresstheminordertorestoreadegreeoffairness.

This is not an either-or situation (that either regulation or competition is suitable for a givenmarket);thatwouldbeanundulysimplisticviewtotake.Competitioncansuccessfullyco-existwithregulation, and the latter may be seen as a way of creating and sustaining consumer confidencewithinamarket. Any lossofconfidencecouldresult inconsumerseithernotbuyingatall,oronlybuying from a limited number of suppliers with whom they are already familiar; neither wouldprovidescopeforencouragingcompetition.

TheLSBhasdeclareditself infavourofcompetitioninthelegalservicesmarket,havingstatedthat(2010:9):“Individualprovidersoflegalservicesshouldcompeteforcapitalandconsumers,soastodrive better performance for both sides”. In the context of legal services, the very creation ofregulations leads to some barriers to entry (usually the need for appropriate qualification orlicensing)andthereforeinsomewayinhibitscompetition.

However, assuming that regulation is justified in the public interest, once the threshold level formarketentryhasbeenachieved,thereisnonecessaryincompatibilityinthenallowingcompetitionamong thosewhohavebeenpermitted to enter themarket. Arguably, this is oneof theprincipalobjectivesofalternativebusinessstructuresandtheABSlicensingframework.Inhisfinalreport,SirDavidClementiacceptedthatcompetitioncannotbeallowedtooverrideotherrelevantfactorswhenhewrotethattheregulatorshould“encouragecompetitionintheprovisionoflegalservicesandthepromotion of choice in both the number and type of providers, subject to theproper safeguardofconsumers’interests”(2004:17,emphasissupplied).

Perhaps the best way of assessing this regulatory objective is to consider balancing two publicinterestgoals(regulationandcompetition)throughthe lensofcompetition law. Regulationwouldthereforebejustifiedtoprotectconsumersfromunavoidablebutsub-optimalmarketfeatures(say,informationasymmetrybetweenproviderandclient).Butwhereregulationisjustified,itshouldbe


applied in the proportional manner advocated by the European Court of Justice17. Using thisapproach, a regulatory tool must achieve its stated aims in the manner least restrictive ofcompetition.Creatingathresholdlevelformarketentrythroughregulationcouldbearguedtomeetthis test if,oncebeyondthe threshold,providers face thenormal forcesofcompetition(subject,ofcourse, to the other requirements of competition law that apply to the behaviour of marketincumbents,suchasreviewsofmonopolies,cartelsandotheranti-competitivepractices).

It seems tome that thebestway to consider competition in legal services is to recognise that thepublicinterestinlegalservicescouldneverallowfullmarketandcompetitiveforces,subjectonlytothenormallawsrelatingtocompetition.Itshouldthereforebetheroleoflegalservicesregulationtobe minimally invasive to protect the public interest but that otherwise competition should beallowed.Theregulationoflegalservicesshouldnotthereforebedesignedorintendedtopreventorrestrictcompetition(unlessinparticularinstancesthatisshowntobeinthepublicinterest).Inthissense,theroleofregulationorregulatorsistooperatesoasnottopreventorrestrictcompetition–inotherwords, itor theyshouldenablecompetitionrather thanpromote it. Evenwhereenabled,however, competition must always remain subordinate to the wider, primary, public interestobjectives.

3.5 Therelationshipbetweenoverriding,primaryandsubordinateobjectives

Anapproachtoahierarchyofregulatoryobjectivesforlegalservicesasoutlinedaboveenvisagesanoverridingregulatoryobjective(protectingandpromotingthepublicinterest),supportedbyprimaryobjectives (such as maintaining the constitutional principle of the rule of law, protecting andsupporting the proper and effective administration of justice, protecting and supporting access tojustice,andencouragingindependent,strongandeffectivelegaladviceandrepresentation).Inturn,the overriding and primary objectives would be supported by subordinate objectives (such aspromotingandmaintainingadherencetotheprofessionalprinciples,andenablingcompetitionintheprovisionoflegalservices).

ThiswouldexplicitlyadvocateahierarchyofobjectivesinawaythattheLegalServicesActdoesnot.Theprimaryobjectiveswouldbe applied and interpreted in the context of thebroaderoverridingobjective to protect and promote the public interest. Those primary objectives would takeprecedence over subordinate objectives, which would have to be given effect to support theoverridingandprimaryobjectivesratherthanbeingobjectivesinisolation.

In this way, some apparent conflicts between current regulatory objectives could be resolved byprinciple.Forinstance,wherethereisaconflictbetweenpromotingthepublicinterestandactinginthebest interestsofclients, theformerastheoverridingobjectivewouldtakeprecedenceoverthelatterasasubordinateobjective.Similarly,enablingcompetitionintheprovisionoflegalservices(asasubordinateobjective)shouldnotbeallowedtocompromisetheprimarypublicinterestobjectives.

SuchanapproachwouldallowthebalancingactreferredtointheExplanatoryNotes(cf.footnote6)to be carriedout on a principledbasis. It is an approach thatwould support the idea thatwhereregulation is justified to achieve the primary regulatory objectives, this outweighs arguments infavour,say,ofanabsenceofregulationintendedtoachieveasubordinateobjectiveofcompetition.

17CaseC-309/99WoutersetalvAlgemeneRaadvandeNederlandseOrdevanAdvocaten[2002]ECRI-1577.


3.6 Someoriginalregulatoryobjectivesnolongerrequired?

Theapproachtooverriding,primaryandsubordinateobjectivesalsoleadstoaquestionofwhethertheremightthenbecertainregulatoryobjectivescontainedinsection1(1)oftheLegalServicesAct2007thatwouldnolongerberequired.

3.6.1 Protectingandpromotingtheinterestsofconsumers

Thedefinitionof ‘consumer’ insection207(1)of theLegalServicesAct2007 isdrawnwidely,andwill includebothcommercialandnon-commercialusersof legalservices. TheLSBhas interpretedthisasmeaning“anyonewhomighthaverecourseto legalservicesbecauseofa legal issue”(LegalServicesBoard2010:8),lendingaverywidescopetothisregulatoryobjective.

TheClementiReviewdescribedconsumerinterestsasfollows(2004:16):

Theconsumer’sprincipal interests includehigherqualityand lowerprices. Inpart this includes thegivingofchoicetoaninformedconsumer.Inthiswaytheultimatechoiceofwhethertoacceptariskismadebytheconsumer.

ThelinebetweenqualityandpriceisonethattheLSBiscurrentlyrequiredtowalk.Oneofthemainargumentsused to justify the reservationof certain legal activities is that it ensures thequalityofserviceprovided toconsumers;on theotherhand, theanti-competitiveeffectsof suchmonopoliesarelikelytodriveupprices.

FromthepointofviewexpressedintheabovequotationfromtheClementiReview,oneofthemosteffectivewaystofurthertheconsumerinterestistosecurebetterinformationforconsumersaboutthe choices open to them: indeed, Sir David Clementi referred to the asymmetry of informationbetween provider and consumer, and said that because of this the regulator “has a duty both toprotectandfurthertheinterestsoftheconsumer”(2004:16).Thisalsoraisesissuesofwherethatburdenshouldfall–notonlyinrelationtoenlighteningaparticularenquirerorclientbutalsointothe much broader arena of public legal education (discussed in more detail in paragraph 3.6.2below). Indeed, given that the current regulatory powers only bite on authorised persons, anyregulatorycompulsionto improveconsumerunderstandingwillhavetobedrivenfromamongtheregulatedcommunity(eitherbyreservedactivityorregulatedperson).

Inaddition tobetter information for consumers, therefore, theClementiReviewascribeda seconddutytothelegalservicesregulator:thatwhenconsumersarenotsufficiently informed,aregulatorshould(2004:16)“havepowerstoactinthemarket,forexample,toprohibitoppressivemarketingpractices,raiseorsetstandards,developinformation/awarenessprogrammes,resolvedisputesandprotectvulnerablegroups”.

Giventhat themostpotentregulatorypowersandconsumerbenefitsareachievedthroughorasaconsequence of reserved legal activities, there is an argument that reservation would play asignificantpart inprotectingandpromoting the consumer interest. However, reservation isnot aguaranteeofquality(thecomplaintsprofileoftheregulatedcommunitywillattesttothis),andwillcomeatsomeadditionalcost.Historically(asSirDavidClementi’sreviewshowed),ithasalsoledtostructuresandculturesthathaveinhibitedordiscouragedinnovationandthecompetitivequestforgreatervalueformoneyforclients.Reservationanditseffectontheconsumerinterestisthereforeabalancingact: isgreaterassuranceofqualityworththeextracosts? Totheextentthatreservationand the associated costswill bring additional protections, there is not a simple trade-off betweenqualityandcost. Further,wherereservation is justified, itdoesnot followthatonly lawyers(even


without the historically restrictive professional rules and attitudes) should be the only onesauthorisedtoofferthereservedactivity.

I thereforewonderiftheregulatoryobjectivetoprotectandpromotetheinterestsofconsumersisanunnecessary confusion. It is closely related to the challenging ‘public legal education’objectiveconsideredinthefollowingparagraph.Thedefinitionof‘consumers’withinthecurrentActisinfactmuch closer to the narrower idea of a ‘client’ or ‘customer’ than to the broader interests of allpotentialusersoflegalservicescharacterisinga‘market’. Totheextentthatthereareobjectivestoencourage independent, strong and effective legal advice and representation (cf. paragraph 3.3.4above) offered by providers who are bound by a professional principle to act in the client’s(enlightened)bestinterests(cf.paragraph3.4.1),itseemstomethatthenarrowconsumerinterestisalready protected and promoted. In addition, effective advice and representation should alsoencompassbeingabletorelatetoandcommunicatewithactualorpotentialclients,sothattheyareabletounderstandandactontheirneedsforadviceandrepresentationandonanyadvicegiven:inthis way, the consumer’s specific and immediate need for information, and ability to make aninformedchoiceordecisionwillbesatisfied.

Thebroaderconsumerinterestinhigherqualityandlowerpricesisachievedthroughacombinationof effective legal advice and representation (cf. paragraph 3.3.4) and competition (cf. paragraph3.4.2)–where,onmyargument,thelatterissubordinatetotheformer.AsforSirDavidClementi’ssuggestion that regulators need “powers to act in themarket, for example, to prohibit oppressivemarketing practices, raise or set standards, develop information/awareness programmes, resolvedisputes and protect vulnerable groups”, it seems to me that this is definitely a public interestrequirement already expressed in the need for independent, strong and effective legal advice andrepresentation–andfromtheneedforpublicconfidenceinourlegalsystem(seefurtherparagraph4.3.4below).

It therefore seems to me that the need for a separate regulatory objective of protecting andpromoting the interests of consumers is questionable, on the basis that its functions are alreadycoveredbyotherobjectives. However, if sucha conclusionwerenotacceptable, Iwouldmaintainthat any ‘consumer interest’ objective should be phrased as a subordinate objective so that it isunarguablethatthepublicinterestalwaystakesprecedenceoverconsumerinterests.

3.6.2 Increasingpublicunderstandingofthecitizen’slegalrightsandduties

Lack of information for consumers, and uneven distribution of information (or asymmetry) forconsumersor,moreparticularly,asbetweenproviderandclient18,offerparticularchallengestothelegal servicesmarket and approaches to regulation. If citizens are aware of their legal rights andduties,andofhowtofind,instructanduseprovidersoflegaladviceandservices,thereislikelytobegreaterconsumerconfidenceinaccessinglegalservices,andfewerconflictsandcomplaintsarisingbetweenclientsandproviders; this shouldalsoencouragesuppliers toprovidehigherquality, andimprovedaccessandvalue.

However,thereisamountaintoclimb.Researchhasshownthatone-thirdoftheBritishpopulationhas experienced a civil justice problem, but many of those people take no action towards aresolution.Ithasalsobeenestimatedthatapproximatelyonemillionsuchissuesgounresolvedeach18Assuggestedinparagraph3.6.1above,thisspecificandimmediateneedforincreasedclientunderstandingoflegalrights

anddutiesisperhapsbetteraddressedaspartoftheobjectiveforeffectivelegaladviceandrepresentation(cf.para3.3.4above),anddoesnotfallwithinthemoregenericpublicneedforunderstandingaddressedinthisparagraph.


year, resulting inwidespread legal exclusion amongst those affected. Such exclusion results fromuninformedmembersofthepublicnotknowingwheretoturnforhelp,orthinkingthatnothingcanbedoneabouttheirsituation(PLEAS2007:7).

Thewishtoenshrineincreasedunderstandingasanobjectiveisthereforelaudableandreasonable.Themore important issue, though, iswhether it is achievable. The fulfilmentof sucha regulatoryobjectivelargelyhangsoneffectivepubliclegaleducation(PLE),whichhasbeendefinedasfollows(PLEAS2007:9):

PLEprovidespeoplewithawareness,knowledgeandunderstandingofrightsandlegalissues,togetherwith the confidence and skills they need to deal with disputes and gain access to justice. Equallyimportant,ithelpspeoplerecognisewhentheymayneedsupport,whatsortofadviceisavailable,andhowtogoaboutgettingit.PLEhasafurtherkeyroleinhelpingcitizenstobetterunderstandeverydaylifeissues,makingbetterdecisionsandanticipatingandavoidingproblems.

PLE focuses on the early stages of a legal issue. Ideally, the public will be helped to avoid legalproblems, but if issues do arise PLE will also aid more timely and effective responses19. It isimportant tonotethatPLEdoesnotaimtoteachpeopleeverythingtheymighteverneedtoknowregarding the law. The Public Legal Education Network explains that in addition to a basicknowledgeaboutrightsandresponsibilities ineverydaysituations,avitalpartofPLE is informingpeopleaboutwheretogotofindmoreinformationandtoseekfurtherhelp(PLENet2009:4).

Itseemstomethattacklingtheregulatoryobjectiveinitscurrentformhastobeamulti-facetedandmulti-agency approach,which could start in secondary education, and extend topublic campaignsmountedand fundedbyrepresentativebodiesandconsumerorganisations,aswellas to localandpersonal‘education’carriedoutbyprovidersintheireverydayinteractionswithactualandpotentialclients. Muchofthisliesoutsidetheimmediatescopeandcontroloflegalservicesregulation. It istrue that the LSB, through its oversight role and dealingswith approved regulators and licensingauthorities, could encourage or impose requirements to carry out activities which contribute togreaterpublicunderstanding.However,itisdebateablewhethersuchabroadeducativefunctionisatrulylegitimateroleforaregulator.

Inanyevent,itisworthobserving(andaccepting)thatthevastmajorityofconsumerswillneverbefully informedabout the legal servicesmarket. Informationasymmetriesbetween consumers andsuppliersareandwillremaincharacteristicoflegalservices:toinformconsumersfullywouldbesocostlyas tobe impractical. Further,providingmoreandbetter informationwilladdto the ‘searchcosts’ofconsumerswhowilloftenbetime-poor,irregularandinexperiencedbuyersoflegalserviceswhocouldbeoverwhelmedbythevolumeofinformationavailabletothem:suchhighsearchcostscouldparadoxicallybecomeabarriertoreducingtheinformationasymmetrybetweensupplierandconsumer.

Inthecontextofthisreviewofregulation,thequestioniswhether,aspartoftheregulationoflegalservices,thereshouldbeanymandatoryrequirementonapprovedregulatorsorauthorisedpersonstoundertakeanyactivitieswhichfulfiltheobjective.Ibelievethatthisneedsfurtherconsideration.The general professional principle to act in the client’s best interests (cf. paragraph 3.4.1 above)couldbeextendedtoincludeageneralobligationonproviderstoenlighteneachclientaboutbroaderlegalrightsanddutiesbeyondthoserelevanttothecurrentmatteronwhichtheyareinstructedortoeducatethegeneralconsumermarketorpopulationatlarge.Thiswouldbeasignificantadditionalburdenonpractitioners.Further,althoughtheremightbesomecompetitiveadvantagetobederived

19Seehttp://www.lawforlife.org.uk/public-legal-education/pleas-task-force/.


byproviderswhoundertakeabroader‘educational’roleinthepursuitofnewbusinessoraspartoftheircontributiontothelocalcommunity,torequireproviderstodosowouldbetoaddcoststothesupplyoflegaladviceandrepresentationthatcouldcreatenew(andpossiblyunjustifiable)barrierstoentry.Perhapsprovidersshouldbeallowedtomakethisjudgementforthemselvesinthecontextoftheirownmarketplaceandoftheirownbusinessandcompetitiveinterests.

Ithereforeconcludethatthecurrentobligationinsection1(1)(g)toincreasepublicunderstandingofthe citizen’s rights and duties should be reviewed as unduly broad and onerous. It is at heart aneducative objective requiring the contribution and support of a number of stakeholders not all ofwhomare,orareaccountableto,theregulators.Alternatively,theregulators’obligationtoact‘sofarasisreasonablypracticable’inrelationtothis(sections3(2),28(2),82(1)and116(2))couldleadtothe view that so little is in fact reasonably practicable that the achievement of the regulatoryobjective in practice becomes farmore limited in its scope and realisation than the expression ofintentionwithinit.

3.6.3 Encouragingadiverselegalprofession

I have already suggested in paragraph 3.3.4 above that the restriction in the current regulatoryobjective in section 1(1)(f) to the ‘legal profession’ is unnecessarily limited in the context oflegislationintendedtoopenupthelegalservicesmarketplacetoawiderrangeofprovidersnotallofwhomwouldbeconsideredtobemembersofthelegalprofession.Itwouldbeunfortunate–toputitmildly–iftheinferencetobedrawnfromthedraftingofsection1(1)(f)weretobethatthesenewentrantswerenotexpectedtobeindependent,strong,diverseandeffective.

AccordingtotheLSB,adiverselegalprofessionis“onethatreflectsandisrepresentativeofthefullspectrum of the population it serves so as to harness the broadest possible range of talent in themeetingof the regulatoryobjectives” (Legal ServicesBoard2010:12). To this,wemightadd thatindependent, strong and effective legal advice and representation also requires diversity in thestructures and business models of providers (enabled by ABS, ‘non-lawyer’ ownership and newopportunitiestoaccesscapital).

Socialdiversity(initsbroadestsenseofgender,background,education,religion,disability,ageandsexuality) remains apertinent issue even four years after theMilburn report on fair access to theprofessions which concluded that (2009: 24) “law remains one of the most socially exclusiveprofessions”.Qualitativeentryrestrictionsintheformofminimumeducationalrequirementscouldexcludemarketentrants from lessprivilegedbackgrounds(PanelonFairAccess to theProfessions2009: 22). There is no doubt that regulation can affect the extent of diversity within the legalservicesmarket.

Whereregulation is intended toachievepublic interestobjectives (say, supporting theruleof law,and the independenceand strengthof the legalprofession), but contributes to a less-than-optimaloutcomeinanother(diversity),thereisalsonodoubtthatthereisatension.However,toencourage(or, as seems to happen with the LSB and some other approved regulators, promote) diversityequallywith (or in preference to) other regulatory objectives tomymind is to engage in positivediscrimination. By its verynature, this is still discriminationand runs the riskof excludingother,equallyworthy,entrants.

Thiscountryhasextensiveandeffectivelawsagainstallformsofdiscrimination. Thoselawsapplywithequalintentandforcetothosewhooperatewithinlegalservices.Diversityresultsfromalackof discrimination. I believe further thought should be given, therefore, to whether improved


diversitywithinthelegalservicesmarketisbestachievedbypositivediscriminationtoimproveitorthe absence of discrimination through the effective enforcement of anti-discrimination laws.Accordingly, I raise the question whether there needs to be a specific objective in legal servicesregulation to encourage diversity when laws already exist to address discrimination (leadingpotentially to a duplication of regulatory intervention) – especially if doing so in reality meansdiscriminating against others who might be equally well positioned but lack some aspect of a‘minority’characteristic.

If removing diversity as a regulatory objective is considered a step too far, then it could still beretainedas a subordinateobjective20not tobepursuedat the expenseof independent, strongandeffective(non-discriminatory)provisionoflegalservicesasaprimaryobjective.

3.7 Anewstatementofregulatoryobjectives

Inconclusion,arestatementoftheregulatoryobjectivesforlegalservicesmightbedevelopedalongthefollowinglines:

(1) InthisActareferenceto“theregulatoryobjectives”isareferencetotheobjectiveswithinsubsections(2),(3)and(4).

(2) Theoverridingregulatoryobjectiveistoprotectandpromotethepublicinterest.

(3) In achieving the overriding regulatory objective in subsection (2), the followingregulatoryobjectivesmustbetakenintoaccount:

(a) supportingtheconstitutionalprincipleoftheruleoflaw;

(b) protectingandsupportingtheproperandeffectiveadministrationofjustice;

(c) protectingandsupportingaccesstojustice;and

(d) encouragingindependent,strongandeffectivelegaladviceandrepresentation.

(4) In achieving the regulatory objectives in subsection (3), and subject to the overridingregulatoryobjectiveinsubsection(2),thefollowingfurtherregulatoryobjectivesmustbetakenintoaccount:

(a) promotingandmaintainingadherencetotheprofessionalprinciples;and

(b) enablingcompetitionintheprovisionoflegalservices.

(5) The“professionalprinciples”are:

(a) thatauthorisedpersonsshouldactinthepublicinterest,

(b) thatpersonswhoexercisebeforeanycourtarightofaudience,orconductlitigationinrelationtoproceedingsinanycourt,byvirtueofbeingauthorisedpersonsshouldcomply with their duty to the court to act with independence in the interests ofjustice,

(c) thatauthorisedpersonsshouldactwithindependenceandintegrity,20Withoutwishingtoreadtoomuchintothepoint,IwouldalsonotethatdiversitywasnotpartofSirDavidClementi’s

originalconceptionoftheregulatoryobjective:cf.footnote14above.


(d) thatauthorisedpersonsshould,aftertakingintoaccountparagraphs(a),(b)and(c),actinthebestinterestsoftheirclients,

(e) thattheaffairsofclientsshouldbekeptconfidential,and

(f) thatauthorisedpersonsshouldmaintainproperstandardsofwork.


Section4.Principlesunderpinningfurtherreform

4.1 Timingandextentoffurtherreform

GiventhatitislessthantenyearssinceSirDavidClementi’sreviewoftheregulatoryframeworkforlegalservices,andthattheLegalServicesAct isstillnotfully implemented, itseemstomethattheintention and principles that drive any further reform should be clearly stated and understood.Although the current, partially reformed, framework is not without its flaws and challenges (seeSection2above),‘tinkering’withitatthisstagewouldnotbedesirable.

4.2 Regulatoryobjectivesandprinciplesforreform

The difference between regulatory objectives and underpinning principles for regulatory reformmight sometimesbedifficult todistinguish. Forme, the regulatoryobjectivesdeterminewhat theregulatoryframeworkandthoseresponsibleforitsimplementationmustachieve;theunderpinningprincipleswould describewhy the reform is being undertaken and thereforewhatwill determinewhetherornotishasbeensuccessful.

On this basis, I would suggest that five principles should underpin the current consideration ofwhethertheregulatoryframeworkforlegalservicesneedsfurtherreform.

4.3 Principlesforfurtherreform

It isnotnecessarily thecase that the intentionsbehind theLegalServicesAct2007havenotbeenachieved or were misguided. The following principles therefore build on and develop thoseintentions.

4.3.1 Achievingtheregulatoryobjectives

Theforemostdutyandindicatorofsuccessmustbethattheregulatoryobjectivesofanyframeworkforregulation(cf.Section3above,andparticularlyparagraph3.7)areachieved.IhavesuggestedinSection 3 above that a hierarchy of regulatory objectiveswould help in this, by giving primacy toprotectingandpromotingthepublicinterest,andinhelpingtoresolveconflictsbetweenobjectivesotherwiseclaimingequalweight.

The context inwhich the objectives are achieved remains important. From a regulatory point ofview,regulationshouldcomplywiththerequirementsoftheLegislativeandRegulatoryReformAct2006 that it should be transparent, accountable, proportionate, consistent and targeted. It is alsoimportant that regulationshouldnot impedeeconomicgrowth. There is,however, somethingofatensiononthis.

I have always believed that it is right for law firms to be more business-like and to adopt thestructures,processesand financing found inotherbusinessactivities. I cannot, therefore, supportanyblindresistancetotheadoptionofmodernbusinesspracticesoftenexpressedbylawyersonthebasisofanargumentthatonlylawyerscanbetrustedtodeliverhigh-qualityandethicaladviceand


servicesandthat,todoso,theymustnotbeforcedtochange21.Thatsaid,Ialsobelievethatlawandtheprovisionoflegaladviceandrepresentationarenotjustanothersetofbusinessservices.

AsIhavetriedtoelaborateinSection2above,law,justice,andlegalservicesareanintegralpartofthe fabric of a democratic society (aswell as of its preservation and economic success) and that,accordingly, the public interest requires thatwe accord the rule of law and the administration ofjustice,supportedbyindependentandeffectivelegaladviceandrepresentation,aspecialstatus.Thetension lies in finding and maintaining the appropriate balance between being special and beingappropriatelycommercialandbusiness-like.

Itisthereforelikelythatinachievingregulatoryobjectivesinlegalservices(giventhepublicinterestdimensions and the need to balance this interest against ‘normal’ business freedoms to driveentrepreneurial, innovative growth), legal services will attract a higher-than-normal regulatoryburden. However, consistent with Government policy of reducing regulatory burdens22, whereregulatoryinterventionisjustified,Iseenoreasoninprinciplewhyitshouldnotbeattheminimumlevelrequiredtobeeffectiveinmeetingitsobjectives.If,inthepursuitofaperceivedorrealbenefit,a firm or representative body thenwishes to set the threshold for practice at a higher level, thatcouldbe left asa commercialorprofessionalmatter for that firmorbody, tobeachieved throughself-regulationorvoluntarycodesratherthanforregulators.

4.3.2 Separatingregulatoryandrepresentativefunctions

Wherethepublicinterest–andacorrespondingregulatoryobjective–requiresanindependentlegalprofession(or,asIwouldprefer,independentlegaladviceandrepresentation)23,independencefromgovernmentandotherrepresentativeinterestsisessentialifpublicconfidenceintheadministrationofjusticeandinlegalservicesistobeachieved.Itseemstomethatthiscanbedoneifregulatorsarefree from political influence, and from the influence of lawyers, legal services providers andconsumers(andofthosewhorepresentthoseinterests),andtheydonot‘selfregulate’inthesensethatallofthosewhoserveontheregulatorybodiesaremembersoftheregulatedcommunity.

UnderthecurrentregulatoryframeworkoftheLegalServicesAct,muchheadwayhasbeenmadeinestablishing the Legal Services Board as independent from government, in introducing laymembership of the approved regulators, and in separating the representative and regulatoryfunctionsoftheapprovedregulators.However,thereisonesenseinwhichthisprogresshasperhapsbeentoogreatandoneinwhichithasnotbeenprofoundenough.

The introduction of lay membership in the exercise of regulatory functions is to be welcomed.However,itcouldbearguedthatitisanunnecessaryrestrictionthatthechairofaregulatorybodyshouldbea layperson,andthatamajorityofmembersshouldbe laypersons. Althoughthere isanimportantdimensionoftheperceptionofindependence,thoseperceptionsarearguablydrivenmoreby thebehaviouranddecisionsof theregulators thanby themere factof their composition. Suchdecisionsshouldalsobeinformedandunderstandtheregulatorycontext.

It is possible to avoid regulatory capture and the appearance of self-interest without potentiallycompromising the quality of regulatory decisions. Indeed, by having too many members of the

21See,forexample,Mayson(2012)‘Externalownershipandtheforkedtongueofethics’at

http://stephenmayson.com/2012/04/13/external-ownership-and-the-forked-tongue-of-ethics/.22Seefurtherwww.gov.uk/government/policies/reducing-the-impact-of-regulation-on-business.23Seepara3.3.4above.


regulatorybodywhodonotunderstanddeeply enougheitherorbothof the circumstancesor thelikelybehaviourofthecommunitytheyareresponsibleforregulating,theremightbegreaterrisksofinappropriateregulationorinadequateregulatorysupervision.Thecurrentreviewmightthereforeusefully revisit the issue of lay chair and lay majorities, and consider whether, say, a 51-75%majorityofmembersshouldbeappropriatelyqualified,andthatthechairshouldnotnecessarilybealayperson.

On the otherhand, the current separationbetween the representative and regulatory functions ofsomeoftheapprovedregulators(particularlytheLawSociety/SolicitorsRegulationAuthority24andtheBarCouncil/BarStandardsBoard25)hasintheeyesofsometakenfartoolongandhasnotgonefarenough. Thishasmanifested itself inpublicpronouncements inwhichtherepresentativebodyhasovertlysoughttoinfluencetheregulator26,andinthefundingandresourcingarrangements27ofthe regulatory function (which results in certain facilities being shared – and therefore subject tonegotiation28,changeandthepossibilityofobsolescenceandcontestableaccess).

In part, the ability to separate will be driven by more pragmatic considerations of the cost ofindependence. If a smaller approved regulator must pay for its own premises and supportingresources (without the benefit of some of the economies of scale or of sharing that arise undercurrentarrangements),thenthecostofregulationislikelytobehigherfortheregulatedcommunity.Thisbalancingofindependenceandcost-efficiencyispotentiallygoingtodrivetowardseconomyinpreferencetofullindependence,andmustbewatched.

4.3.3 Matchingpublicexpectationandthescopeofregulation

This isoneof themostproblematic issuesarising fromthecurrentstructureofamixof regulatedactivities,regulatedindividualsandentities,andregulatedtitles. Thenotionofthe‘regulatorygap’that the current structure creates (cf. paragraph 2.2 above) leads to the strong likelihood of amismatchinpublicexpectation.

Ifthepublicviewisthatalllegalservices(andtheprovidersofthem)areorshouldberegulatedinordertobeabletoofferlegaladviceandrepresentationinreturnforpayment(andthatclientsarethereforeprotectedifsomethinggoeswrong)29,thenthecurrentregulatorygapleadstoasituationwherethatviewisnotcorrect.Thisleadstotwoimportantconsequences.

First,publicandconsumerconfidence(seefurther,paragraph4.3.4below)inlegalservicescouldbeundermined by any lack of quality or service in, and the absence of any protection in respect of,24TheLegalServicesBoardhasexpressedformalconcernsaboutthis:seehttp://www.legalfutures.co.uk/latest-news/sra-

independence-still-concern-lsb-keeps-law-society-report-eases-demands.25See,forexample,http://www.legalfutures.co.uk/regulation/solicitors/bar-council-fails-governance-test-again-while-

law-society-goes-to-the-wire.26Cf.http://www.legalfutures.co.uk/regulation/solicitors/plant-lays-bare-sralaw-society-tensions-caused-by-defective-

legal-services-actandhttp://www.legalfutures.co.uk/latest-news/bar-council-faces-probe-undermining-independent-regulation-barristers.

27See,forexample,http://www.legalfutures.co.uk/regulation/solicitors/law-society-and-sra-unveil-deal-to-resolve-longstanding-governance-problemsandhttp://www.legalfutures.co.uk/latest-news/revealed-law-society-sra-odds-regulators-budget.

28Cf.http://www.legalfutures.co.uk/latest-news/exclusive-sra-seeks-law-society-approval-for-22m-investment-in-new-it-system.

29Cf.http://www.legalfutures.co.uk/latest-news/bringing-legal-advice-regulatory-net-may-resolve-consumer-confusion-says-lsb-chiefandhttp://www.legalfutures.co.uk/latest-news/government-under-fire-will-writing-decision-few-express-faith-voluntary-regulation.


unregulated legal services. Second, consumers of legal services might be less inclined to makeproperenquiryoftheexpertiseandexperienceofprovidersbeforeinstructingthem.Indeed,recentresearch from the Legal Services Consumer Panel suggests that,while consumers do benefit from‘shoppingaround’,barelyafifthactuallydoso30.

The current evidence suggests that the current regulatory framework does not adequatelymatchexpectations and the scope of regulation, and more needs to be done to fulfil this principle forreform.

4.3.4 Generatingconfidenceinjusticeandlegalservices

The public interest in an effective justice system and meaningful access to justice requires thatpeoplemusthaveconfidencenotonlyintheadministrationofjustice,andincourtsandjudges,butalso in their ability to accesseffective legal adviceand representationat theappropriate timeandcost. Unfortunately, it appears – according to research from the Legal ServicesConsumerPanel –thatconsumerconfidencehasbeenfalling31.

Inaddition,itwouldalsoseemthatthereisasimilarpictureforsmallandmedium-sizedbusinesses(SMEs). Inasurvey for theLegalServicesBoardofalmost10,000SMEs32,more thanhalfof them(52%) chose todealwith legal issueson their ownwithout seeking advice, even thougha slightlyhigher number (54%) agreed that legal processes are essential for businesses in enforcing theirrights.Thismightbebecauseonly13%agreedthatlawyersprovideacost-effectivewayofresolvinglegalissues.

Thisbroadlackofbeliefrunsrisksofreducedconfidenceofthepublic,consumersandclientsinthelegal system and thosewho support it. It also appears to lead to the ‘elective exclusion’ ofmanycitizensandbusinesses from legal advice andprocesses, to thedetrimentof themprotecting theirinterests or pursuing just claims: this also undermines the public interest in the legitimateparticipationofcitizensinsocietyandinUKplc’seconomicsuccessandgrowth(cf.paragraph3.2).It isonlyinthiswaythattheapparentlypersistentunmetneedor latentdemandfor legalservicescanbemet,unresolveddisputesaddressed,andfullvaluetoboththelegaleconomy(andthentotheeconomyatlarge)berealised.

Ifthecost(oratleastcost-effectiveness)oflegalservicesisnotconsideredbyclientsandwould-beclients to warrant seeking legal advice and representation, then the cost structure of the marketneedstobeaddressed.Thisisalargerissuethancanbeexploredfullyhere,butthecriticalissueinthe context of this call for evidencewould seem to be the role that the extent, nature and cost ofregulationplaysintheultimatecostoflegalservicestotheconsumer.

30SeeTrackerSurvey2013,BriefingNote2:Shoppingforlegalservices;availableat

http://www.legalservicesconsumerpanel.org.uk/ourwork/CWI/documents/2013%20Tracker%20Briefing%202_shopping.pdf.

31SeeTrackerSurvey2013,BriefingNote4:Publicconfidenceinthemarket;availableathttp://www.legalservicesconsumerpanel.org.uk/ourwork/CWI/documents/2013%20Tracker%20Briefing%204_confidence.pdf.

32SeeFindingsoftheSmallBusinessLegalNeedsBenchmarkingSurvey2012;availableathttp://www.legalservicesboard.org.uk/news_publications/press_releases/2013/2013_05_22_small_business_legal_needs_research_final.pdfandhttp://www.legalfutures.co.uk/latest-news/smes-deeply-unhappy-legal-services-lawyers-warned-risk-going-way-hmv.


InSection5below,Ishallarguethatthepublicinterestandtheneedtomatchpublicexpectationstothe scopeof regulationdoesnot requireuniform regulationof all legal services. Part of the issuehereliesinthebalancebetween‘before-the-event’assuranceofcompetenceandqualityofprovidersand‘after-the-event’redresswhensomethinghasgonewrong.Theregulationandconsequencesofassurance are typically much more expensive than the structure and mechanisms for redress,suggestingthattargetedandproportionateregulationisrequiredinrelationtoassurance.Itcouldalsosuggestaneedtoexpandthescopeofjurisdictionforafter-the-eventredress(asadvocatedbytheOfficeforLegalComplaints33).

Finally, there is a need for the regulated providers of legal services to have confidence in theregulatory frameworkand regulators. If the regulatedcommunitybelieves that the regulatorsareintroducing and enforcing impractical or inappropriate regulation, focusing on the wrong issues,under-resourced, out of touch, or too expensive, then confidence and, ultimately, compliance,willsuffer – further undermining public and client confidence in the regulatory framework for legalservices,theruleoflaw,therealityofaccesstojustice,andtheadministrationofjustice.

4.3.5 Effectivenessoftheregulatoryframework

The effectiveness of the regulatory framework for legal services will ultimately be judged on anumber of dimensions. These will include the achievement of the principles expressed in thisSection. In turn, an effective framework will: promote the rule of law and access to justice;contribute to the effective administration of justice; secure the independence of regulation fromgovernmentandanysectionalinterests;upholdtheprofessionalprinciplesandethicalstandardsinclient relationships and the delivery of legal services; support timely and appropriate handling ofcomplaints and redress; and result in simple, appropriate, proportionate, cost-effective andresponsiveregulation.

33Seehttp://www.legalombudsman.org.uk/downloads/documents/press_releases/0613-Call-for-new-vision-meet-future-

challenges.pdf.


Section5.Thescopeandnatureoflegalservicesregulation

5.1 Theextentoffurtherreform

Given that thereformsof theLegalServicesAct2007arepresently incomplete, it couldbearguedthatitisprematuretobeconsideringfurtherreformoftheregulatoryframework.Idonotsharethisview.Ibelievethat,forallSirDavidClementi’shardworkandgoodintentions,theActneverthelessproceededonaflawedbasisandthepresentregulatoryframeworkwillnotprovetobefullycapableofdeliveringtheoriginalpolicyintentionsoritsownobjectives. Theseflawsarethecurrentsetofreserved legal activities, and the absence of any hierarchy or priority in the regulatory objectives(this laterpointhas alreadybeenaddressed in Section3 above). I regard these two issues as themostimportantareasforfurtherreform.

5.2 Currentreservedlegalactivitiesasafundamentalflaw

TheLegalServicesActbuildsmuchof itsregulatoryframeworkaround‘authorisedpersons’. Theyare defined in section 18 as either thosewho are authorised by a relevant approved regulator tocarry out a reserved legal activity or a licensed body (ABS) which is authorised by a relevantlicensingauthoritytodoso.Anauthorisedpersoncanthereforebeanindividualpractitioneroranentity. Thisapproach inevitablybrings themixof regulationbypersonandactivity referred to inparagraph2.3above.

The ultimate sanction for any serious breach of regulations applying to regulated individuals orentitiesistoremovetherighttopractise(strikingofforremovaloflicence). Thereisundoubtedlydeterrent force insuchpotential lossof theabilitytoremain inbusiness. However, thedistinctionbetween the current reserved and non-reserved legal activities dilutes this deterrent power. Anindividual or entity that is no longer allowed (and therefore no longer regulated) to deliver areserved activity can still, of course, set up a new business delivering only non-reserved legalactivitiesoutsidetheframeworkofregulation.

Unfortunately, the current reserved legal activities do not cover themost important life-events ofconsumers,andthereforedonotofferthemthefullprotectionofregulationinrelationtoimportantadviceandservices(suchaswillwriting)legallydeliveredbynon-authorisedpersons.Importantly,theeffectsofthisregulatorygapcouldbeacuteintermsofpotentiallyexposingconsumerstoadvicefromthosewhowerenotconsideredfittopractiseinotherareasofregulatedlegalactivity.

Ihavecometotheconclusionthatusingthecurrentreservedlegalactivitiesasthefulcrumaroundwhich the regulatory framework turns creates a fundamental flaw in the existing approachwhichshouldbeaddressedinanyreview.

5.3 Otherapproachestoregulation

Reservation is but one form of regulation by activity. For example, there are some presentlyregulatedbutnotreservedactivities,suchas immigrationadviceandservices,claimsmanagementservices, and insolvency practice. In addition, there are circumstances where otherwise non-regulated activities become subject to regulation because individuals or entities comply with the


requirements of a regulatory organisation or accreditation process. This would include theregulationofnon-reservedactivitiesbyanapprovedregulatororalicensingauthority,aswellasbyvoluntaryself-regulatingbodies.

There are also other sources of regulation that apply to the activities of legal services providers.Theseareoftenpartofthegenerallawwhichapplytoanumberofbusinesses(suchascompetitionlaw,‘cooling-off’periodsinrespectofpressure(door-step)selling,misleadingadvertising,andunfaircontractterms).

5.4 Usingalternativestoregulation

Current government policy rightly encourages the consideration of alternative ways of bringingaboutchange,withregulationasa lastresort34. Inthisway, theregulatoryburdenoncitizensandbusinessescanbereduced,andeconomicgrowthencouraged.However,arecentGovernmentreportcontainsevidencefromtheOECDthattherelativeregulatoryburdenonthelegalprofessionsintheUK is already significantly lower than in the US, Germany, France and Japan35, so there may belimited scope for any further reduction. Indeed,manyof the alternative approaches have alreadybeenusedinlegalservices.

5.4.1 Self-regulation

Thetraditionalprofessionalmodelofself-regulationwas thepredominantapproachexaminedandreplacedbytheClementiReviewandtheLegalServicesAct2007.Itwastheapproachinwhichthepublic and consumers had largely lost confidence by 2004 by being insufficiently independent ofthose who were regulated, insufficiently responsive to the handling of client complaints andconsumer concerns, and unduly restrictive in the structures and innovation that self-regulationeitherpreventedordiscouraged.Itisdifficulttoseethatanyreturntosuchanapproachwouldbewelcomeoracceptablesosoonafterreplacingit.

Thatsaid,becauseof theregulatorygapreferred toseveral times in this response, theuseof suchinherently ‘voluntary’ regulationremainsaviableoption for thosewhooperate in theunregulatedsectorsoflegalservicesbutwishtopromoteethicalpracticeandredressfordissatisfiedconsumers.This is the approach adopted, for example, by the voluntary codes of conduct of the Institute ofProfessionalWillwritersandtheSocietyofWillWriters.

The significant drawback of such voluntary self-regulation is that the consumerswho aremost inneedofprotectionwillmost likelybe thosewhochoose touseproviderswhose serviceand trackrecord is such that they elect not to submit themselves to self-regulation. This leaves thoseconsumerswithnoredressorremedy,andnoaccesstothesanctionsthatmightotherwisefollowortoOmbudsmenservices.

34Seehttps://www.gov.uk/government/policies/reducing-the-impact-of-regulation-on-business/supporting-pages/using-

alternatives-to-regulation.35SeeDBIS(2013)GrowthisOurBusiness:AStrategyforProfessionalandBusinessServices,availableat

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211842/bis-13-922-growth-is-our-business-professional-and-business-services-strategy.pdf.


5.4.2 Informationandeducation

Inlightoftheconclusionattheendoftheprecedingparagraph,consumereducationandinformeddecision-making by them can help reduce the risks associated with the choice of unregulatedproviders. There is a necessary connection here with general public legal education36and thedevelopmentoflegalcapabilityincitizens,aswellastheinformedabilitytorecogniseanddealwithaspecificlegalneed.

The use and protection of professional titles, and the use by professional bodies of qualityaccreditations (such as The Law Society’s Conveyancing Quality Scheme and the Wills andInheritance Quality Scheme), are capable of providing both before-the-event signals to potentialclients that a provider is appropriately qualified for their needs and that after-the-event redresscouldbeavailable. Beyondthis, independent–andperhapscommercial–systemsareemergingtoofferdirectoriesandcomparisonsoflegalservicesproviders37:however,theveracityandreliabilityof such assessments – and the reputational harm that could be caused to providers by them –remains relativelyuntested, adding to the challenge for thepreviouslyuninformed, inexperienced,andtime-poorenquirer.

5.4.3 Co-regulation

Co-regulation, involving amix of self-regulation and government involvement, presents particularchallengesinlegalservicesregulation.Thelegalsectoralreadyhaselementsofprofessionalcodesofconduct, and the adoption of other standards and accreditation. The principal challenge ofgovernment involvement (beyond establishing the statutory framework for regulation, and theappointmentofthechairmanoftheLegalServicesBoard)isthefundamentalneedfortheperceptionand reality of independence from government of regulation, regulators and the providers of legaladviceandrepresentation.

5.4.4 Economicinstrumentsorincentives

Therewouldappeartobeverylimitedscopefortheuseofeconomicinstrumentsinlegalservicestochangepeople’sbehaviour,ortoadjustthefinancialincentivesfacingbusinessesandcitizens.Thereare, perhaps, two significant points – though neither is attributable to legal services regulationdirectly.

First, the cost of legal services is tax deductible for businesses, and the VAT paid by them isrecoverable. Thispresentsarathersignificantdisparityinthetreatmentofbusinessesandprivatecitizens. It increases the relativenet cost of legal services forprivate citizens, andwill add to thedisincentivestoseeklegaladvicewhenitisperhapsmostneeded.Intermsofsupportingtheruleoflawandaccesstojustice,aswellasencouragingfurthereconomicgrowth(atleastinrelationtothelegal servicesmarket, or assisting thosewhomightwish to take legal advice in respectof startingtheirownbusiness),someelementoftaxbreakorVATexemptionforcertainlegalservicesorcertaintypes of client might encourage different behaviour that will strengthen personal or socialrelationshipsandfullerparticipationandeconomicgrowthinsociety.

36Cf.para3.6.2above.37See,forexample,LawComparison(http://www.lawcomparison.co.uk/law-information.php)andAccessSolicitor

(http://www.AccessSolicitor.com).


Second, theavailabilityof legalaidrepresentsaneconomic incentive forsometoseek legaladviceand representation in some of the ways and for some of the purposes suggested in the previousparagraph.Theinterplaybetweenregulationandlegalaidissomewhatcomplex,inthatmanyoftheissues forwhich legalaid is required(suchashousingandsocialwelfare, immigration,andcrime)involveshighly technical law in respectofwhich thecompetenceandexperienceofanadviserarecritical. The accreditation and regulation of a provider might therefore be necessary to giveassurancebothtotheclient(whowillbeaffectedbyactingontheadviceandrepresentation)andtothestate(whichisprovidingthefunding,andpayingforthecourtssystemthatunderpinstherightsandobligationsinquestion).

However,wherethecostofaccreditationorregulationis(too)high,theultimateeconomicburdenonprovidersofparticipatinginthelegalaidsystemmayprovetobetoogreatiftherewardsofferaninadequate return on the expertise, experience or resources required for effective advice andrepresentation.

5.4.5 Nonewintervention

Irecognisethatregulationanditsalternativeswillusuallygeneratecostsaswellasbenefits,andsothecost-benefitofregulationshouldbeconsideredcarefullybypolicymakersandregulatorsbeforefurtherregulationisintroduced.

Intermsoftheoptionsavailable,however,itseemstomethata‘donothingatall’conclusioninthecontextofthecurrentregulatoryframeworkforlegalserviceswouldnotbetherightoutcome.Thatwouldleavethefollowing:

(1) use existing regulation: for the reasons set out in this paper, I do not believe that theexisting regulatory framework for legal services is robust enough to deliver the publicinterestinappropriateandcost-effectiveregulation;

(2) simplifyorclarifyexistingregulation:thisoptionisexploredinparagraph5.5andSection6below;

(3) improve enforcement of existing regulation: there does not appear to me to be anyevidence that existing regulation is not being enforced, although it might be open toapprovedregulatorstotakeamoreaggressivelinewiththosewhotransgress;or

(4) makelegalremediesmoreaccessibleorcheaper:thisisinpartamatterofsimplifyingtheunderlyinglaw(amatterforgovernmentandlawreform),improvinglegalaidfunding(amatter for government), and encouraging more cost-effective legal advice andrepresentation through more appropriate accreditation and regulation, greatercompetition and innovation (an objective that is being stimulated by the currentframeworkandshouldbecontinuedinanyfurtherreform).

5.5 Redesigningthescopeandnatureoflegalservicesregulation

WhileIagreewiththepolicyobjectivethatconventionalregulationshouldbeusedasalastresort,Ibelievethatsuchregulationisrequiredinpartsofthelegalservicesmarket,andthatfurtherreformisneededtobringaboutamoreappropriateframeworkforachievingthepublicinterestobjectivesthatshouldunderpineffectiveregulationoflegalservices.


Ithereforeturntoexaminetheproperuseofregulationforlegalserviceswhere:

(1) theregulatorygoalscannotbeachievedbyself-regulationorothermethods;and

(2) analysisofthecostsandbenefitsshowsthatregulationispreferabletoself-regulationorothermethods.

If the current reserved legal activities represent a fundamental flaw in the scope and nature ofregulation (cf. paragraph 5.2 above), then addressing this must be a principal goal in any newapproachorredesign.

5.5.1 Theprinciplesforlegalservicesregulation

Ialludedearlier(inparagraph4.3.4above)tothedistinctioninregulatoryapproachbetweenbefore-the-event assurance and after-the-event redress, and the tendency of the former to be moreexpensive.Itisarguablethattoomuchofthecurrentregulatoryframeworkforlegalservicesputsitsemphasisontheformer.Thisfeedstheprofessionalconceptionthatlegalservicesaretoodifferentor too important tobeprovidedbyanyoneother than thosewhoaresuitablyqualified(usuallyaslawyers).Whilesomelegaladviceandrepresentationundoubtedlyfallsintosuchadescription,itisnotauniversaltruthacrossthespectrumoflegalneeds.Inanyevent,reservationoflegalactivitieshasnowproved itself tobe too limiteda concept aroundwhich tobuild themodern regulationoflegalservices.

For regulation to be a justifiable regulatory response, I would suggest that it is necessary to besatisfiedontwooutofthreefoundationissuesthat:

(1) regulationisinthepublicinterest;and

(2) eitheralternativestoregulationarelesseffective;

(3) or regulation affords a degree of additional protection to clients by virtue of theirpurchaseofaregulatedactivity.

5.5.1.1 Regulationinthepublicinterest

Ibelievethatsomeofthecurrentreservedlegalactivitiescanbejustifiedinthepublicinterest,andthat some cannot; I also believe that there are some additional legal activities that could beconsideredforregulation(thoughnotnecessarilybyreservation).

Myapproachtotheissueofregulatinglegalactivitiesisthatsuchregulationmustbeshowntobeinthepublicinterest(adoptingtheapproachtodefining‘thepublicinterest’outlinedinparagraph3.2above).Thisleadsmetoadvancethepropositionthatregulationcanbejustifiedtosecureeither,orboth,oftwopurposes:

(1) the public good, including advancing the overriding regulatory objective suggestedearlier(cf.Section3above);and

(2) protectingtheconsumer.

Inrelationtothefirstpurpose,Iwouldincorporatesupportingtheconstitutionalprincipleoftheruleoflaw,includingtheeffectiveadministrationofjustice;improvingaccesstojustice;andencouraging


independent, strong and effective legal advice and representation. In my view, the effectiveadministrationofjusticeisnecessarytomaintainingtheruleoflawandsecuringaccesstojustice.Itisthereforeapublicgoodinitsownright,andisseparatefromwhatmightberegardedasabroaderconsumer interest in cost-efficient administration. Efficiency (as represented by goodquality andvalue formoney) is certainly necessary for effectiveness, and can be achieved by providers otherthan lawyers; but effectiveness is not simply a consumer interest or consumer protection issue.Gennalsomakesthepoint(2010:16-24)thatciviljusticeisapublicgood.

However,beyondthis,societyalsoneedstoencouragereliabilityandstabilityinsocialrelationships(which are central to good social order and commerce). I would therefore go further than legaloutcomes,andsuggestthatthisfirstpurposeshouldalsoextendtopromotingandprotectingtheUKanditsjusticesystemasalegalforum,aswellastoadvancingthecommercialinterestsof‘UKplc’38.There is much evidence that, in a global marketplace, the UK is regarded as a ‘safe’ place to dobusiness, and English law is often the governing law of choice in multinational commercialtransactions.

Confidence in theEnglish legal system is therefore critical toour continuing social stability, globalcompetitiveness, economic successand tax revenues. Inpart, this confidencestems from theUK’sadherencetotheruleoflaw,aswellasfromitsreputationforanindependentandimpartialjudiciaryandthestandingoftheprofessionalqualificationsandindependenceofitslawyers.Inpart,itiswhyweneedfreemovementofandaccessto financialandhumancapital(itselfapublic interest issue:seeparagraph3.2above)ratherthanprofessionalregulationsandnormsthatpreventordiscouragesuchmovement.

Inrelationtothesecondpurpose,Iwouldnotadvanceconsumerprotectionasagenericjustificationforregulation.Rather,regulationisinthepublicinterestincircumstanceswhere,asaresultoflegaladvice or representation, detriment to the citizen’s (a) liberty, (b) physical, mental, emotional orsocialwell-being,or(c)property,couldarise,andforwhichcompensationaftertheeventwouldnotrepresentanadequateorreasonableremedy. Iregardthesemattersas fundamental tosomeone’sabilitytoparticipatefullyinsocietyasanequalcitizen(cf.paragraph3.2above).

The issue for both purposes, in essence, becomes one of the distinction between ‘assurance’ and‘insurance’.Althoughcompensationforimprisonmentfollowingawrongfulconvictionisavailable,ifthatconvictionisaconsequenceoftheincompetenceorpoorserviceoftheclient’sadvocate,after-the-event redress is poor recompense for a situation that could have been avoided by morecompetentorbetterrepresentationfromtheclient’s lawyer. Monetarycompensationcannotmakegood the damage done to a person’s well-being, reputation and personal life by time spentunnecessarilyimprisoned.Inthisandothercircumstances,regulatingtoassurecompetencebeforetheeventispreferabletoregulatingonlyforcomplaintorcompensationafterit.

This is aparticulardimensionof ‘credence’ goods and services,where the consumer is rarely in aposition toassessqualityorutilityuntil after consumption. Of course,before-the-eventassurancewillnevereliminateallpoorserviceor incompetence,andsobothassuranceandredressmightberequired. Myconcernherewouldbetoidentifycircumstancesinwhichrelianceonafter-the-eventredressshouldnotbetheonlyorprincipalresponseofa‘decent’society.

Whereregulationisjustifiedinthepublicinterest,itisnotnecessaryinprincipletoconstructsoastoallow regulated activities to be carried out only by those who hold broader legal qualifications.

38SuchaviewisalsoconsistentwiththeGovernment’sgrowthstrategyforprofessionalandbusinessservices:cf.DBIS

(2013).


Thereisnoreasonwhy,asnow,anewregulatorshouldnotbeapprovedwithpowersonlyinrespectof one or a limited number of regulated legal activities. The issue of whether a broader legalunderstanding or experience is necessary39in the context of each regulated activity is one to beweighedintheassessmentofwhethertorecommendapprovalof thenewregulator(cf.paragraph13 of Schedule 4 to the Legal Services Act). In an activity-based approach to regulation, simplyattaching the authority to conduct a regulated legal activity to a professional qualification is alsoquestionable.Thespecificrighttopractisesuchanactivitycouldbegrantedasaseparateauthorityin relation toeachactivity (say,bywayofoneormoreendorsements toapractisingcertificateorlicence)whenanapprovedregulatorissatisfiedthatthepractitioner’scompetenceinrelationtothatactivityhasbeensuitablydemonstratedandismanifestlycurrent.

Further,wherethepublic interest justifiesregulationofa legalactivity, it is thenarguablethat theneedfor(andthe factof) thatactivitybeingcarriedoutbyaregulatedpersonshouldbeexpresslynotified to consumers and clients. Thus, where any issue is taken to an adviser by a client thatinvolvessucharegulatedactivity,considerationcouldbegiventorequiringthattheadviser’stermsofbusinessorletterofretainerstatethatthiselementoftheclient’sinstructionsmustbeperformedby an authorised or licensed person, and then give the name and accreditation of an authorisedperson(s)whowillberesponsibletotheclientforthatelementofthework40.

5.5.1.2 Regulationismoreeffective

Forme,itisnotsufficientmerelythatthereisapublicinterestjustificationforregulation:theremustalsobeacase that formalregulationprovidesabetterresponseormoreprotection forconsumersthannotregulating.

Asanticipatedinparagraph5.4above,thereareotherapproachesthatmightbeadoptedandneedtobecomparedinassessingwhetherornotregulationismoreeffective.Inthecontextoflegalservices,thismightsuggestdoingnothingspecificandrelyingonthegenerallawsapplyingtocompetitionandbusinessbehaviour todealwithanyconsumerdetriment. Anotherresponsewouldbe toconsideralternativeapproachestoregulation(suchasvoluntarycodesofconduct).Aswiththegenerallaw,toooftenthesearealsofocusedonconsumerprotectionissuesand,intheabsenceoftrueregulatoryenforceability,provideonlyafter-the-eventresponses.

In general, these alternatives to direct, formal regulation apply to behaviour by providers in theacquisition of new business or in their conduct of business, and normally offer after-the-eventrestitution, compensation or sanction. As such, they tend to be focused on addressing consumerprotection.Asexplainedinparagraph5.5.1.1above,thisisonlyoneofthecircumstancesinwhichIwould argue that regulatory intervention could be justified (the other being to secure the publicgood); and further there are situations in the provision of legal advice and representationwhereafter-the-eventresponsestoconsumerdetrimentaremanifestlynotsufficient.

39Thismustbenecessary,ratherthandesirable:onecouldalwaysarguethatitisdesirableandsensible(andevenrational)

foraconsumertoseekadvicefromapractitionerwiththebroadestpossibleknowledgeandexperience.Butthatdesirabilityisnotamatterforregulation:thenecessitytoregulatearisesfromaproperapplicationoftheneedtosecurethepublicgoodortoavoidconsumerdetrimentasdescribedratherthantoavoidabroaderdisadvantagearisingfromconsumers’foolishness,short-sightednessorpenny-pinching.

40Thispersonneednotnecessarilybetheindividualwhoactuallycarriesouttheclient’sworkoranypartofit:thepointhererelatestosomeonebeingresponsibletotheclientforregulatedworkandcarryingaccountabilityforit.


In some circumstances, however, these alternative responses also lose their force. For example,theremightbesituationswherethereisamandatoryalternative.Somelegalactivitieswhicharenotcurrently reserved are nevertheless provided by regulated individuals or entities other thanauthorised persons under the Legal Services Act. Tax advice provided by chartered accountantswould be an example. Under the regulatory framework applying to accountants, there will bemandatory obligations that certainly offer an acceptable alternative to the reservation of thoseactivities.

However,totheextentthattheseobligationsonlyapplytonon-reservedactivities,theprovisionofthosesameactivitiesbyotherproviderswhoarenotboundbythesameobligationsmeansthatthecurrent framework forreservationat leastpresentsauniformprotectionacross themarketratherthan a patchwork ofmandatory and voluntary approaches that are dependent on the consumer’schoiceofadviser.Inotherwords,thenatureandextentofanycurrentprotectiondoesnotariseforallconsumersbecauseofregulationattachingtotheactivitybutratherfromthechoiceofadviserbytheconsumer.

My concernhere is not that the regulatory effectivenessof obligations attaching to, say, charteredaccountants,isanylessthanthatattachingtoauthorisedpersons–farfromit,sinceIdonotbelievethatthisisthecase.Rather,myuneaseisthat,iftheactivityinquestionissufficientlyimportanttothepublic interest towarrant regulation, thenatureor scopeof that regulation (and therefore thedegreeofprotectionoffered)oughtnot to reston the serendipitous choiceby the consumerof anadviser who might be an authorised person, a regulated but not authorised person subject tomandatory duties, an unregulated person subject to voluntary and minimally enforceableobligations,oranunregulatedpersonsubjecttonoobligationsatallbeyondthegenerallaw.

Iaccept thatregulation inevitablycreatesbarriers toentryandsopossibly limitscompetition,andwillalsoprobablyincreasethecostsofprovidersenteringandremaininginthelegalservicesmarket(and that those costswill in all likelihoodbepassedon to consumers). However,myview is thatwhere the public interest justifies regulation, this should outweigh these consequential effects. Ibelieve in, and support, competition in the provision of legal services – but not at the expense ofsecuringthepublicgoodortheachievementofoverridingandprimaryregulatoryobjectives.

I also believe that, again, consistent with the general approach that any form of regulatoryinterventionshouldbeproportionatetotheidentifiedmischiefandleastrestrictiveofcompetition,thepublicinterestjustificationforregulationshouldensurethatregulatoryinterventionwillsecurethepublicgoodorconsumerprotection,withoutnecessarilyorinevitablyinhibitingcompetitionorinnovationamongthosewhoareauthorisedtodelivertheregulatedactivity.Evenso,thismightstillpresent a particular challenge in relation to the regulation of multidisciplinary practices (MDPs),wheretheentityinquestionisalsoregulatedinrespectofsomeorallofitsactivitiesbyabodyotherthanitslicensingauthorityforlegalservices.

5.5.1.3 Additionalprotection

IhavealreadynotedtheregulatorygapinthelegalservicesmarketofEnglandandWales,asaresultofwhichconsumersmayfindthat, iftheypurchaseanon-reservedandnon-regulatedlegalactivityfromaunregulatedprovider,thereisnoprotectionbeyondthatprovidedbythegenerallawrelatingtothesupplyofservices.Withthisinmind,ifaconsumerchooses(orisrequiredtochoose)alegalserviceproviderwhoissubjecttoregulationbyvirtueofbeinganauthorisedperson,itishelpfultoconsider what additional level of protection results from purchasing a regulated activity from an


authorised person – andwhether such protection is, in the circumstances, justified, proportionateandtargeted.

To the extent that a dissatisfied client who has received incompetent or poor service from anauthorisedpersoncouldpursueanactioninnegligence,orusethegenerallawrelatingtothesaleofgoodsand services, thiswould leave the client innobetterposition thanwhenengaging someonewhoisnotauthorised.However,additionalprotectionavailableundertheexistingframeworkthatisrelevanttothecurrentdiscussionarisesbywayof:

(a) Theprofessionalprinciples(cf.paragraph3.4.1above)andtheassociatedprotectionarising from them (see sections 90 and 176 of the Legal Services Act: also atparagraph3.4.1above), aswell as theprotectionof clientmoney. Theprofessionalprinciplesapplytoauthorisedpersons; it iscurrentlytheauthorisationtoconductareserved activity that brings the provider with the regulatory framework thatincludestheseprinciplesandtheobligationtocomplywiththem.

(b) The first-tier complaints and disciplinary processes that apply to providers of legalservicesiftheyareregulatedbyanapprovedregulator(seesections21(1)and122(1)oftheLegalServicesAct). Thecomplaintitselfdoesnothavetorelatetoareservedlegalactivity. However,aswiththeprofessionalprinciples, it istheauthorisationtoconduct a reservedactivity that currentlybrings theproviderwithin the regulatoryframeworkthatincludestherequirementforacomplaintsprocess.

(c) Where the first-tier complaints process does not deliver an outcome satisfactory tothecomplainant(cf.section126),thentheissuemaybereferredbythecomplainanttotheLegalOmbudsman(seePart6oftheAct).TheOmbudsman’sjurisdictionagainextends only to those authorised to provide a reserved legal activity, although thecomplaintitselfcanrelatetoanon-reservedactivity(section128(1)).Issuesthatdonotconstituteprofessionalmisconduct (whichmustbereferredby theOmbudsmantotherelevantauthorisingbody:section143)willbedealtwithbytheOmbudsman,whohas thepowertorequireanapology, limitorrequire therefundof fees,awardcompensation forpoorservice,andorder rectificationat theprovider’sexpense (cf.section137).

(d) Theavailabilityofindemnityandcompensationarrangementsthatareaconsequenceof theprovidersofreserved legalactivitiesbeingregulatedor licensedbyapprovedbodies(seesections21(1)and83(5)). Thesemakeaconsiderabledifference to theprotection available to clients who instruct authorised persons, because themandatorynatureof indemnityandcompensationarrangementsgivesanaggrievedclient much greater certainty of securing recompense if the practitioner provideswrongadviceordefaultsinsomeway.

Given that, in my conception, one of the major justifications for regulation (cf. paragraph 5.5.1.1above) is the inadequacy of after-the-event remedies of complaint and compensation, it is worthnotingthatnotalloftheadditionalprotectionofferedisconfinedinthisway(forinstance,theLegalOmbudsmanhaspowerstodirectrectification).Further,thepossibilityoftheseremedies,combinedwithdisciplinaryactionandthepotentiallossoftherighttopractise,shouldalsoencouragethetypeofbefore-the-eventcompetenceandcarethatwillincreasethequalityofthesecredencepurchases.

Theadditionalprotectionofferedwill apply tonon-reservedactivities aswell as to reservedones.However, this protection is currently not available at all until a service is provided by a personauthorisedinrespectofoneofthereservedlegalactivities.Itisthereforetheexistenceofreservationthatbringstheseprotectionsintobeing.


Althoughthereissomeadditionalcostinfundingtheseprotections(suchasthecostsoftrainingandauthorisation,maintaininganinternalcomplaintsprocess,contributionstoregulatorystructuresandcompensationfunds,andindemnityinsurancepremiums),wherethepublicinterestjustifiesbefore-the-eventassurance, thenthebenefitsderivedfromregulationarguablyoutweighand justifytheseadditional costs (evenwhere they are passed on to consumers inwhole or part). It still remainsimportant,however,thatthesubordinateobjectiveofencouragingcompetitionandinnovationinthedeliveryoflegalservicesisenabled(soastoensuremaximumcost-effectivenessintheseregulatedactivities). Thiswouldsuggestaregulatoryframeworkthatdisallowsorremovesotherregulatoryrestrictions(suchasthoseonpermissiblebusinessstructuresandaccesstocapital)thatmightdriveupcostsfurtherorinhibittheirreductionthroughscale-efficienciesordifferentwaysofworking.

Where a consumer lacks knowledge, experience or power in pursuing a complaint against aprofessional adviser, there is a collective benefit to all clients in having a regulator impose andenforcecodesofpractice,andcomplaintsanddisciplinaryprocedureswhich individual consumerscouldnothopetomatch.Thiscanincludethe‘specialisation’anddeeperknowledgeoftheregulatorinunderstandingwhen,andtowhatextent,anytransgressionorpoorservicehasoccurred; itwillalsoincludethestructureandstaffingoftheregulatorwiththeknowledgeandresourcesneededtotake action against a practitioner; and it will also include the implicit power of the regulator toimpose sanctions (including ultimately the removal of the right to practise) where the issue isseriousandthecomplaintisnotaddressedpromptlyandproperly41.

5.5.2 Thenatureandconsequencesofregulation

Presently,therighttocarryoutaregulatedlegalactivitycanonlybegivenbyanapprovedregulator.The existence of an approved regulator then ensures that clients have the benefit of the range ofregulatory arrangements relating to qualification, authorisation, practice, conduct, discipline,indemnityandcompensation(cf.section21oftheLegalServicesAct).

As indicated in paragraph 5.5.1.1 above, although regulation means that a relevant legal activitycouldonlybecarriedoutbyan‘authorisedperson’,itdoesnotfollowthattheauthorisationshouldonly be given to someone who holds a full legal qualification. However, where before-the-eventassuranceisjustified,itwillbeimportantthattheappropriateapprovedregulatorssetsuitableentryrequirementsbywayofrelevanttrainingandfitnesstopractise,andthattheyassureconsumersthatthenecessaryexpertiseandexperience ismaintainedbycontinuingprofessionaldevelopmentandqualityassurancerequirements.

Therearethreesignificantlimitationsintheregulatoryapproachoftheexistingframework:

(1) Forthemostpart,authorisationtopractisethereservedlegalactivitiesisattachedtotheaward of professional titles (such as barrister, solicitor, or chartered legal executive).This can impose additional burdens and costs on those practitioners whomight onlywish to conduct fewer of the reserved activities than are automatically authorised byvirtueoftheirtitle.Forexample,solicitorsareauthorisedtocarryoutprobateactivities,even though their entire practising career might have been spent in contentious orcorporatepracticewithnoexposuretoprobatemattersatall. Inthissense,thecostofinitial qualification might well have been greater than reasonably required; and thecurrencyof theauthorisation inrespectofreservedactivities thatarenotpursuedwill

41Inthelanguageofeconomictheory,thisrepresentsa‘positiveexternality’.


have lapsed and will, in later years, constitute a risk of consumer detriment from apractitionerwho,forsomereason,decidestotakeupthoselapsedactivities.

(2) Theadditionalprotectionsidentifiedinparagraph5.5.1.3aboveonlycomeintoeffectinrelationtoauthorisedpersons.Thecostsofthisprotectionwillthereforeneedtocoverbothbefore-the-eventaccreditationandauthorisationaswellasafter-the-eventredress.In some cases, after-the-event redress might be sufficient to deal with the consumerprotectionrequired,giventheriskinthenatureoftheadviceorrepresentationsought.The inability of the current framework to separate the availability of before-the-eventassuranceandafter-the-eventredresspotentiallyleadstoeitherorbothofunwarrantedcostandlackofadequateprotection.

(3) Because the reserved legal activities are the fulcrum around which the existingframeworkisstructured,authorisationandprotectionspringfromtheseactivities.Theassumptionthatthereisarationalandjustifiablefoundationforthereservationoftheseactivitiesinthefirstplaceiswrong42,anditmightthereforebereasonabletoconsiderinthisreviewwhethertherecouldbeamorerationalandpolicy-drivenfoundationtothefutureregulationoflegalservices.

The existing framework therefore starts froma flawedassumption (andprobablydoesnot securethe public good in themost effectiveway), proceeds to add unnecessary costs and limitations onconsumerprotection,andthereforefailstomeetapublicinteresttestforregulationortheobjectivesofcost-effectiveness.

5.5.3 Conclusion

Regulationbytitle,personoractivitycaneachsecuresomeelementofthepublicinterest,andthereisadegreeofinevitabilityinmorethanoneformworkingintandemwithanother.Mycontentionisthatthepublicinterestcanjustifytheregulationoflegalactivitieswhere:

(1) thisisrequiredtosecureapublicgoodorprotecttheconsumer(orboth);and

(2) either other responsesare lesseffectiveor regulationprovidesadditionalprotectionthatsupports(1).

Reservation is one available response to a perceived justification for regulation, along with othergeneral legal requirements and law-specific regulation. The question for policy-makers andregulatorsiswhichresponsebestservesthepublicinterest.

Inanyevent,formalandexplicitregulationwillbeimplementedwithinabroadersocialandculturalenvironment with sets of expectations and norms, and with the additional impetus of providerswishingtoavoidreputationalrisk. Theseextra-regulatoryinfluencescanworkbothtosupportandtofrustrateformalregulation.Nevertheless,inmyview,thebindingnatureofformalregulation(anditssuperioritytovoluntaryself-regulation)suggeststhatregulationshouldbepursuedforthepublicinterestreasonsproposedabove,andthatpolicy-makersandregulatorsshouldnotbereticentaboutextendingtheregulatorynetinthisway.

42SeeLegalServicesInstitute(2010)Reservedlegalactivities:historyandrationale:availableat

http://stephenmayson.files.wordpress.com/2013/08/mayson-marley-2010-reserved-legal-activities-history-and-rationale.pdf.


Theexistingregulatoryframeworkforlegalservicesfailstoachievethepublicinterestaselaboratedearlier,andafundamentalreviewandanewapproachtothedesignoftheframeworkisjustified.Amore principled foundation than the currently reserved legal activities is required, along with aclearer distinction between, and justification for, before-the-event assurance and after-the-eventredress(andwherethelatterisnotconditionalon,ornecessarilyattachedto,theformer).


Section6.Anewapproachtolegalservicesregulation

MyassertionsofaristhattheframeworkoftheLegalServicesAct2007isflawedbyitsrelianceonthe existing set of reserved legal activities and the absence of any priorities in its regulatoryobjectives, and that the structure of regulation that flows from it is unnecessarily complex andinadequate. This Section therefore explores ideas for a different, but principled, approach to theregulationoflegalservicesthatseekstoaddresstheseshortcomingsofthe2007Act.

6.1 Foundationsofregulation

ThisSectionoffersthoughtsontheprinciplesthatmightgovern:

(i) whatshouldberegulated;

(ii) whoshouldberegulated;

(iii) howtheyshouldberegulated;and

(iv) bywhomshouldtheyberegulated.

Forme,theanswerto(i)isfundamentalandwoulddrivetherest.Theexistingframeworkmixesitsapproach and regulates reserved activities, individuals and entities as authorised or approvedpersons,andtheholdersofcertainprotectedtitles.BasedontheexperienceoftheLegalServicesAct,there isnowastrongcase for theprincipaldriverof futureregulationbeing theactivities involvedandthepolicyjustificationforregulatingthoseactivities.

Inthefollowingparagraphs,Idrawadistinctionbetweenthoseactivitiesthatmightinthefuturebereserved legalactivities(broadlyinthesamewayasnow)andwouldthereforeonlybeprovidedbythose who are authorised to do so, and regulated legal activities which need not necessarily beprovidedbyauthorisedpersonsbutwhichwouldneverthelessbesubjecttoafter-the-eventredress.Inthisconception,reservedlegalactivitieswouldprovidebothbefore-the-eventandafter-the-eventprotection, whilst regulated legal activities would attract only after-the-event protection: this isexploredfurtherinparagraph6.4below.

6.2 Whatshouldberegulated:potentialpublicgoodreservations

Apolicy-basedapproachtoregulationcouldsupport(asinthecurrentframework)thereservationofcertainlegalactivitiestoauthorisedpersonsinordertosecurethepublicgood(aselaboratedinparagraph5.5.1.1above).Underthisheading,thejustificationtoregulateshouldbeapolicydecisionsupported by principle: this is different to the consumer protection reservations discussed inparagraph 6.3 below, which would need to be supported by evidence of risk or detriment toconsumers.Thislineofthinkingisconsistent,forexample,withMilne’sviewthat(1993:49)“manyjudgments of the requirements of the public interest have to be based on reasons which are notdecisiveandevidencewhichisnotconclusive”. Itdoes,however,presentdifficultiesforregulatorswhoseekalwaystobe ‘evidence-based’,andwhorightlypreferdecisionsmadeonthebasisof factratherthanthespecialpleadingoffactions.Nevertheless,implicitfaithintheavailability,reliabilityordeterminativepowerofevidencetoinformeverydecisionwillbemisplaced.


6.2.1 Activitiesconnectedtotheadministrationofjusticeanddueprocess

Reserving tosecure thepublic interestobjectivesandpublicgoodoutcomesrelating to the ruleoflaw, the administration of justice, access to justice, and independent, strong and effective legalrepresentationcouldjustifythecontinuingreservationtoauthorisedpersonsof:

(1) rightsofaudience;

(2) rightstoconductlitigation(withassociatedlegalprofessionalprivilege43);and

(3) court-relatedreservedinstrumentactivities(thesearepreparinganinstrumentrelatingtocourtproceedings inEnglandandWales:seeLegalServicesAct,Schedule2,paragraph5(1)(c)and(2)).

For this purpose, ‘court’ includes the first-tier and upper tribunal (section 207(1) of the LegalServicesAct).

AconclusionthattheseactivitiesshouldremainreservedwouldbeconsistentwiththeviewinthefinalreportoftheRoyalCommissiononLegalServices44whichsuggestedthattheneedforeffectiveadministrationof justice is validation for the reservationof rightsof audience (Chapter18,with aparticular emphasis on the skills required and independence) and the conduct of litigation(paragraph19.17,whichemphasisestheknowledgeandintegrityofofficersofthecourt),inthattheproperdischargeoftheseresponsibilitiesassistsinthesmoothfunctioningofthecourtsystem.

Thecontinuationofthesecurrentreservationswouldsecurethepublicinterestobjectivesandpublicgood outcomes relating to the rule of law, the administration of justice, access to justice, andindependent, strong and effective legal advice and representation, as well as promoting andprotectingtheinterestsoftheUKingeneralbothcommerciallyandasaleadinggloballegalforum.The credibility and reliability of precedent in a common law system are vital to the underlyingcredibilityofthelegalsystemasawhole(whichisimportanttoachievingtheregulatoryobjectiveofsupportingtheruleoflaw).

Removing or diluting the requirement for these activities to be carried out by authorised personswould probably lead to suggestions that there would be higher levels of self-representation andlitigants-in-person,aswellas–perhapsmoredisturbingly–representationbypaidbutincompetentorinexperiencedadvocates.This,inturn,couldcreategreaterinefficienciesinthejusticesystemascourts and judges were forced to deal with, and assist, those with little or no experience orcompetence45. Such inefficienciescouldgreatly reduce theefficacyaswellas thecost-efficiencyofthe justicesystem,andpotentiallyresult in lesscredibleandreliable justiceanddisputeresolutionandinmuchpoorervalueformoneytothepublicpurse.

Publicinterestreservationthereforewouldnotneedtounderminethecontinuedrightofindividualsto represent themselves, but it would require the exclusion of non-authorised persons, especiallywheretheyactforreward,butalsoarguablywheretheydonot.Therearecurrentlynoexemptionsfor rights of audience or rights to conduct litigation being carried out otherwise than for or in

43Irecognisetheadditionalregulatorychallengesconnectedwithlegalprofessionalprivilege,butdonotseektodealwith

theminthispaper.44(1979)Cmnd.7648(London,HMStationeryOffice).45Overtime,asself-representationandotherchallengestothesmoothrunningofjudiciallistsincrease,onemightalso

expectthatthenumberandqualityofapplicationsforjudicialofficecouldalsodecline.Ontheotherhand,workinCanada,whichlookstosupport‘self-helpers’astheynavigatetheirwayaroundthecourtssystem,mightpointtowaysinwhichtheoverallefficiency(andcost-efficiency)ofthesystemcouldbepromoted.


expectation of any fee, gain or reward; indeed, consideration might be given to removing theexemption that currently applies under Sch. 3, para 3(10) for court-related reserved instrumentactivities.

For these reasons, this reservationshouldnotbe restrictedonly tocriminalproceedingsorwherethelibertyofthecitizenisatrisk:thepublicinterestinconfidenceintheeffectivenessofthejusticesystemismuchmoreextensive.Theextracostthatwouldbebornebyanindividualconsumerasaresultofengagingauthorisedlegalrepresentation(asopposedtobeingalitigant-in-personorbeingallowedtoinstructanon-authorisedadvocate)couldbejustifiedbygainsinanumberofareas:

• thepersonalbenefit to the individual consumerofbeing represented in courtby someonetrainedtodoso;

• the gainsmade by all other consumerswithin the justice system in having that structureoperatingaseffectivelyaspossibleanddeliveringreliableoutcomes;

• securingequalityofcitizenshipandparticipation(cf.paragraph3.2above);• reduced costs to public finances through having a justice system that operates efficiently;

and• thecontinuingadditionalrevenuesbroughtintotheUKthatsuchasystemattracts.

Thesereservationswouldalsoachieveanadditionalconsumerprotectionbenefit(cf.paragraph6.3below)inthepurchaseof‘credence’services.Incompetenceorpoorserviceinthedeliveryofthesereservedactivitiescouldresultinirreparabledetrimenttotheclient–suchasincarceration,fines,acriminalrecord, lossofassetsorofaccesstochildren,andsoon. Theseconsequencesmightarise,for instance, fromfailingtoobtainevidenceorcallwitnesses,notcallingexpertevidence, failingtoobjecttoevidence,conductingacross-examinationthatisnotinaccordancewithinstructions,askingquestionsthatallowtheintroductionofotherwiseinadmissibleevidence,missingrelevantdeadlines,orproblemswithdisclosure.

Provenincompetenceintheexerciseofrightsofaudienceisnotnecessarilysufficienttooverturnajudicialresult,suchthatbefore-the-eventassurancebecomesmorevaluableinthepossibleabsenceofafter-the-eventredress.AsBuxtonL.J.explainedinR.v.Day[2003]EWCACiv1060atparagraph15:

While incompetent representation isalways tobedeplored; isanunderstandablesourceof justifiedcomplaint by litigants and their families; and may expose the lawyers concerned to professionalsanctions; it cannot in itself forma groundof appeal or a reasonwhy a conviction should be foundunsafe.Weacceptthat,followingthedecisionofthiscourtinThakrar[2001]EWCACrim109646,thetest is indeed the single test of safety, and that the court no longer has to concern itself withintermediatequestionssuchaswhethertheadvocacyhasbeenflagrantlyincompetent.Butinordertoestablishlackofsafetyinanincompetencecasetheappellanthastogobeyondtheincompetenceandshowthat the incompetence led to identifiableerrorsor irregularities in the trial,which themselvesrenderedtheprocessunfairorunsafe.

LordHoffman addressed the same point in relation to the conduct of litigation in theArthurHallcase47:

46TheCourtofAppealinR.v.JoshilThakrar[2001]EWCACrim1096developedthe‘safetyoftheconviction’test,tobe

consideredalongsideaperson’srighttoafairtrialunderArticle6oftheEuropeanConventiononHumanRights.IrrespectiveoftheneedtocomplywiththeConvention,thepublicgoodofsecuringfairtrialsshouldbeanimportantconsiderationinassuringthecompetenceofthosewhorepresentboththeprosecutingauthorityandtheaccused.

47SeeArthur J.SHallandCo. v. Simons,andBarrattv.AnsellandOthers (tradingasWoolfSeddon (a firm)), andHarrisv.ScholfieldRobertsandHill(conjoinedappeals)[2000]UKHL38,atpara34.


Ifaclientcouldsuehislawyerfornegligenceinconductinghislitigation,hewouldhavetoprovenotonly that the lawyerhadbeennegligentbut also thathisnegligencehadanadverseeffectupon theoutcome.Thiswouldusuallymeanprovingthathewouldhavewonacasewhichhelost.

After-the-eventrestitutionorcompensationmightbeavailable,butinmanyofthesecircumstancesthismightnotrepresentasufficient justification for failing toassurebefore-the-eventcompetence.Inaddition,itcanprovechallengingtoestablishnegligence,andthismightdeterotherwiseworthyclaimants from taking any action – especially where the consequences are not as dire as thosesuggestedearlier.Further,foraconsumertorectifyanyharmcausedbythenegligentexerciseofarightofaudience,heorshewillhavetoengageanotherlawyertobringaclaim. Fromthepointofview of thewronged consumer, this potentially raises the (off-putting) perception of a conflict ofinterest–evenifnosuchconflictinfactexists.

Given the reserved rights currently attaching to costs lawyers (including rights of audience andrightstoconductlitigationinrelationtocostsmatters,aswellastheadministrationofoaths),whenshifting emphasis from regulation by title to regulation by activity, there could well be a publicinterestjustificationforextendingspecificreservation

(4) lawcostsactivities

(withthoseactivitiestobedefined).

Finallyunderthissub-heading,thepublicinterestcouldalsojustifycontinuingreservationfor

(5) theadministrationofoaths.

Thereliancethatcanbeplacedonoathsdulyadministeredhasmanypublicgoodbenefitsinsecuringconfidenceandefficiencyintheadministrationofjustice(inrelation,say,toaffidavits),aswellasintransactions andappointments (suchas a changeofnameorpowerof attorney). Thispotentiallyavoids the costs and uncertainty of establishing or contesting what would be otherwise arguablestatements.

Thepossibleconsequencesofanoathbeingimproperlyadministeredareasvariedasthesituationsinwhichtheyarerequired,fromadoctorembarkingonhisorhercareertoawitnessgivingevidenceincourt. Insomesituationsrectificationmaybepossiblesimplyby theclient involvedswearingavalidoath48;inothers,irreparableharmmayhaveoccurred.

A significant part of the reliability of an oath and the credence which may be attached to it is aconsequence of the standing of the commissioner for oathswho administered it. For this reason,there are criminal penalties attached to forging or fraudulently altering a commissioner’s seal orsignature,orknowinglytenderingorusinganaffidavithavingsuchaforgedorfraudulentlyalteredsealorsignature49.Whilethismayservetopunishtheperpetratorinvolved,itwilldolittletorectifyanyharmcausedtoaninnocentclientorthirdpartyrelyingonoraffectedbytherelevantdocument.Again,therefore,Isupportthecontinuationofthisreservedlegalactivitytoachievethepublicgoodidentified(aswellassomeincidentalbefore-the-eventconsumerprotection).

48Everycommissionerforoathsshouldstatewhenandwhereeachoathistaken(CommissionersforOathsAct1889,s.5).

Failingtomakesuchastatementwouldthereforerenderanoathinvalid,aswouldswearinganoathbeforeapersonwhowasnotacommissionerforoathsorwhowasrepresentingapartyinlegalproceedingsinwhichthepersonswearingtheoathwasinvolved.

49CommissionersforOathsAct1889,s.8.


Thereare,ofcourse,manydocumentswhichareofpublicimportancethatdonotneedtobesworn(suchasapassportapplicationorawill);thesedocumentsarenotcurrentlysubjecttoanyformofreservedlegalactivity.Documentsthatarenotarised(cf.paragraph6.2.2below)arealsoregulatedseparately.Itisarguablethatthespecialstatusoftheadministrationofoathsshouldderivefromthestatusofthepersonadministeringtheoathbeinginsomewayanofficerofthecourtorotherpublicofficial. This makes it questionable whether the authorisation should be extended (as now) toessentiallyallauthorisedpersons.Thetrainingtodischargethisreservedfunctioncurrentlyseemstobesuperficial(atbest),andtheactivityisoftencarriedoutwithlittleregardforitssolemnityandbythosewhooftentakethefeeasapersonalreward(evenwheretheyareemployedbyafirm).

Iwouldthereforesuggestthatthoughtshouldbegiventoconfiningtheauthorisationtoadministeroaths to those authorised personswho are separately trained and accredited in respect of futurepublicgoodreserved legalactivities;and that the training for thesereservedrightsshould includeappropriatetrainingfortheadministrationofoaths.

Again, theabsenceofanexemptionforservicesprovidedwithoutrewardappearsappropriate: thenatureoftheoathandthevaluethatmustbeattachedtoitsuggestthatoathsadministeredbynon-authorised persons for free cannot be considered to carry the required degree of credibility orveracity.Forthesamereason,self-administeredoathswouldbenonsense.

6.2.2 Notarialactivities

SecuringtheeffectiveadministrationofjusticeandgloballegalreputationwithintheUK,aswellasprotectingandpromotingconfidenceintheglobaltradingpositionof‘UKplc’,justifiesthecontinuingreservationtoauthorisedpersonsof:

(6) notarialactivities.

Theexistenceofwell-definedandenforceablepropertyrights isalso important for theproperandeffectivefunctioningofamarketeconomy.So,inthecontextofthemandatoryuseofanotary,Vanden Bergh & Montangie (2006: 8-9) point out (though perhaps in language more familiar toeconomists):

Through the mandatory mediation of a [notary], the government aims at minimising the risk thattransactions cause legal uncertainty, and thus attempts tominimise the negative effects onwelfare.The [notary] acts as a compliance officer who will exert an ex ante control of the quality of thetransactions.Inthiswayexposttransactioncosts,suchaslitigationcostsarereducedoreventotallyeliminated.Obviously,thiscreatesbenefitsforthepartiesinvolved,butthemediationofthe[notary]transcends this micro-level, which is why it is classified as a public function. There are positiveexternalitiesforthecommunityasawhole:thegovernmentsavesresources,otherwiseengagedinamoreextensivejudicialapparatus,andthirdpartieshavemoreandcorrectinformationconcerningacertaintransaction.

This quotation emphasises the public function of notarial activities, and supports the propositionthattheyachieveapublicgoodandplayaroleingeneratingandprotectingeconomicwealth. Theroleofnotarialactivitiesassistsinternationalcommerce,althoughprivateindividualsmayalsomakeuseofanotary’sservices.

Notariesverifythecapacityoftheirclientstoenteratransaction,confirmtheidentityofclients,andrecord of all this information; they maintain detailed records, including copies of all documentscertifiedwith copies of the relevant clients’ identity attached. This record-keeping forms a paper


trailforeachdocumentverifiedthroughthenotarytotheclient.Notonlydoesthisprovideacertainlevel of reassurance for the other parties in a transaction, but it also serves a wider purpose inhelpingtocombatinternationalfraud.

Duetothenatureoftheworkofnotaries,anyerrormadeislikelytobediscoveredafterthefact.Ifawrongfullycertifieddocumentisacceptedforuseinaforeigntransaction,problemsmayonlyarisein the future, after decisions have already been made based on the accuracy of that document.Similarly, if for some reason a notary’s records are needed to trace someone through a pastdocument, that will be the time when any gaps in those records will appear. It is this status ofnotarial activities as ‘credence’ services that may provide some additional justification for theirreservation.

The reliance that parties to (particularly) commercial – and often international – transactions canplaceonnotariseddocumentationallowstrade,andtheresolutionofdisputes,tobeundertakenwithgreater confidence. Without regulatory force, confidence in the activities andpromises of Englishparticipants in international trade could be compromised, to the detriment of the nation’s growthandeconomicwell-being.

Giventhenatureandimportanceofnotarialactivities,andthecredencethatmustbeplacedonthenotary’sverification(andprofessionalregulationandstandingtobackitup),thecurrentexemptioninSchedule3,paragraph5(4)oftheLegalServicesActforindividualscarryingoutnotarialactivitiesotherwisethan foror inexpectationofa fee,gainorrewardseemsoutofplace,andconsiderationshouldbegiventowhetherthisexemptioncanbejustifiedonpublicinterestgrounds.Thereseemstome tobea stronger case in relation tonotarial activities than there is for theadministrationofoaths (which has no such exemption). There is also no case for self-representation here: anindividualcannotcrediblyprovidenotarial services for themselves: thewholerationaleofnotarialservicesisindependentverification.

6.2.3 Immigrationadviceandservices

Immigration advice and services are currently regulated, but not reserved, activities. Under theImmigrationandAsylumAct1999, ‘immigrationadvice’relatestoaparticularindividualinrespectofthefollowingmatters,providedthatitisnotgiveninconnectionwithrepresentinganindividualbeforeacourtincriminalproceedingsormattersancillarytocriminalproceedings(section82(1)):

(a) aclaimforasylum;(b) anapplicationfor,orforthevariationof,entryclearanceorleavetoenterorremain

intheUnitedKingdom;(c) unlawfulentryintotheUnitedKingdom;(d) nationalityandcitizenshipunderthelawoftheUnitedKingdom;(e) citizenshipoftheEuropeanUnion;(f) admissiontoMemberStatesunderCommunitylaw;(g) residenceinaMemberStateinaccordancewithrightsconferredbyorunder

Communitylaw;(h) removalordeportationfromtheUnitedKingdom;(i) anapplicationforbailundertheImmigrationActsorundertheSpecialImmigration

AppealsCommissionAct1997;and


(j) anappealagainst,oranapplicationforjudicialreviewinrelationto,anydecisiontakeninconnectionwithamatterreferredtoabove.

‘Immigration services’ means making representations in connection with one or more of thesematters,onbehalfofaparticularindividual,either(a)incivilproceedingsbeforeacourt,tribunaloradjudicator in the United Kingdom, or (b) in correspondence with a Minister of the Crown orgovernmentdepartment.

The original suggestion in 2005 in the legal services white paper50that these activities shouldbecomereservedwasnotpursuedintheLegalServicesActforpolicyandpragmaticreasons. Thiscouldnowberevisited.

ThepublicinterestmustbedefinedbyreferencetoaStateorterritory51,andtherightofindividualstoparticipate in society isan integralpartofwhosepublic interest isat stakeandby reference towhich conception of ‘the public’ it is framed. It is therefore in the public interest that advice andrepresentationinrelationtoacitizen’sstatusshouldbegivenonlybythoseappropriatelyqualified.Thiswould help to secure the public interest in ensuring that only thosewho are entitled to thebenefitsofcitizenshiphavetherightsattachedtoit,butalsothatthosewhoaresoentitledarethenabletoparticipatefullyandequally(cf.paragraph3.2above).

Consequently, there is an argument that only those who are legitimately entitled to settle in oursociety should expect the public interest to further their interests as part of the collective. Thequestionofestablishingwhoisorisnotsoentitledshouldaccordinglybefoundedontheadviceandrepresentationofthosewhoaresuitablyauthorisedtoprovideit.Thiswouldthereforesupport(asoriginallyindicatedinthelegalserviceswhitepaper)

(7) immigrationadviceandservices

becoming public interest reserved activities. Given that the notion of reserved legal activities isspecific to England & Wales, there is no insurmountable difficulty in having the same activitiesregulated as reserved activities within this jurisdiction, but regulated differently (though by adifferentregulatorwithcomparablepowers)inScotlandandNorthernIreland.

There would also be a consumer protection benefit (as intended by the 1999 Act) in that thoseseekingtoclarifyorconfirmtheirimmigrationorasylumstatusshouldnotberepresentedbythosewhoarenotappropriatelytrainedandqualified.After-the-eventcomplaintorcompensationislikelytobeamost inadequate remedy for someonedenieda right toenteror reside,orwho iswronglydeported to a country in an asylum case, as a result of incompetent or ineffective advice orrepresentation.

Considerationwouldneedtobegiventowhetherself-representationshouldbeallowed(thereareargumentbothways),butit isdifficulttoseeanyjustificationonsuchanimportantpublic interestissue for any exemption for those who are not appropriately authorised choosing to act withoutreward.

50Cf.DepartmentforConstitutionalAffairs(2005)TheFutureofLegalServices:PuttingConsumersFirst,Cm.6679,

AppendixB.51Thisisimplicitinthereferencesto‘citizens’and‘society’inthedefinitionofthepublicinterestsuggestedearlier(see

para3.2above).


6.2.4 Publiclawadviceandservices

Immigrationadvice and services are addressed separately inparagraph6.2.3 abovebecause thesearealreadyregulated (albeitnot currently reserved) legalactivities,but immigration is in fact justoneofanumberofareasinvolvinglegaladviceandrepresentationthataffectstheindividualinhisorher relationshipwith theState52. Othersare: crimeandhumanrights, socialwelfareandhousing,healthcare,education,taxation,planning,infrastructureandtheenvironment.

To the extent that elements of these relationships require governmental or regulatory decisions,thosedecisionscanbechallengedincourtsortribunals.Absentself-representation,iftheexerciseofrightsofaudienceisareservedactivity, thensomeonewithauthorisationfortherelevantrightsofaudiencewould be required to appear, and the public interest in the effective representation of aparty, in access to justice and in the effective administration of justice would be secured (asdiscussedinparagraph6.2.1above).

However,where non-contentious advice or services are needed, arguably different considerationsapplytothequestionofwhetherornottheproviderofthatadviceandserviceshouldberequiredtobeappropriatelyaccreditedorqualifiedinordertoofferadviceonapaidbasis.Suchadviceactuallyorpotentially affects an individual’s relationshipwith theState, and thereforegoes to theheartofmaintaining the fabricof societyandenabling the legitimateparticipationof citizens in it (the twokey components ofmy conception of the public interest: cf. paragraph 3.2 above). Considerationmightthereforebegiventowhetherthepublicinterestrequiresthat

(8) publiclawadviceandservices

shouldbereservedlegalactivitiesandprovidersauthorised.Reservationcouldprovidebefore-the-eventassuranceofcompetenceandexperienceincircumstanceswhereafter-the-eventredresswilltoooftenproveinadequate.

These areas of law are also areas in which there will usually be a considerable asymmetry ofknowledgeandresourceasbetweentheindividualandtheState.Indeed,theseareoftensomeofthemosttechnicallycomplexareasoflaw.Accesstoappropriatelyqualifiedadviceispartofthewayinwhich,throughregulation,thepublicinterestmightaddressthisimbalance.

As with immigration advice and services, there would be a consumer protection benefit toreservationinthatthoseseekingtoclarifyorconfirmtheirrightsinrelationtotheStateandpublicbodiesshouldnotberepresentedbythosewhoarenotappropriatelytrainedandqualified. After-the-event complaint or compensation is likely to be an inadequate remedy for someone wronglydenied,say,healthcareorhousing,asaresultofincompetentorineffectiveadviceorrepresentation.

Again, self-representation should be allowed, but it is questionable whether there should be anyexemptionforotherswhoarenotappropriatelyauthorisedchoosingtoactwithoutreward.

6.2.5 Property-relatedactivities

Inmyview, ithasbecomequitedifficult todiscern the ‘mischief’ that thecurrentproperty-relatedreservationisintendedtoaddress.UndertheLegalServicesAct,theconceptof‘reservedinstrumentactivities’ means preparing any instrument of transfer or charge for the purposes of the LandRegistrationAct2002,ormakinganapplicationor lodgingadocument for registrationunder that

52Inthiscontext,‘State’includescentralandlocalgovernmentandtheiragencies,aswellasregulatoryauthorities.


Act. For this purpose, an ‘instrument’ includes a contract for the sale or otherdispositionof land(exceptacontract tograntashort leasewithin themeaningofs.54(2)of theLawofPropertyAct1925), but excludes wills and other testamentary instruments, agreements not intended to beexecutedasdeeds(otherthanthecontractsalreadymentioned), lettersorpowersofattorney,andtransfers of stock that contain no trust or limitation (Schedule 2, paragraph 5(3) and (4)). ThereservationalsoextendstopreparinganyotherinstrumentrelatingtorealorpersonalestateforthepurposesofthelawofEnglandandWales(Schedule2,paragraph5(1)).

Thereareexemptionsinrespectof:

(a) farmbusiness tenancieswhere theactivity is carriedoutbyaFellowof theCentralAssociationofAgriculturalValuers,oraMemberorFellowoftheRoyalInstitutionofCharteredSurveyors(Schedule3,paragraph3(5)and(6));

(b) a person employed merely to engross the instrument or application (Schedule 3,paragraph3(9));and

(c) anindividualwhocarriesontheactivityotherwisethanfor,orinexpectationof,andfee,gainorreward(Schedule3,paragraph3(10)).

Beforelandregistration(orstillforfirstregistrationoftitle53),therewouldhavebeenastrongpublicinterestargumentforsuggestingthatthosewhoverifiedtitle(andtherebyensuredthebuyerofgoodtitletothepropertyacquired)shouldbeappropriatelyqualifiedandexperienced.Infact,assurancecould reasonablybe soughtbothby theState (toprovide substance to theState-backedguaranteeinherent in land registration) and by the buyer (to provide greater certainty and security to thepurchase).

Thereare,therefore,publicinterestjustifications(bothpublicgoodandconsumerprotection)fortheproperregistrationoftitle.TheadvantagesareexpressedbytheLandRegistryinthisway54:

Registrationsupportshomeandpropertyownershipandthesecuredcreditmarketby:

• providingstate-backedregistration,givinggreatersecurityoftitle• providinggreaterprotectionagainstthepossibilityoflosingtitlebyadversepossession• indemnifyingtheproprietorsagainstanylossiftheyaredeprivedoftheirstate-backedtitleon

arectificationoftheregister• introducingcertaintyandsimplicityintoconveyancing• settingout,orreferringintheregisterto,alltherightsthatbenefitandaffectthetitleother

thancertainoverridinginterests• showingthegeneralextentofthelandineachtitlebymeansofatitleplan• ensuringthatcapitalcancirculatefreelyintheeconomybymakinglandreadilyavailableas

security• makinglargeholdingsoflandandportfoliosofchargesreadilymarketable.

These considerations are only relevant, of course, to registered title. However, if appropriateexpertisewouldbejustifiedinrelationtofirstregistrationbecauseoftherequirementtoinvestigatehitherto unregistered land, logically it should also apply to any other transactions and transfersrelatingtounregisteredland.Thepotentialcomplexityanduncertaintyofunregisteredtitlestronglysuggest that appropriate expertise shouldbe applied in transactions involving transfers andotherdealingsinunregisteredrealestate.Thiswouldofferconsumersconfidenceinthecompetenceofthe

53About20%oflandinEngland&Walesisstillunregistered:www.landregistry.gov.uk.54Cf.http://www.landregistry.gov.uk/professional/guides/practice-guide-1.


practitioner as well as a degree of protection in an otherwise potentially uncertain and complexprocess.

For thesereasons(andto fulfilpublicgoodobjectives inrelationtoregistered land,andconsumerprotection objectives in relation to unregistered land), there is a strong case for continuing thereservedinstrumentreservationinrespectof(a)preparinganyinstrumentforthepurposesoffirstregistrationundertheLandRegistrationAct2002;(b)makinganapplicationorlodgingadocumentrelating to first registration under that Act; and (c) preparing any other instrument relating tounregistered real estate in England and Wales. In these circumstances, the reservation shouldlogically extend to the preparation of the contract for the sale or other disposition of the land inquestion.

However, even in relation to registered land, there are further – and broader – justifications thatmeritexploration.First,despitetheLandRegistry’sreferencetotheState-backedguaranteeoftitle,therearestilloverridinginterests, local landcharges,andpossiblyotherobligationsorrestrictionswhichcouldaffectthevalueoftheproperty(andthereforethevalueofanysecurity)ortheabilitytouseit.Thereare,therefore,potential(andavoidable)riskstotheclientthatarenotcoveredsimplybyregistrationoftitle,andtheinvolvementofappropriatelyqualifiedandexperiencedadvicewouldreduce the risk of consumer detriment arising from ill-advised transactions or inadequaterepresentation.

Second, there is a further dimension to confidence and efficiency of process that arises from theinvolvement of authorised persons (solicitors and licensed conveyancers). At the point ofcompletion,therewilloftenbeamortgagetobedischargedonthepropertybeingsold. Thebuyerwillneedtoknowthattitletothelandwillpasswithoutbeingsubjecttothatfinancialcharge.Thereisa timing issue:until sellers receive thebuyers’ funds fromthesale, theyarenot inaposition todischargetheirsecuredloans,andthereforecouldnotgivetheassuranceofunencumberedtitle.

This conundrum is usefully solved by the seller’s conveyancer giving an undertaking to the buyerthat the funds received will indeed be used to discharge the mortgage. On the basis of thatundertaking, the buyer should have the confidence to complete the purchase even though at themomentofcompletionthepropertyhasnotyetbeenreleasedfromthemortgage.Further,boththebuyer and seller canhave confidence that theirmoney in thehandsof their respective authorisedconveyancers is protected by the approved regulators’ arrangements for the protection andrepayment of clientmoney if the conveyancer abscondswith it. If therewas any danger that the‘chain’ of simultaneous conveyancing transactions might break down, the efficiency of theconveyancingprocessandtransferof title torealestatecouldbecompromisedto thedetrimentofsocietyatlarge.

Confidence in the conveyancing market, and its efficiency, is therefore underpinned by theundertakings of conveyancers. The standing of the practitioners as authorised persons (whethersolicitorsorlicensedconveyancers,orothersinthefuture)iscrucial.Theirundertakingsarebindingasaprofessionalobligation55,andarebackedupbyprofessionalindemnitycoverandcompensationfundarrangements.

55Theobligationsofundertakingsareonerous,inthatthecourtwillnormallyrequireasolicitor(and,presumably,a

licensedconveyancer)toperformanundertaking(thoughitdoeshavepowertoorderinsteadthatthesolicitormakegoodanylossarisingfromafailuretoperform):Clarkv.LucasSolicitorsLLP[2009]EWHC952.Conveyancersthereforeneedtobeverycarefulinofferingundertakings:forexample,ifaconveyancerhasundertakentodischargeaseller’soutstandingmortgageinfullthen,subjecttothediscretionofthecourt,theundertakingmuststillbefulfilledeveniftheproceedsofsaleareinsufficienttomeetthedebtortheconveyancerhasnotreceivedtheproceedsofsale.


Theconveyancing‘chain’simplycouldnotworkifeverypartyhadtobephysicallyinthesameplaceat the same time, simultaneously exchanging bankers’ drafts. The public good of an efficient andreliable propertymarket therefore depends on the credibility and enforceability of conveyancers’undertakings.Idonotbelievethatthisshouldarisemerelyasanincidental(orcoincidental)benefitoftheconveyancerbeinganauthorisedpersoninrespectofadifferentreservedlegalactivity. Thepublic interest suggests that such an assurance should arise as a direct result of a relevantreservation.

Ithereforeconcludethatthecurrentreservationistoonarrowlydrawn:

(a) In relation to registered land, there is a justification for regulation founded onconsumerprotection. The ‘guarantee’ of title registration is incomplete if there arerisks to the quality of the title and the enjoyment of the property potentiallycompromised by inadequate investigation or representation. There is also risk offraud and practitioners absconding with purchase money or proceeds of sale.Regulation offers either or both of an assurance of competence or additionalprotectionsofthetypeoutlinedinparagraph5.5.1.3above.

(b) On even stronger ground, however, is the public good in the effective and efficientoperation of the housing market, in confidence in land registration, and in someprotection to consumers engaged in transactions involving unregistered land. Thepurpose of reservation here would not be related directly to the validity of thecontract, or completing the land registration process; it is to protect the public(economicandsocial)interestinthecredibilityandreliabilityofthepropertymarket– including the significant contribution to this of conveyancers’ undertakings, asdiscussedabove56.

Accordingly, if reservation is to secure the public good objective in (b) (as well as offeringconsequentialprotectiontotheclient,basedontheimportanceofthetransaction,theasymmetryofinformationbetweenadviserandclient,andtheconsequencesofpooradviceordishonesty,referredtoin(a)above),thenthereservationwouldneedtobedrawndifferentlyandmorebroadlythanatpresent.

Itmaywellbethatthepublicinterestinpublicgoodbenefitsandconsumerprotectioncoincideonthis issue: much will depend on the rules of conduct and discipline that apply to authorisedconveyancersandtotheenforcementoftheirundertakings,aswellastheexistenceofindemnityandcompensationarrangementsthataresufficienttocoverthevalueofthepropertyconcerned57.Tobeeffective,alloftheseprovisionsrelyonenforcementpowers(ratherthanvoluntaryself-regulation,fromwhichroguescouldeasilyexcludethemselves),andthisarguablytipsthebalanceinfavourofreservation58.

56Itmustfollowthatallauthorisedpersonsforthepurposesofthisreservation–includingentitiesholdingABSlicences–

shouldbeabletooffersimilarconfidenceintheirundertakingsthroughprofessionalobligations,indemnityinsuranceandcompensationfundarrangements,andregulatorsandlicensingauthoritieswouldneedtoassurethemselvesthatthisisthecase.

57Unlikebankdeposits,whereconsumersareabletosplittheircashamonganumberofbankstogaintheadvantagefromeachofdepositprotection,conveyancingtransactionscannotbesplit.Thedependenceofeachclientonthescopeandenforceabilityoftheirconveyancers’compensationarrangementsisthereforekeytoconsumerconfidence.

58Moreaccurately,perhaps,thebalanceistippedinfavourofregulation(ofsomekind)ratherthanreservation(inparticular):thereareotherregulatoryschemeswhichrequireparallelprotectionstothosefoundforlawyers(seetheCompensationAct2006,forexample)thatcouldbeappliedtotheregulationinthisarea.


Onthisview,(b)aboveappearstobeabetterfoundationforreservation.Toachievethesebroaderobjectives,oneapproachwouldbetoextendthecurrentreservationto:

(9) conveyancingservices.

Thesecouldbedefinedalongthe linesofsection11oftheAdministrationof JusticeAct1985:“thepreparationoftransfers,conveyances,contractsandotherdocumentsinconnectionwith,andotherservicesancillaryto,thedispositionoracquisitionofestatesorinterestsinland”,andwouldincludethegrantandassignmentofleases(otherthanshortleases).

As with court-related reserved instrument activities (cf. paragraph 6.2.1 above) and notarialactivities(cf.paragraph6.2.2above),giventhereasonsadvancedhereforapublicgoodjustificationfor the reservation of conveyancing services, there is a need to considerwithdrawing the currentexemption in paragraph 3(10) of Schedule 3 for individuals who carry out the relevant activitiesotherwisethanfororinexpectationofanyfee,gainorreward.Thereasonsforthereservationareconnectedtotheauthorisedstatusofsomeoneactingonanother’sbehalf:thesearenotachievedbysomeonewho is not authorised, and the absenceof rewarddoesnot seem to outweigh thepublicinterestintheneedforreservation. Thiswouldnot,ofcourse,preventsomeonewhoisauthorisedactingwithoutreward.

Theproperprotectionofpatents, trademarks,designsandcopyright in itself servesapublicgoodandconsumerprotectionfunction,inthatitoffersincentivesforinvention,innovation,researchanddevelopment(fortheeconomicbenefitofsociety)aswellasdiscouragingothersfrommisleadingthepublicandconsumersabouttheoriginsorqualityofprotectedproductsorservices. Thissuggeststhat

(10) intellectualpropertyactivities

shouldbeconsideredforreservation.Therearealreadystatutorydefinitionsthatcouldbeadoptedrelatingtopatentattorneywork(section275A(7)oftheCopyrights,DesignsandPatentsAct1988),trademarkagencywork(section83A(7)oftheTradeMarksAct1994)whichcouldformthebasisforfuturereservation.

6.3 Whatshouldberegulated:potentialconsumerprotectionreservations

Therearesomeaspectsof‘publicgood’reservationcoveredinparagraph6.2abovethatmightalsobe conceptualised as consumer protection reservation, often on the basis of the before-the-eventassurance provided for these ‘credence’ services. For example, rights of audience could also beincludedhere,onthebasisthattheyprotecttheclient’sphysical,personal,socialoreconomicwell-being(cf.paragraph5.5.1.1above). Similarly,advancingapublicgoodrationale inrelation torealestate transfers could lead to a broader reservation than we currently have, with consequentialconsumerprotectionbenefits(cf.paragraph6.2.3above).

I suggested at the beginning of paragraph 6.2 above that reservation justified by the public goodshouldbegrantedasamatterofprincipleandthatevidenceofactualorpotentialconsumerriskordetrimentshouldnotberequired.Regulationtoprovideconsumerprotectionisdifferent,andsuchevidenceshouldberequiredaspartofthejustificationforregulation.Evidencewillbeneededofthespecificrisksanddetriment,andtheimplicationsforconsumersofthoserisksordetrimentarising.This might include, for example, circumstances in which consumers are widely known to receiveincompetent or sub-standard advice and representation; where there are known to be providers


preying on vulnerable consumers, providing services where they are not required, or incombinationsoratpricesthattakeadvantageofthevulnerability;andwherethereareinstancesofprovidersabscondingwithconsumers’money.Inprobablyalloftheseinstances,‘roguetraders’willnotchoosetobringthemselveswithinanyself-regulatoryframework,andwillactivelyarrangetheirbusinesseseithertoavoidorignoremandatoryregulation.

If risk and detriment is known to exist and, in these and similar circumstances, consumers areoffered nomandatory alternativewhichwould allow them to check the authorisation of advisers,they are knowingly left to thedevices anddevianceof anunregulatedmarket. Thequestion thenbecomeswhether,asamatterofpublicinterest,therearesomelegalactivitiesthataresoimportanttoconsumers,ortheneedtoprotectthemsoevident, thattheyshouldnotbe left tomarket forcesand the general principle of ‘buyer beware’, or to the application of general consumer law andtradingstandardsprotection.

6.3.1 Willwriting

Despite recent proposals from the Legal Services Board, will writing is not presently reserved toauthorisedpersonsor, indeed, formallyregulatedatall–exceptwhenit iscarriedoutbysomeonewho is an authorised person in respect of a reserved activity and consequently regulated in theprovisionofallservicesbytheirapprovedregulator.

The Lord Chancellor’s recent unwillingness to take an early opportunity to reserve will-writingactivities canbe revisitedaspartof this review. Thereappears tobea strong case, supportedbyevidence,forreservationtoauthorisedpersonsbeingextendedto:

(11) thepreparationofawillorothertestamentaryinstrument;and

(12) thepreparationorlodgingofapowerofattorney.

Thisneednotnecessarilybebasedonbroadconsumerprotectionissues–suchaspressuresellingorcold calling, inappropriate bundling or pricing of services, misleading advertising, and the like –whichcanbecoveredbyotherapproachesandforwhichreservationcouldveryeasilybearguedtobeadisproportionateandunnecessaryresponse.Rather,reservationcouldbejustifiedonthebasisthat, as a result of unregulated provision, detriment to the consumer might be caused byincompetent, inadequate or biased advice or by an invalidwill or one that doesnot properly giveeffecttotheirintentions.

Consumer detriment might arise, for example, from: the adviser failing to address the taxconsequences of testamentary dispositions resulting in avoidable or higher-than-necessary taxliabilities to the estate; the adviser failing to consider the legitimate claims of some potentialbeneficiaries,resultinginpost-deathdisputesandcosttotheestate;ortheadviserfailingtoensureavalidexecution(when,forexample,theattestationiswitnessedbyabeneficiary). Giventhatmanyfailuresofadviceandrepresentationinthesecircumstanceswillonlycometolightwhentheclientshavediedandcanno longerarticulateor clarify their intentions,orexecuteavalidwill, after-the-event compensationwillhardlyever representanadequateor reasonable remedyandwill almostcertainlyinvolvetheestateinsomecostandinconvenience.

Although it would be possible to regulate against the inappropriate ‘bundling’ of estateadministrationintowill-writingengagements,reservationgivesrisetoanalternativeapproach. Bybringingwillwritingintoreservationtoauthorisedpersons,theprofessionalprinciplessetoutinthe


regulatory objectives and an approved regulator’s conduct rules would come into play (cf.paragraphs3.4.1and3.7above). Ratherthanregulatingseparatelyagainst inappropriatebundlingorcharging,authorisedpersonswhoprovidewill-writingandestateadministrationserviceswouldthenbeobligedtoshowthattheyhadactedinthebestinterestsoftheclientandcouldthereforebecalledontojustifytoaregulatoranybundlingofservicesorchargesmade.

Giventhatsuchanissueisonlylikelytoariseafterthetestator’sdeath,therewillalwaysneedtobeanelementofretrospectiveremedy.Theadvantageofreservationwouldbetoprovidesomebefore-the-event assurance to the testator that such inappropriate action is less likely with regulatedprovidersandthathisorherexecutorsandbeneficiarieswouldhavesomerecourse.

Finally,inthepublicinterestofparityoftreatmentwithintheUnitedKingdom,thepowerinScotlandto regulate will writing (see the Legal Services (Scotland) Act 2010, Part 3, Chapter 2) arguablystrengthensthecaseforreservationinEnglandandWales.

Itwouldseemsensiblefortestatorstobeabletodrawuptheirownwills59,andforanexemptiontocontinueforindividualsactingotherwisethanfororinexpectationofafee,gainorreward60. Asareservation for consumerprotection, consumers should perhapsbe allowed tomake a free choicewhetherornottogainthebenefitofprotectionbyinstructinganauthorisedperson.

6.3.2 Probateandtheadministrationofestates

The current reservation of the preparation of papers for the grant of probate or letters ofadministrationisinmyviewthemostcontentiousofthecurrentreservationsandsomoredifficulttojustify.Aswithreservedinstrumentactivitiesinrelationtothetransferofrealestate,Iconcludethatthecurrentreservationisinappropriatelydrawn.

I can see no reasonbased onpublic good for reserving simply the preparation of probate papers.Under the current reservation, theonlypartof theentireprocessofdealingwithanestate that isreservedtoauthorisedpersonsispreparingpapersonwhichtofoundoropposeagrantofprobateoroflettersofadministration61.Buttherearenumeroustasksandprocessesthatmustbecompletedduringtheadministrationofanestate.Amongsttheseareactivitiesthatappearmoreobviouslyopentoabusethanthatwhichisreserved,suchascollectingtheassetsduetotheestate,releasingmoniesto pay any debts or make distributions, or preparing the estate accounts. From a consumerprotection viewpoint, it is difficult to account for these steps in the probate process not beingreserved to authorised persons, while the preparation of papers to apply for a grant ofrepresentationis.

Althoughproblemsmightariseinrelationtocontentiousprobate,orestatesinvolvingforeignassets,it is questionable whether these, by themselves, represent a strong enough argument to supportreservation. In these circumstances, a sensible executor or administrator would probably seekprofessionaladvice.Thestrongestreasonforanyprobatereservationthereforeappearstolieinthe

59Inthiscontext,therewouldnotseemtobeanyreasontoregardas“preparation”forthepurposesofthisreservationany

off-the-shelfwilltemplates(whetherpaper-basedoronline)thatarecompletedwhollybythetestatorwithnointeractionoradvice(otherthananyofferedbyindividualswithoutreward).

60Arguably,thisexemptionshouldnotbeavailabletothosewhoofferfreewillwritinginexpectationofbeingappointedasexecutor:suchbundlingseemstoimplythatthewilliswritteninsomeexpectationoffuturereward.

61InotethattheequivalentScottishprocessof‘confirmationservices’issimilarlynarrowlydrawn:cf.LegalServices(Scotland)Act,s.90(2).


protectionof theestate’s assets frommaladministrationormisappropriationby someonecarryingoutestateadministrationforreward.Itwouldbeaconsumerprotectionjustification.

Inotewithinterestthatthe‘administration’ofaninsolventcompany’s‘estate’isaregulated(thoughnotcurrentlyreserved)activity(cf.paragraph6.3.3below):toregulatethiswhilenotregulatingtheadministrationofadeceasedperson’sestateseemsillogical. Theriskstotheassetsinthehandsofthose who are not suitably qualified or regulated are arguably no different. The equivalence ofprocesses, aswell as the public interest in the efficiency of these State-authorised collections anddispositions of property, coupled with consumer protection for creditors and beneficiaries, couldprovideastrongbaseforcomparableregulationinbothcases.

Interestingly, if part of the rationale for reservation is the benefit of compensation fundarrangements that arise from being an authorised person, this might inhibit the authorisation ofchartered accountants, forwhom there are no such arrangements (even though the ICAEW is thelargestlicensingauthorityofinsolvencypractitioners,whoalsocollectassets).

Aswithreservedinstrumentactivities,therefore,myconclusionisthatthecurrentreservationistoonarrow.Inthepublicinterestofconsumerprotection,considerationshouldbegiventowhether

(13) thepreparationofpapersonwhichtofoundoropposeagrantofprobateorlettersofadministration;and

(14) theadministrationofanestatefollowingagrantofprobateorlettersofadministration

need tobe reserved legalactivities. Arguably, anycase for reservation isweakenedby insolvencypracticebeingregulatedratherthanreserved;butthiswouldnotweakenthecaseforregulation,butratherputtheemphasisonthechoiceofregulatoryapproach.Iwouldarguethatthepublicinterestrequiresrelativeparityofregulationandprotection,evenifthechoiceofapproachisnotidentical.

Inthecaseofsimpleestates,administrationbyauthorisedpersonswouldoftennotberequired. Ifregulation is introduced, it would therefore be sensible to continue to allow executors andadministratorstocarryouttherelevantactivitiesthemselves,andtherewouldalsobeacaseforanexemptionforindividualsadministeringestatesotherwisethanfororinexpectationofafee,gainorreward.

6.3.3 Insolvencypractice

Insolvencypracticeiscurrentlyaregulated,butnotareserved,activity.Itisanoffencetoactasaninsolvency office-holder without being authorised as an insolvency practitioner. Acting as aninsolvency office-holder includes acting as a liquidator, administrator or administrative receiver,trusteeofapartnership,trusteeinbankruptcyorunderadeedofarrangementorinasequestration,administrator of a deceased insolvent estate, or as a nominee or supervisor of voluntaryarrangement.

Authorisation is given by a recognised professional body, or by the Department for Business,InnovationandSkills(throughtheInsolvencyServiceasanexecutiveagency,whichalsoactsastheoversight regulator for insolvency practice). The Insolvency Act 1986 applies across the UK; forEnglandandWales,therelevantrecognisedprofessionalbodiesare:theLawSocietyofEnglandandWales, the Institute of Chartered Accountants of England andWales, the Insolvency PractitionersAssociationandtheAssociationofCharteredCertifiedAccountants.


Atonelevel,itisdifficulttoseewhythedistributionofassetsofa‘deceased’companyorbusiness,orofanindividualinfinancialdistress,shouldberegulatedwhentheestateofadeceasedhumanbeingisnot (unless thedeceasedwas insolvent). Thepotentialmischief thatcould justifyreservation inrelationtotheadministrationofestates,andthebenefitstobederivedfromreservation,couldapplywithequalforcetoinsolvencypractice.Thereareassetstobecollectedanddistributed,thevalueofthe‘estate’tobepreserved,theriskofassetsbeingmisappropriated,andthepotentialclaimsofthe‘beneficiaries’tobemet62.

Astrongcaseforreservationof

(15) insolvencyactivities

(as carried out by persons acting as insolvency practitioners under the Insolvency Act 1986)thereforecouldarisefromitscurrentregulationandsimilaritytootherreservedactivities.Althoughin one sense, the extension is not necessary to achieve the benefits of regulation since insolvencypractice is already regulated, nevertheless as part of a regulatory ‘tidying up’ and principled re-definitionofreservedlegalactivities,thiswouldbealogicalinclusionandworthyofconsideration.

6.3.4 Claimsmanagementservices

AlthoughthepreviousGovernmentexpressedaninitial intentiontoaddclaimsmanagementtothelist of reserved activities63, this additionwas not included in the Legal Services Act 2007. ClaimsmanagementservicescanonlybeprovidedbythosewhoareauthorisedundertheCompensationAct2006 or who are exempt. There are exemptions, for example, for lawyers, those subject to FSAregulation,charitiesandnot-for-profitadviceagencies,unions,andindividualswhoarenotactingforreward.

The range of claims covered by the Compensation Act 2006 is broad and includes claims for:personal and criminal injuries; industrial injuries disablement benefits; employment-relatedpayments, wrongful or unfair dismissal, redundancy, discrimination and harassment; housingdisrepair; and in relation to financial products or services (paragraph 4(3) of the Compensation(RegulatedClaimsManagementServices)Order2006SINo.3319).

Insection4(2)oftheCompensationAct2006,‘claimsmanagementservices’aredefinedas“adviceorotherservicesinrelationtothemakingofaclaim”forcompensation,restitution,repaymentofotherremedy or relief, whether the claim can be made in legal proceedings or under a compulsory orvoluntary scheme. This is elaborated in paragraph 4(2) of the Compensation (Regulated ClaimsManagement Services) Order 2006 to mean advertising for or otherwise seeking out claimants,advising claimants or potential claimants,making referrals, investigating claims, and representingclaimants.

Thiswillmean that some claimsmanagement serviceswouldqualify as ‘legal activities’ under theLegal ServicesAct and somewouldnot. Given that reservation canonlypresentlybe extended toactivitiesthatare legalactivities,claimsmanagementserviceswouldnotpresentastraightforward

62Oneprincipaldifferencecouldbethatexecutorsandadministratorsofestatescollectthedeceased’sassetsanddistribute

themtobeneficiariesinaccordancewithawillortherulesofintestacy;insolvencypractitionersnotonlycollectanddistributeassets,butalsohavetoapportionthemamongcreditor‘beneficiaries’whenthereisnotenoughavailablefordistributiontosatisfytheirlegitimateclaims.

63DepartmentforConstitutionalAffairs(2005)TheFutureofLegalServices:PuttingConsumersFirst,Cm.6679,AppendixB,Section7.


caseunder thecurrent regulatory framework for legal services. However, thereareelements thatare definitely legal activities (namely, “advising a claimant or potential claimant in relation to hisclaim or cause of action” and “representation of a claimant (whether in writing or orally, andregardlessofthetribunal,bodyorpersontoorbeforewhichorwhomtherepresentationismade)”:paragraphs4(2)(b)and(e)respectivelyofthe2006Order).

TherewasclearlyaParliamentarywishtoregulateclaimsmanagementactivities–andparticularlythe claims-farming, referral and investigation elements where there was previous evidence ofmalpractice by unregulated businesses. However, this has, in the process, been extended toincorporatetheprovisionoflegaladviceandrepresentation. Asaresult,authorisedpersonsundertheCompensationAct(whoneednotbelawyersbutwhoareneverthelesssubjecttosatisfyingtheregulator that they are competent and suitable to provide regulated claimsmanagement services)areabletoprovidelegaladviceandrepresentationunderaparallelregulatoryframework.

ThepurposebehindtheCompensationActwouldclearlysatisfyaconsumerprotectionrationaleforpublic interestreservation. Thetotalityofclaimsmanagementservicesasdefinedunder the2006Act do not currently qualify as ‘legal activities’ under the Legal Services Act 2007, and could notthereforebecomereservedasapackageofadviceandserviceswithinthe2007Act.Further,ifsomeclaimsmanagement activities remained subject to the regulatory regimeof theCompensationAct,while the legal activities elements became reserved under the Legal Services Act, there wouldpotentially be a need for some businesses to apply to different regulators in order to continueprovidingthesamerangeofservicesasnow.

With a broader review and simplification of the statutory basis for regulating legal activities, andcloselyrelatedorincorporatedservices,theremightnowbeanopportunityforachievingtheoriginalintentionof bringing claimsmanagement serviceswithin the same regulatory framework as otherlegal services. Reservationcouldremove theparallel framework inrespectofclaimsmanagementactivities.

Thissuggeststhatconsiderationshouldbegiventodeterminewhetheratleast

(16) claimsmanagementadviceandrepresentation

shouldnowbecomeareservedlegalactivity(definedforthispurposeasinthe2006Order).Theseactivitiesaresocloselyconnectedto–ifnotalreadypartof–therightsofaudienceandconductoflitigationactivitiesconsideredearlier(cf.paragraph6.1.1above)thatthereisastrongargumentfortreating them in the sameway. Alternatively, consideration could be given to bringing all claimsmanagement services currently covered by the Compensation Act 2006 within the legal servicesframework.

6.4 Whatshouldberegulated:regulationofnon-reservedlegalactivities

TheLegalServicesActcontains insection12(3)adefinitionof ‘legalactivity’which– ignoringanyreservedlegalactivity–iseitherorbothof:

(i) theprovisionoflegaladviceorassistanceinconnectionwiththeapplicationofthelaworwithanyformofresolutionoflegaldisputes;

(ii) theprovisionof representation inconnectionwithanymatterconcerning theapplicationofthelaworanyformofresolutionoflegaldisputes.


Judicial,quasi-judicialandmediationactivitiesareexcluded(section12(4)).

If reservation remains the principal approach to providing regulation of legal activitieswhere thepublic interest requires their direct regulation and performance by authorised persons, then thedefinitionaboveprovidesabasisforregulationofnon-reservedactivities.Reservationcanaddressboth before-the-event and after-the-event solutions in relation to themost critical legal activities.Forotherlegalactivities,after-the-eventremediesandredressarelikelytobesufficient.

The current regulatory gap (cf. paragraph 2.2 above) excludes many legal services from suchpossibilityofremedyorredressunlesstheyhappentobeprovidedbyotherwiseauthorisedpersons.A relatively simple extension of the Legal Ombudsman’s jurisdiction to allow any client or otherpersonaffectedbytheprovisionofanylegalactivity(asdefinedabove,andincludingreservedlegalactivities)toreferacomplainttotheOmbudsmanwheretheactivityhasbeenprovidedeitherbyanauthorisedpersonorfor,orinexpectationof,anyfee,gainorreward.

Such an approach could achieve two objectives. First, it would match expectation and scope (cf.paragraph4.3.3above)andconsequentlygenerategreaterconfidenceinlegalservices(cf.paragraph4.3.4above).Second,itwouldallowOmbudsman’sremedyorredressinrespectofalllegalservices,regardless of who provided them. The Ombudsman’s powers could be different in relation toauthorisedpersonswhere the complaint relates to a reserved activity, orwhere thenon-reservedlegal activity in question is providedby a personwho is otherwise regulated (for example,wherenon-contentioustaxadvice isprovidedbyamemberoftheCharteredInstituteofAccountants). Inaddition, although the professional principles (cf. paragraphs 3.4.1 and37 above) applymainly toauthorisedpersons, inreachingadeterminationonacomplaintagainstaproviderofnon-reservedlegal activities who is not an authorised person, the Ombudsman should be able to take thoseprinciplesintoaccountasthoughtheproviderwereanauthorisedperson.

Iacceptthatthefundingofsuchabroaderapproachwouldneedtobeconsideredcarefully,thoughtthe relative informality of ombudsmen schemes should keep costs lower than formal regulation.Withnoauthorisationbeing implicit inmysuggestion for theregulationofnon-reservedactivities,but with consumer access to the Legal Ombudsman being available without the need for non-authorised providers of non-reserved activities to submit to a voluntary scheme, some variant of‘polluterpays’,withdiscretionfortheOmbudsmantoawardcostscompensationagainstafrivolousorvexatiouscomplainant,mightofferawayforward.

Inthesamewaythatanauthorisedpersoncanlosetheirlicencetopractise,considerationcouldbegiven to the Legal Services Board (or any future successor, or theMinistry) having the power todeterminethatanyindividualorentityshouldbeprohibitedfromprovidingoneormore(orindeedall) legal activities because of conduct meriting such an outcome – whether the provider waspreviouslyanauthorisedpersonornot.ThiscouldbereinforcedbytheBoardmaintainingapublicregister of such prohibited providers of legal services – including thosewho lose or are denied alicencetopractisebydecisionofanapprovedregulator.Therecould,ifthoughtnecessary,beanewoffenceofprovidinglegalactivitiesforrewardwhileontheprohibitedregister.

Inthisway,adistinctioncouldbedrawnbetweenreservedlegalactivities(whichmustbeprovidedby authorised persons) and other regulated legal activities (which could all be within the LegalOmbudsman’sjurisdiction,irrespectiveofproviderorvoluntarysubmissiontothatjurisdiction).


6.5 Whoshouldberegulated

Aconsequenceoftheapproachsuggestedinparagraph6.4abovewouldbethatallprovidersof‘legalactivities’, as defined,would in someway be regulated. If any legal activity is reserved, then therelevantprovider (individualorentity)wouldstillneed tobeanauthorisedperson, subject to thesamerangeofrequirements,obligationsandsanctionsasnow.

Ifalegalactivitysatisfiesapublicinteresttestforreservation,thenthecurrentoffencesinsections14and17oftheLegalServicesActrelatingtocarryingonareservedactivityifnotentitledtodosoand pretending to be entitled should be sufficient without the need for further specific offencesrelatingtothewrongfuluseofthetitlesofsolicitorandbarrister.

6.6 Howtheyshouldberegulated

The emphasis of the regulatory framework in the future could be more definitely activity-based.Fromthepointofviewofpublicconfidenceandconsumerprotection,regulatingwhat isdoneistomymindmore important thanwho does it (given that the same activity can be carried out by anindividual, by an entity, by someonewhohas aprofessionalqualification and title, orby someonewhodoesnot).Regulationbyactivityallowsfocusandconsistencyofregulation,aswellasdifferentconsequences to be attached to different activities – leading tomore targeted, proportionate andrisk-basedsolutions.

Professional bodies could continue to award titles and determine training and accreditationrequirements. Save in relation to reserved legal activities (where regulatory requirementswouldremain subject to approvalby theLSB, or its successor), therewouldbenomandatory regulatoryrequirements, nor any need for statutory protection of any titles awarded. While theremight beadditional requirements attaching to professional qualification in respect of non-reserved legalactivities, these would be a matter for individual judgement of the competitive benefit of suchqualification and any additional protection voluntarily offered to clients. These consequences inrespectofnon-reservedactivitiesneednolongerbeinevitablyattachedtoauthorisationinrespectofreservedactivities.

6.7 Bywhomtheyshouldberegulated

Regulationprincipallybyactivityalsoleadstothepossibilityofspecialistregulators,andraisesthethornyquestionofwhetherdifferentregulatorsshouldbeable toauthorise in respectof thesamereservedactivity.

Reducingthecomplexityandoverlapwithinthecurrentregulatoryframeworksuggeststhatseriousconsideration should be given to each reserved activity being authorised by only one approvedregulator. Competition among providers is a legitimate public interest goal; competition amongregulatorsislesseasytojustify,giventhatconsistencyofapproachandenforcement,aswellascost-efficiency,arethenmoredifficulttoachieve.

Withsomereservedactivities, suchsingularityofauthorisationwouldbeeasy toachieve (notarialactivities can already only be authorised by a single approved regulator). True separation ofregulation and representation would ease this process, but with other more common reservedactivities – such as conveyancing, will writing and estate administration – challenges would be


presented. Thismightpointtowardsasingleregulator(aLegalServicesAuthority),withspecialistsectionsforeachreservedactivity. Compositereservedactivities,suchasrightsofaudienceortherighttoconductlitigation,neednotbeauthorisedonacompositebasis.Instead,specificrightscouldbeauthorisedseparately,suchasrightstoappear inthehighercourts,or inpatentandtrademarkmatters.

Greaterconsistencyinpolicyandimplementation,aswellasimprovedcost-efficiency,inregulationmightbeachievedthroughasinglelegalservicesregulator.Thiswouldrepresentalong-termgoal,with a significant transitional role for the Legal Services Board. Alternatively, if the currentmultiplicity of approved regulators remains, the oversight role of the Board should, in my view,remain in place. This would provide assurance of consistency in regulatory policy andimplementation across legal services. However, there is an additional need to address the cost-efficiencyof legalservicesregulation,giventhat themultiplicity–andthedisparity inthesizeandactivities – of the current approved regulators results in fragmented and duplicated resourcing ofregulationacrosstherangeofregulatedactivities.ItcouldbeworthexploringwhetherthismightbeachievedbyextendingtheremitoftheLegalServicesBoardorthrough,say,establishingacounciloflegal services regulators,whichcouldachieveacriticalmassof regulatorysupportacrossmultipleapprovedregulators,leadingtoscaleeconomiesthroughco-locationofresourcesandpersonnel,andtheuseofcommontechnologyandprocesses.


6.8 Summary

Apossiblenewapproachtolegalservicesregulationcouldbesummarisedasfollows:

StephenMayson

1September2013

[email protected]

PublicgoodreservationsWouldrequireauthorisation(individualorABS)for,say:*rightsofaudience*conductoflitigation*court-relatedreservedinstruments*lawcostsactivities*administrationofoaths*notarialactivities*immigrationadviceandservices*publiclawadviceandservices*conveyancingservices*intellectualpropertyactivitiesAuthorisationtobeprovidedbyspecialistapprovedregulatorsforeachreservedactivityProvidesbefore-the-eventassuranceandafter-the-eventredress

ConsumerprotectionreservationsRequiresauthorisation(individualorABS)for,say:*preparingawillorothertestamentaryinstrument*preparing/lodgingpowerofattorney*probateactivities*administrationofestates*insolvencypractice*claimsmanagementadviceandrepresentationAuthorisationtobeprovidedbyspecialistapprovedregulatorsforeachreservedactivityProvidesbefore-the-eventassuranceandafter-the-eventredress

LegalactivitiesregulationIncludesall'legalactivities',asdeuined,butrequiresnopriorauthorisationotherthanforreservedactivitiesAlllegalactivitiessubjecttothejurisdictionoftheLegalOmbudsmanLeOcanreferauthorisedandotherwiseregulatedpersonstotheirapprovedregulatorfordisciplinarymatters,andallproviderstotheLSB/MoJforaddingtoregisterofprohibitedproviders


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