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’ applications under section 51 of the Legal Services Act 2007, for the approval of their respective PCF. Section 51(2) stipulates that an approved regulator 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.
What have we done so far?
In preparation for the review, we assessed all PCF applications for 2018/19 and 2019/20 and identified key themes, these themes underpinned and informed our development of some initial working proposals.
In February 2020, we commenced the first round of our engagement with the approved regulators and regulatory bodies on our seven key themes and initial working proposals. We heard a variety of interesting perspectives from stakeholders representing smaller regulators, larger regulators and representative bodies. We listened to this feedback and engaged further with these stakeholders over two workshops held on 27 March 2020 and 30 March 2020. We have published the PCF workshop slides which guided our discussions. Further analysis of contributions from stakeholders is now underway and we are working on refining our proposals.
What do we plan to do next?
We will consult on proposed revisions to the current LSB Practising Fee Rules 2016 (‘Rules’) and Guidance to Approved Regulators (ARs) on Practising Certificate Fee (PCF) applications (‘Guidance’) in July 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.
We will be keeping the timetable under review in consideration of the impact from COVID-19.