DCA Releases Response To Joint Committee Report On Legal Service Reforms

by Robin Pilgrim, LawAndTax-News.com, London

27 September 2006

The UK's Legal Services Minister, Bridget Prentice on Monday announced publication of a government response to the report by the Joint Committee on the draft Legal Services Bill, which was released earlier this year.

Ms Prentice announced that:

"I welcome the Committee's careful consideration of the draft Bill. This response shows how we propose to build on their recommendations. The end result will be better legislation which takes account of a wide range of views."

She continued:

"We are committed to providing a regulatory framework which encourages innovation and flexibility in the delivery of services but also promotes quality and, importantly, puts the consumer first.

The draft Bill’s provisions cover three main areas: a new regulatory structure for legal services with a new Legal Services Board (LSB) at its head; the removal of existing restrictions on the business structures in which legal services can be provided, allowing outside management or ownership and enabling lawyers and non-lawyers to work together to deliver legal services; and the creation of a new statutory complaints body - the Office for Legal Complaints - with powers to handle complaints that are not satisfactorily resolved “in house” by the legal service provider and to award redress.

In its report, the Joint Committee announced that:

"While there are many areas where we support the Government’s approach, we have in our Report highlighted a number of concerns which we hope the Government will consider carefully before introducing a Bill in the next session of Parliament."

"Our main concerns about the policy set out in the draft Bill are:

A shift in emphasis in the Government’s approach to reform from the “public interest” to the “consumer interest”

They do not always equate to the same thing and we recommend that the public interest should be included in the regulatory objectives.

A threat to the independence of the legal profession

We are concerned about the level of involvement of the Secretary of State in the regulation of legal services, in particular the appointment of the chairman and members of the LSB. It would be wrong to create any perception of government seeking to exert day-to-day control over the legal profession and we recommend that the Government should be involved only when it is absolutely necessary.

The approach to alternative business structures (ABS) for providing legal services

The approach to liberalising business structures in the draft Bill is the one area where the Government seeks to go well beyond the recommendations of Sir David Clementi and where we find the reforms the most troubling. We have been told about the potential for conflicts of interest in ABS firms, both between lawyers and shareholders and between lawyers and non-lawyers.

We are worried both about the speed of approach and the level of uncertainty about the impact of the reforms, particularly on access to justice in rural areas and legal aid provision. Our over-riding concern is that that nothing in the reforms should have a detrimental impact on the quality of legal services provided by a legal professional to a client.

The cost of the reforms

We are not convinced by the estimate of the costs of the new regulatory framework and the Office for Legal Complaints or of the efficiency savings identified, which we regard as speculative at best. We recommend that the Government revisits these estimates and gives further consideration to funding the start-up costs of the new system."

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