30 May 2007FICPI Loch Lomond1 The UK Legal Services Bill fred Tim Roberts © 2007

30 May 2007 FICPI Loch Lomond 1

The UK Legal Services Billfred

Tim Roberts© 2007


Subtitle

“I'm from the LSB, and I'm here to help you!”


Bill – vital statistics

123 Pages203 Clauses

24 Schedules (totalling 212 pages)

Never mind the quality, feel the width...


Why, What and How?

• Why a Legal Services Bill? What does it seek to do?

– and to and for whom?• What does it say? How will it work? (if

– Self- regulation – complaints - ABSs

• Who will pay?• What will it mean to the rest of the world?


Why a Legal Services Bill?• “The British legal system is the envy of the world”

(1st popular myth)

•“But it's fuddy-duddy and out-of-date”• (2nd popular myth)

• “There are far too many complaints about lawyers, and they're not dealt with fairly”• “We can fix this by legislation!”


Objectives

A better deal for 'consumers' - through:A fair, rational, effective and uniform system for regulating lawyers

By supervised self-regulationAn efficient and independent complaints systemMore competition – by liberalising rules


From the bill...The Regulatory Objectives (S1)

a) The rule of lawb) Access to justicec) Interests of consumersd) Competitione) Independent strong diverse effective professionf) Public understanding of rights and dutiesg) The 'professional principles' ANDh) The public interest


The Professional Principles

“Authorised persons” should: • Act with independence, integrity and in client's best interests;• Maintain work standardsPersons exercising a right of audience have a duty to the Court to act independently in interests of justiceClients' affairs must be kept confidential


Authorised person?

...is someone authorised to carry out reserved legal activities

And 'reserved legal activities' are...? (s12.1)• Exercising a right of audience• Conducting litigation• Reserved instrument activities (drafting deeds)• Notarial and probate activities• Administering oaths


Who gets regulated?All 'lawyers'... More specifically:

Barristers; Solicitors; Legal executives; Notaries; Licensed conveyancers; Commissioners for Oaths; Immigration advisers (see also Schedules 1- 24)

ANDRegistered patent and trademark attorneys


How will it work?

By supervised self-regulationExisting professional bodies will be appointed

as Front-line Regulators (FLRs)(the Law Society, the Bar Council, CIPA, ITMA...)

FLRs will be overseen by a Legal Services Board (LSB)


Legal Services Board (LSB)

Makes rules for FLRsMust promote the 'regulatory objectives'

Regulation to be 'transparent, accountable, proportionate, consistent'

- and'targeted only at those cases where action is needed'

To have a Consumer Panel – but no Professional Panel

LSB is Regulator of Last Resort


“Approved regulators” (FLRs)

(such as the Law Society, CIPA, etc)

How do you regulate yourself?By separating regulatory and representative

functions“regulatory decisions to be taken as far as as far as possible independentlypossible independently of representative..”

The LSB may not interfere with representationrepresentation


Please explain...• What is 'representation' and what is 'regulation'? Can they be completely separated? Is there anything else?• How independently?

– Different premises?– Different staff?– Different members?– Can 'reps' set policy?


'Regulatory arrangements' (S20)

Arrangements for: Authorising people to carry on reserved legal activities; for indemnification; for compensation;Rules for: practice; conduct; licensing; qualifying (exams);Any other arrangements not made “to represent or promote the interests of persons regulated.. ”


CIPA and ITMAThe Bill appoints both Institutes as FLRsHow will they operate? Extra expense..

Aim: Two FLRs that beat as one! Formally distinct, practically (almost?) identical...

- Common rules- Common membership- Common support- A single practice fee?

How will 'the FLR' relate to the two Institutes?


ComplaintsShould be most efficiently dealt with by the

relevant FLR?This theory disproved by the Law Society

So – FLRs allowed no role in complaints at allAll 'authorised persons' must have complaints

procedureNew “Office of Legal Complaints” (OLC) will

hear all unresolved complaintsLawyer will pay, regardless of finding


ABSs – 'Walmart law'

cAlternative Business StructuresPromoting competition – too many

inhibiting professional rules Cautious partial liberalisation


Licensing of ABSs

Bodies may be licensed to perform reserved legal activities (and other

activities)By the LSB or an approved FLR

Registers of licensed bodies


ABSs must have...

• A Head of Legal Practice– who makes sure the body keeps the legal rules – and reports if it doesn't

• A Head of Finance and Admin– who makes sure the body keeps the accounting rules (and reports if it doesn't)


Ownership of ABSs

(Part-)Owners who are not 'authorised persons' are subject to approval (Sch 13)

Must be 'fit and proper person'; not compromise 'regulatory objectives'OLS will make rules (about probity,

financial position, associates, etc, etc)


Time-line

Passed through House of LordsGoes to Commons in early June

Royal Assent end July (???)Appointments start with Royal Assent

LSB opens for business Spring 2010 (?)OLC opens for business Summer 2010 (?)


Who pays? (and how much?)The legal professions pay- on behalf of their users

- both for FLR (internal) and LSB/OLC (external )

Government will not contribute either to start-up or running costs

Registration fee (now $150) may go to $1500 - $2000

Separate fee for bodies


How will life change?

Two views:

PolyannasCassandras


Polyannas say:

More regulation is a good thing – must encourage higher standards

New bodies will act sensibly and proportionatelyThe new complaints procedure will save effort

The estimated costs are maxima, and anyway not unreasonable - 'rebalancing'

ABSs are a definite advantageWhy all the fuss?


Cassandras say:– The nature of the profession will change - we're losing control of our affairs

– We can't even ensure our independent FLR will act sensibly, let alone the LSB or OLC

– Attorneys don't need to register– The fewer people register, the more the

costs will escalate and fewer still will register

– The complaints system is crazy, as the OLC knows nothing about our business

– ABS regulations will impose extra burdens on existing firms


Who is right?

Time will tell...Some existing attorneys will surely deregister -

(sole practitioners – industry employees)Perhaps not enough to undermine the system

EPAs can practice with minimum of regulation'Professional privilege' may be decisive


What will it mean to the rest of the world?

A more highly regulated UK profession- may be good or bad

Lower costs – because of competition?Higher costs – because of over-regulation?

(effects might spread)Commercial opportunities from ABSs?

Lower CIPA membership fees?

Documents

30 May 2007FICPI Loch Lomond1 The UK Legal Services Bill fred Tim Roberts © 2007