ICAEW Slams Report On Draft Legal Services Bill

by Robin Pilgrim, LawAndTax-News.com, London

27 July 2006

According to the Institute of Chartered Accountants in England And Wales, the report of the Joint Committee on the draft Legal Services Bill, published on Tuesday, does nothing to help open up the market for legal services to greater competition, even where covered by very adequate safeguards, and could be seen as protectionist.

In its written and oral submissions to the committee, the Institute argued that the report fails to address the concerns of the accountancy profession, and called for chartered accountants to be allowed to provide professional advice in areas spanning legal and non-legal areas such as non-contentious probate and trusts without being subject to any additional regulatory burden.

According to Felicity Banks, Head of Business Law at ICAEW, chartered accountants can be well qualified to provide these services and in many cases, working alongside solicitors, already do.

She observed that:

“It must be in the consumer and therefore public interest for other qualified professionals, who are already covered by a robust professional, technical and ethical framework, to be allowed to offer some legal services. The Legal Services Bill, as it stands today, misses the opportunity for such reform.”

The draft Bill currently contains provision for the creation of Alternative Business Structures (ABS) under which different professionals, such as lawyers and accountants, can work together in the provision of services to their clients. The Institute supports their creation as a valuable deregulatory measure, although it expressed concern that these would have been subject to the regulatory framework of the legal profession, even if the majority of services offered were in other areas such as accountancy.

The report from the Joint Committee recommends the effective shelving of such multi-disciplinary partnerships, even between appropriately qualified professionals.

Ms Banks concluded:

“We support the ABS model in principle, although the proposals contained in the legal services bill effectively left in place significant barriers for accountancy practices that want to offer legal services."

"The Joint Committee report is disappointing in that it too has failed to recognise that the legal profession is one of a number of professions able to provide services within their capabilities and subject to appropriate oversight. We believe this is effectively anti-competitive and will continue to press for more wide ranging reform when the Bill is debated by Parliament.”

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