The Legal Service Board has today published a consultation on its internal governance rules (IGR) for the legal services regulators.
Neil Buckley, Chief Executive of the Legal Services Board said:
“Independent regulation gives confidence to consumers, providers, investors and society as a whole that legal services work in the public interest and support the rule of law.
The Legal Services Act 2007 (the Act) does not create a framework in which all approved regulators (AR) are structurally separate from representative bodies, and does not permit the LSB to require this. Instead, the LSB must make rules that apply to regulators in the sector.
Putting in place IGR was one of the LSB’s first priorities on being established. Since then, we have seen a number of disagreements about independence matters from a range of different ARs and regulatory bodies. We have also heard suggestions on how regulatory independence is best achieved, including through changes to the IGR.
The LSB’s view is that regulation should ideally be structurally, legally and culturally independent of the professions and government. A review of the legislative framework by government for the regulation of legal services, however, is unlikely for the time being.
We are, therefore, interested to understand stakeholders’ experiences of operating under the current IGR, including whether the IGR might be improved within the constraints of the Act and, if so, how.”
For further information, please contact the LSB’s Communications Manager, Vincent McGovern (020 7271 0068).
Notes for editors:
1. The Legal Services Board (LSB) is required by the Legal Services Act 2007 (the Act) to make the IGR for the legal services regulators. These rules set out requirements that approved regulators must meet to ensure the independent exercise of their regulatory functions. In light of our experience and developments in the legal services sector, this consultation explores whether changes are now needed to the IGR to enhance regulatory independence.
2. This consultation 1) explains that the evidence we have obtained to date suggests there are issues with the current IGR, 2) explores options to help us develop our thinking on the future of the IGR, and 3) sets out some initial thoughts on how the LSB might gain assurance going forward on compliance by approved regulators with the IGR.
3. This internal governance rules consultation will close at 5pm on 9 February 2018. Full information about it and the consultation document itself can be found here.
4. 4. The LSB will be holding a stakeholder event to discuss this consultation on Wednesday 29 November 2017, at 2pm at our offices (One Kemble Street, London, WC2B 4AN). If you would like to attend please email Craig Wakeford.
5. A timeline of the evolution of the IGR, including LSB consultations and response documents, can be found in Annex C of the consultation.
6. This review is part of the performance, evaluation and oversight strand of our work programme for 2017/18, the final year of our current three-year strategy.
7. The IGR have not been reviewed in full since they were first introduced in 2010. A partial review – in relation to appointments and chairing arrangements – took place and amendments were subsequently made in 2014.
8. The LSB (in its ‘Vision for legislative reform of the regulatory framework’ 2016), the Competition and Markets Authority ( in the Legal Services Market Study final report 2016) and HM Treasury (in 2015) have called previously for a review of the legislative framework for the regulation of legal services, with a view to increasing regulatory independence. However, this appears unlikely for the time being.
9. This review is in keeping with the more recent recommendation of the Ministry of Justice, following its tailored review of the LSB, that ‘…the LSB should use all of its powers to provide robust assurance on the separation of the frontline regulators from the representative interests of the Approved Regulators, including the use of its investigative powers where appropriate. Any changes, including those as a result of the review of internal governance rules, should be made within the existing legal framework.’
10. The Legal Services Act 2007 (the Act) created the LSB as a new regulator with responsibility for overseeing the regulation of legal services in England and Wales. The new regulatory regime became active on 1 January 2010.
11. The LSB oversees nine approved regulators, which in turn regulate individual legal practitioners. The approved regulators, designated under Part 1 of Schedule 4 of the 2007 Act, are the Law Society, the General Council of the Bar, the Master of the Faculties, the Chartered Institute of Legal Executives, the Council for Licensed Conveyancers, the Chartered Institute of Patent Attorneys, the Chartered Institute of Trade Mark Attorneys and the Association of Costs Lawyers. They have subsequently being joined as an approved regulator by the Institute of Chartered Accountants in England and Wales.
In addition, the Institute of Chartered Accountants of Scotland and the Association of Chartered Certified Accountants are listed as approved regulators in relation only to reserved probate activities.
12. As at 1 April 2017, the legal profession in England and Wales comprised 148,690 solicitors, 15,281 barristers, 6,809 chartered legal executives and 5,958 other individuals operating in other areas of the legal profession such as conveyancing. The UK legal sector turnover was £31 billion per annum (2016) which is up 19% in cash terms since 2012. For more information see here.