Marzena Lipman, regulatory policy advisor at the Law Society, provides an update on the final Mayson Report on Reforming Legal Services.

Earlier this month Professor Stephen Mayson published a report ‘Reforming Legal Services: Regulation beyond the echo chambers’, following a two-year independent review into the regulation of legal services in England and Wales, which was supported by the University College London.

The report concludes that the legislative framework under the Legal Services Act 2007 (the Act) is outdated and not sustainable in the long-term and proposes wholesale reform in the future.

Risk-based regulation

Central to Mayson’s framework is a move away from the current title-based regulation towards risk-based regulation of all legal practise areas, whether reserved or non-reserved. All providers of legal services would be regulated to a various degree depending on the nature of work they undertake and brought within the Legal Ombudsman (LeO) jurisdiction.

Recommendations include:

  1. High risk practice areas such as the conduct of litigation, advocacy and others would be subject to ‘before’ and ‘during the event’ authorisation, and opened up to all individuals meeting the authorisation conditions, beyond the current title-holders.
  2. All legal services providers would be overlooked by a single, sector-wide regulator, which would replace the Legal Services Board (LSB), the Solicitors Regulation Authority and other frontline regulators. The single regulator would set the conditions for authorisation for various activities and the award and removal of titles, but professional bodies could play a role in education and training and promotion of higher professional standards.
  3. Title would no longer be the only entry to practise—solicitors, barristers and other title holders would co-exist alongside other providers authorised by the single regulator.

Mayson argues that his framework would bring within regulation unregulated providers which are currently outside the regulatory remit, such as lawtech, McKenzie Friends, will-writers, paralegals and others, and offer more protection and choice to consumers. Mayson admitted he has not carried out a cost-benefit analysis of the proposals, and whether they are likely to deliver better outcomes than the current framework.

Short-term solutions

In addition to long-term proposals for the wholesale reform, Mayson calls for more immediate short-term solutions to deal with the current Covid-19 crisis, with the prospect of some law firms leaving the market and many people turning for help to unregulated providers. These include a public register of unregulated providers, including paid McKenzie Friends, created by the LSB, with LeO’s jurisdiction extended to complaints against providers on the LSB register.

Are changes likely?

The Ministry of Justice has recently indicated it hasn’t got the appetite for a review of the Act. However, the LSB is looking at what further reform is possible using their existing legislative powers in the context of development of their new strategy for 2021-24. In June the LSB Board agreed they should undertake preliminary work on reserved activities. Pending the outcome of this work, the LSB Board will make the decision on whether to carry out a review of reserved activities. This would be followed up by a stakeholder consultation at the end of the year on whether to actually conduct the review.

In parallel, the CMA plans to conduct a review to evaluate the implementation of the recommendations of their 2016 legal services market study. One of the CMA’s recommendations was to look at whether to extend protection from existing redress schemes to customers using ‘unauthorised’ providers. This could be pursued by extending access to LeO or through alternative arrangements such as the use of alternative dispute resolution or self-regulation. These recommendations echo one of Mayson’s short-term solutions to extend the jurisdiction of LeO to unregulated providers listed on the LSB public register.

The Law Society view

In response to Mayson’s report the Law Society issued a press release saying that in the current climate, legal services firms need more support, not a wholesale review of the regulatory framework, and that policy makers need to make better use of the current framework. Instead of contemplating a major reform, we suggested that the immediate focus should be on aiding the recovery of the legal sector post-COVID-19, proper investment in the legal aid and justice system, and greater public legal education to help people to recognise the legal issues and know when to seek help. Further information on the Law Society engagement with Mayson review is available here.