Review of the PCF approval process, including a targeted review of the regulators’ approach to the non-regulatory permitted purposes (‘the review’)
Why are we undertaking this review?
As an oversight regulator, each year the LSB must assess the Approved Regulators’ (AR’s) applications under section 51 of the Legal Services Act 2007, for the approval of their respective PCF. Section 51(2) stipulates that an AR may only apply amounts raised by PCF for one or more of the permitted purposes listed in section 51(4).
Our process for assessing PCF applications remains largely unchanged since it was first introduced in 2011. In this time, the LSB’s overall approach to regulation has evolved significantly. We consider the review to be an opportunity to create a shared understanding of the purpose, benefits and costs of regulation, on the basis that a better appreciation of those issues ought to lead to improved standards across the sector.
We also intend the review to be an opportunity to see where transparency might be improved, to allow those that pay the PCF to drive accountability for the expenditure of PCF income and to inform the LSB’s oversight responsibilities.
How will we do this?
In preparation for the review, we have assessed all PCF applications for 2018/19 and 2019/2020 with the purpose of identifying themes, to inform the development of some initial working proposals. We will discuss these themes and initial working proposals with approved regulators (‘ARs’) and regulatory bodies (RBs) and specific areas where our understanding could be improved. The first round of discussion will commence in February.
The proposals and an analysis of all subsequent contributions and discussions with ARs and RBs will inform the proposed revisions to the current LSB’s Practising Fee Rules 2016 (‘Rules’) and Guidance to Approved Regulators (ARs) on Practising Certificate Fee (PCF) applications (‘Guidance’), which we will consult on in June 2020. We intend to implement the final Rules and Guidance in November 2020 ahead of the 2021 PCF cycle.
- Bilateral meetings with participating approved regulators and regulatory bodies
- Working group meetings with participating approved regulators and regulatory bodies
- Publication of workshop materials on the LSB website
- Analysis and assessment of stakeholder views.
- Final policy position paper to be developed informed by stakeholder analysis and additional evidence gathered.
- Soft consultation on final policy positions reached.
- Publication of consultation on revisions to LSB rules and guidance. Consultation to run for 12 weeks.
- Consideration and analysis of all consultation responses.
- Publication of an updated final LSB Rules, guidance, summary of responses and analysis of consultation responses.