Developing regulatory standards

The system of oversight regulation created by the Legal Services Act 2007 relies on the LSB ensuring that the overall system of rules and enforcement in the legal services sector functions effectively. Most direct interventions will be driven by the approved regulators in regulating practitioners in their specific part of the market. However, changes to their rules – as well as changes to the range of regulators in the sector – need to be approved by the LSB.

The following sets out the specific role played by the LSB in overseeing the system:

Ensuring regulatory standards

In order to ensure a consistent approach to delivering our oversight role, we have developed a proposed approach to assessing whether the approved regulators are acting in accordance with the Regulatory Objectives and the Better Regulation Principles. Important considerations, such as the appropriateness of their interventions, ensuring effective enforcement and acting out an outcomes-focused approach, will all be priorities. The details of this are currently being consulted upon.

Approving changes to rules

The LSB will consider rule-change applications from the approved regulators – publishing our decisions on approval and the reasoning. We will assess such applications against the Regulatory Objectives and the Better Regulation Principles. Our analysis of each of these applications feeds into our wider work on developing strategy and understanding conditions in the market.

Designating new approved regulators

It is open to bodies to apply to the LSB to be designated as a new approved regulator in the legal services sector. A process has been designed to make sure that we are satisfied of the competency and capacity of the applicant body before making a recommendation to the Lord Chancellor that they become an approved regulator.

Thematic reviews

We will also undertake thematic reviews to scrutinise areas that appear to present regulatory risk. Examples of work planned in this area for 2011/12 include appeal mechanisms, immigration advice and the workings of the conveyancing market. We have already published the results of an investigation into the most appropriate way to regulate referral fees, as well as another enquiry into the capacity and operations of the smaller approved regulators.
To find out more about this work please contact Regulatory Project Manager on 020 7271 0063.