Office of Public Sector Information
18.In 2001 the Office of Fair Trading (OFT)(1) published a report recommending that rules governing the legal professions should be subject to competition law and that unjustified restrictions on competition be removed. Following this, the Government carried out a consultation, and published a report into competition and regulation in the legal services market.(2)
19.In 2003 Sir David Clementi was appointed by the Government to conduct an independent review of the regulation of legal services. He found that many areas were in need of restructuring and development, and agreed with the Government’s earlier conclusion that the current regulatory framework was “inflexible, outdated and over-complex”.(3) Sir David highlighted concerns about the current:
regulatory framework,
complaints handling systems, and
restrictive nature of business structures.
20.In October 2005 the Government published a White Paper, The Future of Legal Services: Putting Consumers First.(4) The White Paper set an agenda for reforming the delivery of legal services. It proposed a new regulatory framework that would direct regulation to those areas where it is needed:
“We will create a Legal Services Board, an Office for Legal Complaints and we will take steps to enable firms to provide services under alternative business structures to those presently available.”
21.The draft Legal Services Bill was published in May 2006 and was subject to pre-legislative scrutiny by a Joint Committee of both Houses of Parliament. The Joint Committee reported in July 2006, and the Government published its response to this in September of the same year.
22.Six pre-existing forms of legal service or activity are covered by the Act. These are:
the right of audience in the courts,
the right to conduct litigation,
reserved instrument activities,
probate activities,
notarial activities,
the administration of oaths.
23.Prior to the commencement of this Act, these services were regulated by legal professional bodies such as the Law Society or the Bar Council, as well as – to varying degrees – higher level regulators such as the Secretary of State, the Master of the Rolls and the OFT. In addition to these different regulators, there were also a range of major purchasers in the market who acted as quasi-regulators, by setting their own contract terms and prices – for example, the Legal Services Commission, and commercial organisations who operate “panel” systems. This Act does not directly affect these quasi-regulators.
24.Prior to commencement, there were a number of restrictions on the type of business structures through which legal services could be provided, mainly in regulators’ professional rules. Some existing regulators prohibited lawyers from entering into partnership with non-lawyers. They also placed restrictions on unregulated persons being formally involved in the management of these businesses, and unregulated persons having any stake in the ownership of such businesses. In many cases, these restrictions were at least partly due to the fact that legal regulators did not have the powers they needed to effectively regulate practices in which non-lawyers exercised some form of control. This generally meant that lawyers were limited in the extent to which they could form businesses with non-lawyers or with different types of lawyer. The Act seeks to facilitate a regulatory framework in which different types of lawyer and non-lawyer are able to form businesses together, and in which regulators can be given effective powers to regulate such businesses.
25.Previously, if consumers wished to complain about any of the legal services listed above, they needed to take that complaint up, in the first instance, with the person they were complaining about. If the complaint was not resolved in-house, consumers could then make a complaint to the regulatory body responsible for regulating the person providing the service (for example, the Law Society, the Bar Council). In the event that a complainant was not satisfied with the way in which a complaint has been handled by a regulatory body, the complainant was then able to refer the complaint to the Legal Services Ombudsman. The Ombudsman investigated the way in which the complaint was handled and the response from the professional body. If the Ombudsman believed that a complaint had not been investigated properly, they could require that the professional body look at the matter again. The Ombudsman also had powers to investigate individual complaints. In 2004, the Ombudsman exercised this power in less than 1% of cases.(5)
26.Explanatory notes to accompany each Schedule are contained within the notes for the section introducing the Schedule.
27.This section sets out the eight regulatory objectives that the Board, the approved regulators and the OLC will be under a duty to observe when exercising their functions. These include promoting and maintaining adherence to the professional principles by those authorised to carry on reserved legal activities.
28.The Act does not rank these objectives and principles in order of importance. The Legal Services Board, the Office for Legal Complaints and the approved regulators will be best placed to consider how competing objectives are to be balanced in a particular instance. Section 3 sets out the Board’s responsibilities in relation to the regulatory objectives. Sections 28 and 116 do the same in respect of the approved regulators and the Office for Legal Complaints.
29.This Part of the Act makes provision regarding the Board’s constitution and its functions.
30.Part 3 of the Act identifies the “reserved legal activities”, that is the forms of legal activities or services the provision of which is subject to the new regulatory regime.
31.Prior to commencement of the Act, regulators, such as the Law Society and the Bar Council, regulated the practitioners providing these services. In addition to these regulators, the system involved a number of other bodies acting in a regulatory capacity, including:
the Secretary of State,
the Master of the Rolls,
the higher judiciary,
the Legal Services Ombudsman,
the Legal Services Complaints Commissioner,
the Immigration Services Commissioner,
the Home Secretary,
the Department for Trade and Industry,
the Office of Fair Trading,
the Financial Services Authority, and
the Archbishop of Canterbury.
32.In his 2004 independent review of legal services,(6) Sir David Clementi referred to observations that the current regulatory arrangements resembled a “maze” and stated that he agreed with the Government’s earlier statement(7) that the existing regulatory system for legal services was “outdated, inflexible, over-complex and not accountable or transparent enough”. In 2005, following Sir David’s report, the Department for Constitutional Affairs published a White Paper, The Future of Legal Services: Putting Consumers First.(8) The White Paper detailed proposals to reform the current system by implementing a new regulatory framework that would remove the “regulatory maze” of oversight regulators.
33.This Part of the Act establishes the Legal Services Board which acts as an independent oversight regulator. It sits at the head of the new regulatory framework. The Board oversees the new approved regulators, and seeks to ensure that they carry out their regulatory functions to the required standards. Both the Board and the approved regulators must have regard to the regulatory objectives when exercising their functions.
34.This Part of the Act sets out the structure and functions of the Board. It outlines the functions that the Board has in relation to the regulatory objectives, and the ways that it will maintain these objectives. It also sets out the requirements for both appointment to and dismissal from the Board and the powers that the Lord Chancellor will have in relation to these processes.
35.This section establishes a corporate body called the Legal Services Board to act as an independent oversight regulator.
36.Schedule 1 is about the Board and includes:
the membership of the Board,
the terms of appointment and tenure of members,
staffing,
committees,
the Board’s powers of delegation, and
borrowing and accounts rules in relation to the Board.
37.Sub-paragraph (1) of paragraph 1 provides that the Board is to be constituted by a chairman, a Chief Executive and between seven and ten other persons. The Lord Chancellor will appoint all Board members other than the Chief Executive, following consultation with the Lord Chief Justice. The Board will appoint the Chief Executive.
38.The chairman and the majority of the Board must be a lay as defined by sub-paragraph (4) of paragraph 2 of Schedule 1. “Lay persons” are persons who have never been authorised to conduct activities that are reserved legal activities under the Act. Claims managers and Scottish and Northern Irish lawyers also fall outside the definition of “lay person”.
39.Paragraph 3 makes provision regarding criteria the Lord Chancellor must have regard to when appointing “ordinary” Board members. “Ordinary members” are members of the Board other than the Chief Executive.
40.As required by the Commissioner for Public Appointments, all Ministerial appointments to the Board must be made in accordance with the Commissioner’s Code of Practice. As part of the planning of the appointments process, the Lord Chancellor will seek the views of interested parties on issues such as selection criteria and the diversity of skills and experience needed on the Board. The Lord Chief Justice will also be consulted on the appointments process (sub-paragraph (3) of paragraph 1). In accordance with the Commissioner’s Code of Practice, a selection panel, including, amongst others, a representative from the public body itself and an independent assessor will conduct the key stages of the appointments process. The outcome of the Panel’s deliberations will form a recommendation to be made to the Lord Chancellor, who will then consult the Lord Chief Justice.
41.Terms of appointment are set out in paragraphs 4 to 9 of the Schedule. An ordinary member must be appointed for a fixed period, which must not exceed five years. A person may only be re-appointed once for a further period not exceeding five years.
42.Paragraph 7 of Schedule 1 sets out the circumstances in which the Lord Chancellor may remove ordinary Board members. Where the Lord Chancellor wishes to remove an ordinary Board member, the Lord Chancellor must first consult with the Lord Chief Justice. Where the member is not the chairman, the Lord Chancellor must also consult the chairman.
43.The chairman or other members may also resign by giving notice to the Lord Chancellor. These provisions do not apply to the Chief Executive who is appointed by the Board.
44.Paragraphs 10 to 12 set out the terms of remuneration of members. The Board is able, if it is considered necessary, to pay pensions, allowances or gratuities to the chairman and other ordinary members of the Board. The Board may also pay compensation to the chairman or other ordinary members in certain circumstances.
45.Paragraphs 13 to 18 make provision regarding the appointment of staff members by the Board. The Board must appoint a Chief Executive, and may appoint any other staff that it considers appropriate to assist in the performance of its functions. Paragraph 17 allows the Board to pay compensation to its staff or former staff for loss of employment. Paragraph 18 provides that a member of staff may also be a member of the Board, but may not be the chairman.
46.Paragraph 20 sets out the Board’s powers to form committees which may in turn form sub-committees. Paragraphs 21 and 22 enable the Board to regulate its own proceedings and those of its committees.
47.Paragraph 23 allows the Board to authorise individual Board members, committees and sub-committees of the Board and members of the Board’s staff to carry out the Board’s functions on its behalf. The Board may not delegate its rule–making functions under the Act, save for any rule–making functions it has in respect of its own procedures, the procedures of its committees and sub-committees and in its capacity as an approved regulator or a licensing authority.
48.Paragraph 24 allows the Board to borrow money, subject to the authorisation of the Lord Chancellor.
49.Paragraph 25 requires the Board to keep proper financial accounts. Requirements to produce an annual report are set out in section 6. At the end of each financial year the Lord Chancellor must lay before Parliament a copy of the statement of accounts for that year and a copy of the Comptroller and Auditor General’s report on that statement.
50.Paragraph 26 states that the Board is not to be regarded as having the same status as the Crown. Accordingly, the Board’s property is not to be regarded as property held on behalf of the Crown and staff are not to be regarded as servants or agents of the Crown or as enjoying the same status.
51.Paragraphs 30 to 32 make provision for amendments to the House of Commons Disqualification Act 1975, the Northern Ireland Assembly Disqualification Act 1975, the Freedom of Information Act 2000 and the Public Records Act 1958. These are standard provisions which apply to many public bodies.
52.Paragraph 33 provides that the Board, its members and its staff will not be held liable for any damages resulting from the exercise of the Board’s functions, except in the cases where an act or omission is carried out in bad faith or was unlawful in accordance with section 6(1) of the Human Rights Act 1998.
53.This section states that the Board must, so far as reasonably practicable, act in a way that is compatible with the regulatory objectives. It also requires the Board to have regard to the principles of best regulatory practice. Specifically, the section refers to the importance of regulatory activities being transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.
54.This section imposes a duty on the Board to assist in the maintenance and development of standards of regulation by approved regulators of regulated persons and also the education and training of those persons. For example, the Board may issue guidance on, or disseminate examples of, good education and training practices or principles of professional conduct that have been developed for a reserved legal activity by one approved regulator to all approved regulators.
55.This section requires that the Board have regard to generally accepted principles of good corporate governance in managing its affairs.
56.This section states that the Board must prepare an annual report on the discharge of its functions. This will be laid before Parliament. It will include the extent to which, in the Board’s opinion, the Board has met the regulatory objectives.
57.Paragraph 25 of Schedule 1 sets out the nature of financial accountability in relation to the Board’s accounts.
58.Section 8 requires the Board to set up and maintain a Consumer Panel – a Panel of persons whose task will be to represent the interests of consumers (as defined in section 207). Appointments to the Panel will be made by the Board with the approval of the Lord Chancellor, and one of the Panel members will be appointed as chairman of the Panel by the Board. Section 8 also sets out the categories of person who may not sit on the Panel.
59.Section 9 enables the Panel to make arrangements for committees established by it to provide advice to it. Section 10 provides that the Board must consider representations made to it by the Consumer Panel and must publish a notice where it disagrees with the Panel’s advice. Under section 11, at the Board’s request, the Panel may also carry out research for the Board and provide the Board with advice.
60.This Part of the Act lists and defines the reserved legal activities. It explains who is entitled to carry on these activities, and sets out the criminal penalties for those who pretend to be entitled, or offer or carry out these activities when not entitled to do so. It sets out transitional arrangements for those currently allowed to carry on reserved legal activities. It also explains the process for altering the scope of the reserved legal services, and the roles of the different bodies involved in this.
61.This Part also defines what an approved regulator is, designates certain bodies as approved regulators, and makes provision allowing for other bodies to achieve this status in the future.
62.The Act identifies six forms of legal activity which are reserved. These are:
the exercise of a right of audience in the courts,
the conduct of litigation,
reserved instrument activities,
probate activities,
notarial services, and
the administration of oaths.
63.The existing regulators, which the Act recognises as approved regulators, are:
the Law Society,
the General Council of the Bar,
the Master of the Court of Faculties,
the Institute of Legal Executives,
the Council for Licensed Conveyancers,
the Chartered Institute of Patent Attorneys,
the Institute of Trade Mark Attorneys, and
the Association of Law Costs Draftsmen.
64.This section lists the legal activities that are to be regulated under the Act (the “reserved legal activities”). Schedule 2 sets out the meaning of each activity. The definition of “legal activity” is set out at section 12(3), though not every legal activity is necessarily regulated under the Act. However, under section 24 the Lord Chancellor may, by order, amend section 12 and Schedule 2 so as to add any legal activity to the list of reserved legal activities for the purposes of the Act.
65.The “reserved legal activities” defined by section 12 are all activities that were regulated under previously enacted legislation.
66.This section provides that a person (including a body corporate or an unincorporated body) is entitled to carry on a reserved legal activity only if the person is:
an authorised person (see section 18), or
an exempt person (see section 19).
67.This is subject to transitional protection for non-commercial bodies, which is provided for in section 23.
68.This section makes it an offence for a person who is not entitled to carry on a reserved legal activity to carry out that activity. Persons guilty of the offence may be liable to a term of imprisonment of up to two years and/or a fine.
69.A person who commits an offence in relation to rights of audience or rights to conduct litigation in relation to any proceedings (or contemplated proceedings) is also guilty of contempt of the court involved, and may be punished accordingly.
70.This section concerns the carrying on of reserved legal activities by employers and employees. Section 15(2) to 15(3), together with section 15(11), make it clear that where a person carries on an activity through an employee or manager both that person and the employee or manager are regarded as carrying on the activity and so both must be entitled to carry on the activity under the Act.
71.Section 15(4), together with section 15(5), provides that where an individual employee carries out a service for an employer which would ordinarily be a reserved legal activity (for example, litigation services), the employer will not be treated as carrying out a reserved legal activity if the service is not provided to the public or a section of the public in the course of or as an aspect of the employer’s business. The effect of this is, for example, that where a body employs lawyers to provide in-house legal services to that body or to certain persons connected to the body, but not to the public or a section of the public, the body in question will not need to be an authorised person. This does not alter the fact that any individual lawyers which the body employs to provide reserved activities will need to be authorised persons.
72.Sections 15(6) to 15(8) deal with trade unions. People who are provided with relevant services by virtue of membership (including the membership of another person, and former membership) do not constitute the public or a section of the public where legal services that the union is providing are excepted membership services. These are defined in section 15(7) as services related to a member’s relevant activities, other activities arising from them, events that have occurred in the course of them, and activities that are connected with a person’s union membership. The Lord Chancellor may specify other services by order and, under section 15(8), may make orders about the circumstances in which services are connected with these matters. Section 15(12) defines relevant activities for trade union purposes as any employment, trade, occupation, or other activity to which union membership relates.
73.Under section 15(9) the Lord Chancellor may also by order make provision about what constitutes a “section of the public”, and the circumstances in which the provision of services does or does not form “part of the employer’s business”. These orders can only be made on the Board’s recommendation (section 15(10)).
74.This section provides that if an employer carries on a reserved legal activity through a manager or employee who is not entitled to carry on that activity, the employer will commit an offence, even if the employer is so entitled, unless the employer has taken all reasonable precautions and exercised all due diligence to avoid committing the offence. This offence carries a maximum penalty of an unlimited fine and/or two years’ imprisonment.
75.This section makes it an offence for a person who is not entitled to carry on a reserved legal activity, to pretend to be entitled to carry on that activity, or to use a name, title or description which implies that that person is so entitled. The penalties for committing this offence are the same as those for carrying on a reserved legal activity when not entitled.
76.A person is an “authorised person” in relation to a particular reserved legal activity if the person is authorised to carry on that activity by a relevant approved regulator (other than by virtue of a licence under Part 5) or the person is a licensable body and holds a licence under Part 5 which authorises the carrying on of the activity.
77.Sections 18(3) and (4) (together with Schedule 5 and Schedule 22) provide that certain existing bodies which would otherwise be required to obtain a licence under Part 5, are either deemed to be authorised or treated as exempt persons during a transitional period, after which point such bodies will need to become licensed.
78.Section 19 introduces Schedule 3 which makes provision exempting certain persons from the requirement to be authorised to conduct particular reserved legal activities. For example, an individual who carries on probate activities other than for fee, gain or reward is exempt. The Lord Chancellor may, by order, add or remove exempt persons from the Schedule. This may only be done on the recommendation of the Board.
79.This section defines “approved regulator” and “relevant approved regulator”, and introduces Schedule 4, which concerns the designation of bodies as approved regulators.
80.Part 1 of Schedule 4 lists the bodies which automatically became approved regulators when the Act came into force. The regulatory arrangements for these bodies are to be treated as having been approved by the Board at the time paragraph 1 comes into force. Sub-paragraph (3) of paragraph 2 makes it clear that the Board may exercise its power to direct a regulator to alter its regulatory arrangements even where the regulator and its regulatory arrangements are approved under this paragraph.
81.Part 2 of the Schedule makes provision regarding the procedure to be followed by bodies applying for designation as an approved regulator in respect of a reserved legal activity.
82.The Schedule details the material that must accompany an application and provides that the application must be accompanied by a prescribed fee, set by the Board with the consent of the Lord Chancellor.
83.The Board is required to make rules setting out the criteria by which it may refuse to consider an application. Where the Board decides to refuse to consider the application further, it must give notice to the applicant of its decision and the reasons behind it.
84.Where the Board proceeds to consider the application, it has a duty to seek advice before granting the application. Paragraph 5 requires that the Board must give a copy of the application and accompanying material to:
the Office of Fair Trading (OFT),
the Consumer Panel,
the Lord Chief Justice, and
such other persons as the Board considers it reasonable to consult regarding the application.
85.Paragraphs 6 to 9 set out the duties of the consultees:
The OFT and the Consumer Panel must give advice to the Board in respect of the application, as they think fit.
The OFT must, in particular, consider whether granting an application would, or would be likely to, restrict, distort or prevent competition within the market for reserved legal services. The Consumer Panel must have regard to the likely impact that granting an application would have on consumers.
Those other persons whom the Board considers it reasonable to consult may give advice in respect of the application.
The Lord Chief Justice must then consider this advice, and give advice to the Board regarding whether the application should be granted. The Lord Chief Justice must, in particular, have regard to the likely impact of granting an application on the courts in England and Wales.
86.Paragraph 10 allows the consultees, for the purpose of giving advice, to ask that the applicant, or any other person, provide additional specified information.
87.The Board (which must make rules governing the making of representations) must give the applicant copies of any of the advice given by consultees. The applicant may make representations to the Board within the time period specified in paragraph 11.
88.Paragraph 12 of the Schedule explains that once the period for representations has passed, the Board must publish any advice provided by the consultees and any representations made. This does not prevent anyone who has given advice under paragraphs 6 to 9, or made a representation under paragraph 11, from publishing that material. Any publisher must, so far as practicable, exclude any matter which relates to the private affairs of a particular individual whose interests might be affected, seriously and prejudicially, by publication.
89.The Board must make rules specifying how it will determine applications. Paragraph 13 sets out the criteria that the Board must apply when determining an application.
90.Paragraph 14 sets out the procedure that the Board must follow in considering its decision. It must consider the advice and representations referred to in paragraph 85 of these Explanatory Notes, above, as well as any other information that it considers relevant, and then decide whether to grant the application. The Board may grant the application in whole or in part, and must give notice in writing of its decision to the applicant, and publish this notice.
91.Paragraph 15 states that the Board must give its decision within twelve months, beginning with the day on which the application is made to the Board. The Board may extend this decision period by issuing and publishing a notice, only after consultation with the OFT, the Consumer Panel, and the Lord Chief Justice.
92.Under paragraph 16, where an application is granted, the Board must recommend to the Lord Chancellor that an order be made designating the body as an approved regulator in relation to the appropriate reserved legal activity or activities. Where the application relates to more than one reserved legal activity, the Board may grant it in relation to all or some of those activities. The Board must publish its recommendation.
93.The Lord Chancellor may then make an order in accordance with the recommendation (or a part of it), or refuse to make such an order. Paragraph 17 sets out the procedure for doing this. If the Lord Chancellor decides not to make an order, the Lord Chancellor must give the applicant and the Board notice of that decision and of the reasons for it, and publish this notice.
94.Part 3 of the Schedule sets out how alterations to the regulatory arrangements of an approved regulator must be approved. If an approved regulator alters its regulatory arrangements, the alteration will not have effect until it is approved for the purposes of this Act. An alteration can include an addition to the arrangements, or a revocation of any part. Paragraph 19 sets out the circumstances in which an alteration will be approved.
95.Paragraph 20 provides that the Board may make rules specifying the way in which an application by an approved regulator to alter its regulatory arrangements must be made, and makes certain requirements as to the material that must accompany the application. Paragraph 21 sets out what the Board must do on receipt of an application. It may grant the application, or it may issue and publish a notice stating that it is considering whether to refuse the application.
96.Under paragraph 22, where the Board has given the approved regulator a notice, it may invite such persons as it considers appropriate to give it advice regarding whether the application should be granted. The consultees may, for the purpose of giving advice, ask that the approved regulator, or any other person, to provide additional information.
97.The Board must give the approved regulator copies of any of the advice given above. The approved regulator may make representations to the Board within 28 days, or such longer period as the Board allows, as specified in paragraph 23 of the Schedule. The Board must make rules governing the making of representations.
98.Paragraph 24 of the Schedule requires that once the period for representations has passed, the Board must publish the advice and representations. This does not prevent anyone who has given advice under paragraph 22, or made a representation under paragraph 23, from publishing that material. Any publisher must, so far as practicable, exclude any matter which relates to the private affairs of a particular individual whose interests might be seriously and prejudicially affected by publication.
99.Paragraph 25 sets out the material that the Board is required to consider before deciding whether to grant the application. The Board may grant the application in whole or in part, and must give notice in writing of its decision to the applicant, and publish this notice. The Board may refuse the application only if it is satisfied that one of the conditions set out in sub-paragraph (3) of paragraph 25 is met. If the Board decides to refuse the application, it must specify the reasons in its published notice.
100.Paragraph 26 provides that if the Board does not give the approved regulator notice of its decision within the decision period (twelve months), then the application is deemed to have been granted. The Board may extend the decision period with the consent of the Lord Chancellor. The total decision period must not exceed eighteen months.
101.This section defines the “regulatory arrangements” of bodies. These include the arrangements made for the body to authorise persons to carry on reserved legal activities, the body’s conduct rules, and disciplinary arrangements etc. The regulatory arrangements do not include arrangements which are made in connection with any role the body may have in representing or promoting the interests of persons regulated by it. This section also provides that regulatory arrangements include compensation and indemnification arrangements (and defines such arrangements).
102.Part 1 of Schedule 5, which is introduced by this section, provides that for the purposes of determining whether a person is an authorised person as defined in section 18, it is immaterial whether a person’s authorisation to exercise a right of audience or conduct litigation was granted by an approved regulator before or after the day upon which it is designated. Part 2 of the Schedule makes provision deeming certain categories of person to be authorised by an approved regulator to conduct certain reserved legal activities for the duration of the transitional period, or to be exempt during that period. The duration of the transitional period is to be determined by the Lord Chancellor. At the conclusion of the transitional period, unless a person is authorised or exempt under the Act, under section 14 the person will commit an offence if the person carries out a reserved legal activity.
103.This provision ensures that rights people have under the existing arrangements will be protected during the transitional period. Every barrister, qualified solicitor, legal partnership, legal executive authorised by ILEX, licensed conveyancer, duly certified notary public, registered patent attorney, registered trade mark attorney and law costs draftsmen is deemed to have been authorised to carry on certain reserved legal activities by their professional body, as listed in Part 2 of the Schedule.
104.Section 23 ensures that, during a transitional period, non-commercial bodies (as defined by section 23(2)) are entitled to carry on reserved activities without committing an offence. Without this, they would be unable to operate before the ABS licensing regime came into effect.
105.This section allows the Lord Chancellor, by order, to extend the activities within the scope of the definition of “relevant legal activities”, by amending section 12 or Schedule 2. The Lord Chancellor can make this order only on the recommendation of the Board. This will enable any legal services to be regulated at a later date where it would be in consumers’ interests to do so.
106.Schedule 6, introduced by this section, sets out the procedure for adding new activities to the list of reserved legal activities. It also sets out the procedure for determining whether a recommendation should be made under section 26 (recommendations that activities should cease to be reserved legal activities).
107.The following individuals/bodies may request that the Board investigate whether the reserved legal activities should be extended, or whether an activity should cease to be a reserved legal activity:
the Lord Chancellor,
the OFT,
the Consumer Panel, or
the Lord Chief Justice.
108.Where such a request is made, preliminary inquiries for an investigation by the Board may take up to three months, although this can be extended by agreement with the Lord Chancellor. Anybody else may make a request of this kind, although in such cases the Board will not be obliged to make preliminary enquiries. The Board can also instigate investigations even if no request has been made.
109.Paragraph 5 enables the Board to seek advice from the OFT and/or the Consumer Panel before determining whether it is appropriate to hold an investigation. If asked for advice, the OFT and the Consumer Panel must each give the Board such advice as it sees fit. The OFT must, in particular, consider whether making a change would, or would be likely to, restrict, distort or prevent competition in the market for reserved legal services. The Consumer Panel must have regard to the likely impact that making a change would have on consumers. Each may, for the purpose of giving advice, ask any person to provide additional specified information.
110.Paragraph 6 states that, if the Board seeks the advice of the Lord Chief Justice, the Lord Chief Justice must consider any advice provided to the Board by the OFT and/or the Consumer Panel, and then give such advice to the Board as the Lord Chief Justice sees fit. In deciding what advice to give, the Lord Chief Justice must, in particular, have regard to the likely impact of the proposed change on the courts in England and Wales. The Board must consider, and publish, any advice given by those persons.
Office of Fair Trading, 2001, Competition in the Professions – A Report by the Director General of Fair Trading Back [1]
Department for Constitutional Affairs, 2003, Competition and Regulation in the Legal Services Market – A Report Following the Consultation “In the Public Interest?” Back [2]
Clementi, Sir David, 2004, Review of the Regulatory Framework for Legal Services in England and Wales – Final Report Back [3]
Department for Constitutional Affairs, 2005, The Future of Legal Services: Putting Consumers First Back [4]
Legal Services Ombudsman, 2005, Annual Report of the Legal Services Ombudsman for England and Wales 2004/2005 Back [5]
Clementi, 2004 Back [6]
Department for Constitutional Affairs, 2003 Back [7]
Department for Constitutional Affairs, 2005 Back [8]
Legal Services Act 2007