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Those keen to embrace the Legal Services Act are being let down

The Council for Licensed Conveyancers (CLC) might be forgiven for feelings of mild annoyance towards the Legal Services Board following the latter’s rejection of the CLC’s application to regulate advocacy and litigation services. We are told that the reason for the rejection – after a year of consideration and despite support from both the OFT and the Legal Services Consumer Panel – is, in essence, that the CLC does not have power to make the application!

The LSB’s decision notice was reasonably helpful, explaining its need to obtain specialist advice and its reasons for the decision in some detail. The CLC has publically stated that it is content that the door has not been closed on a renewed application once the various issues have been addressed. It is interesting though that the LSB took over a year to reach its decision despite the general issue on which the decision was pinned – a legal technicality – being flagged in the application itself. One might wonder at a bureaucracy that fails to weed out an application which is apparently technically flawed before a full-scale statutory consultation process has been undertaken.

It is often claimed that the Legal Services Act is intended to open up the legal services market and make it easier for legal services to be delivered in innovative ways. Sadly, the process seems beset by delays and disappointments at every turn – largely, it seems, because of the involvement of so many bodies in the decision-making process. Of course, given the length of time it took to approve new rules under the old system, it may not be fair to criticise.

It is undeniable that the new regime has created a level of commercial uncertainty for new entrants to the market – prospective ABS firms, for example, were left wondering for almost four months about the timetable for submitting applications for approval. That delay was attributed to awaiting space on the parliamentary timetable; however, earlier and more effective communication between the LSB, the SRA and the Ministry of Justice may have avoided the problem.

Now, the CLC seems as determined as ever to diversify its offering, yet CLC-regulated firms – and indeed new entrants to the market – face continuing uncertainty as to when and how the scope of CLC-regulated activities might expand. Since the application was originally made in February 2011, I think firms that are wishing to diversify yet remain under the aegis of the CLC have a legitimate grievance.

Unanswered questions

In addition to the regulators themselves, the scope of reserved activities is under review and moves are afoot to bring both will writing and immigration services into the sphere of reserved activities. Who will regulate these services and how are questions that need to be considered. Should the decision be taken to regulate these activities under the auspices of the LSB? And how long will it take for new regulators to be approved or for existing regulators to extend the scope of their regulation to encompass the new reserved activities? All approved regulators, licensing authorities and the LSB should make every effort to ensure that reliable and workable timetables are put forward.

All solicitors will be aware of the massive exercise the SRA undertook in replacing the old code of conduct within an almost impossibly demanding timescale. While the SRA largely delivered on time, we are only six months in to the new regime and we’re already on the third issue of the handbook and, of course, the designation of the SRA as a licensing authority was delayed resulting in frustration and uncertainty for those hoping to apply for approval as SRA-regulated ABSs.
In a market that continues to be difficult, firms and new entrants are struggling to make long-term plans to ensure their commercial success. Delays and the incredible bureaucracy that now seem to permeate dealings with and between regulators only make life harder.

Of course, the LSB is currently the subject of the MoJ’s triennial review of quangos. While no one truly expects the LSB to be abolished, one can only hope that the review will generate some constructive suggestions to enable more efficient communication and avoid unnecessary delays and uncertainty.

Susanna Heley

This article was first published by Solicitors Journal and is reproduced by kind permission.


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