Vice Chair of the Bar Sam Townend KC sets out some current concerns about the overreach of the oversight regulator.
Over the past few weeks the Bar Council has been working hard to persuade Government and Parliamentarians in the Commons and the Lords that the Legal Services Board (LSB), the oversight regulator for parts of the legal sector, needs to be reviewed, and needs to stop carrying out activity beyond its proper remit. Here is why.
By way of introduction, in the Noughties it was determined that the age of self-regulation of the legal professions was over and the implementation of the Clementi Review resulted in the Legal Services Act 2007 which created a two-tier regulatory system resulting in the creation for the Bar of:
a) a first tier regulator, the Bar Standards Board (BSB), forming part (but functioning independently) of the Bar Council; and
b) the LSB, to oversee and assist the BSB in its work and the work of other first tier regulators for the other legal professions.
We contribute to funding the LSB through our annual Practising Certificate Fee. But we have no say - beyond making representation - in the LSB’s budget setting. (Recent increases to the fee levied on all barristers have been necessitated and imposed by inflation-linked increases in the budgets of the LSB and the BSB). The LSB is a state agency independent from Government and accountable only to its own Board (on which there sits just one barrister). Its board meetings are held in private.
So what is the LSB doing which is so objectionable?
In simple terms, the LSB stepping beyond its remit - one that it largely stuck to in its first ten years of existence - of overseeing the performance of the BSB in conduct complaints, authorisation to practise, training and so on. In the last several years the LSB has been carrying out, and prioritising, activity that is much wider in scope, properly for politicians and policymakers and not regulators, and in doing so causing a greater regulatory and cost burden on members of the Bar. By way of example only:
- The LSB has set itself a legal sector-wide strategy for the “reshaping of legal services”, including the organising of national conferences to discuss developments in public policy. This demonstrates the breath-taking scope of its ambitions.
- The LSB has, wrongly, been practising market interference. First, through the issue of policy statements and otherwise, the LSB has mandated the first tier regulators to consider and implement standardisation and unbundling of the provision of legal services. Secondly, under the mantra of the consumer interest, the LSB has been promoting the development and use of online comparison websites. “WigAdvisor” (my joke), which the BSB is piloting, is utterly inappropriate for our referral profession with its sophisticated professional clientele and ill sits with the fact that we owe a balance of duties to the court as well as our clients (and the simpler fact that in many cases, and despite our best efforts, clients will properly lose following trial). This is not to mention the serious libel and detrimental diversity implications of allowing lay clients free rein with online reviews, the latter raised by many barristers at the February Bar Council meeting. These and other similar activities plainly constitute regulatory overreach. Under the 2007 Act, and unlike the economic or health sector regulators, the LSB has no role as a market actor, seeking to lead or influence the market.
- The LSB pressed on with a policy statement on ‘ongoing competency’, raising the spectre of compulsory and regular revalidation by practising barristers, despite there being no positive evidence of any systemic problem of competency at the Bar, as proven on review of the type and quantity of successful PI claims against the Bar and complaints upheld by the BSB and the Legal Ombudsman.
- Most recently it has come to our attention that the LSB plan a call for evidence “to address concerns about the important role that legal professionals can play in ensuring that non-disclosure agreements (NDAs) are not misused, for example to conceal wrongdoing including sexual misconduct, harassment, and discrimination.” This is an absurd enterprise that the LSB has embarked upon. While we may not like them or their use, and I for one do not, at present NDAs are lawful. It is for Parliament to consider whether they should be made unlawful, or perhaps made unenforceable unless both parties to them are legally represented. Whilst they remain lawful, if a lawyer is instructed to draft an NDA on behalf of their client, that is what they must do, in line with the professional principle that authorised persons should act in the best interests of their clients. Accordingly, the call for evidence and any subsequent public policy work or regulatory activity is not something that the LSB should be involved with because it has nothing to do with the LSB’s functions under the 2007 Act.
The reasons for my strong views in relation to these matters are two-fold:
First, it is vital that it is understood that the LSB’s finances come by way of a levy upon regulated persons. For those who can, the cost will be passed through to the consumers of the Bar’s services. For those who cannot pass on the cost (inevitably including those with a legal aid-financed practice) it is another financial burden which has to be borne by the practitioner. It is not, therefore, appropriate for the LSB to spend (in substantial part without real accountability) the Bar’s or consumers’ money on matters for which Parliament has not deemed it has a role.
Secondly, we surely all want the strong, effective delivery of regulatory functions by an organisation that understands the Bar as a (generally) specialised referral profession. This requires the LSB to concentrate on its principal function, that of assisting the BSB which, as recent performance reviews show, has been struggling with carrying out its core regulatory functions timeously. This does a disservice to both consumer complainants and the barristers who are being complained of. There is, in my view, a dire need - and it is in the public interest - for both the LSB and the BSB to focus all of their efforts on the central designated task and to not be distracted by wider public policy issues that are properly for others.
Last week, following a request by the Bar Council, the LSB wrote to say that it did not object to the Bar Council’s request for a Ministry of Justice departmental review of its role and performance, the last one having taken place in 2017. This is welcome and we continue to press the Government to implement such a review without delay.
The Bar Council has also submitted a response to the LSB ‘Draft Business Plan 2023-24’ consultation paper.