Rigorous and effective regulation is in the public interest. Of that there can be no doubt. The Bar has never been afraid of it, and the Bar having, and working to, the highest possible standards, welcomes it. David Edmonds, Chairman of the Legal Services Board, in his article said that “we should remember that we exist because Parliament deemed that self-regulation had failed, because the public were no longer convinced that [our] interests were at the core of legal services regulation or in complaints resolution.” I find that surprising. In my many meetings with Government this year, it has always been made clear that self-regulation by the Bar was not of concern to either Government or the public. Indeed, just last week, I met with the Legal Ombudsman, who said of the “service complaints” received, only some 3-4% related to the Bar. Mr Edmonds should perhaps go back carefully to the parliamentary debates in 2006-7 in order to remind himself that the will of Parliament was that legal services regulation should not be subject to a “one size fits all approach” to regulation.
The Bar has no concerns about independent regulation per se, indeed we welcome it because independence is fundamental to the legal profession. Independent regulation ensures public confidence in that regulation. But let us not be confused. Independent does not mean unaccountable. Accountability leads to responsible regulation; accountability that is in terms of cost, and in terms of activity.
In terms of cost, the legal Ombudsman told me that they are looking to, and expect to, reduce the costs of their regulation. I was interested to learn that they operate from premises in the very centre of Birmingham at a rental cost of £12 per sq ft. At the same time the costs of the Legal Services Board (LSB) are increasing, as are the costs of our frontline regulator, the Bar Standards Board (BSB). Last year the BSB’s budget was increased (on an annualised basis) by 24.7% - an increase which they seek to replicate this coming year.
Who audits the costs of the regulators? So far as the costs of regulation by the BSB are concerned, under Internal Governance Rules (“IGRs”) required by the Legal Services Act 2007, the Bar Council, as Approved Regulator under the Act, is required “to take such steps as are reasonably practicable to ensure that it provides such resources as are reasonably required for or in connection with the exercise of its regulatory functions.” Complaints about their ever-increasing costs are met either with expressed concerns about interference with regulatory independence, or with the requirements of the LSB for more proactive “regulation.” Effectively, the Bar is dis-incentivised from seeking to control BSB expenditure and hence funding requirements.
So far as the costs of the LSB and OLC are concerned, they are borne by the legal profession in the first instance, and ultimately, in publicly-funded work by the profession which cannot pass on those costs to the client, and, in privately funded work, by the consumer whom the regulation is designed to protect as the costs of that regulation are passed on.
Suggestions that the costs of regulation are relatively low are nothing to the point. The question, in the public interest, must be whether the costs incurred are necessary!
I have commented favourably on the approach adopted by the Legal Ombudsman. I find myself unable to comment so favourably on the approach adopted by the BSB and the LSB. Are either of them looking to make cuts? I do wonder how high in the list of the BSB’s priorities is accountability in terms of costs. As for the LSB, they too appear to treat themselves as being unaccountable to those who pay for the activities they undertake. Mr Edmonds seeks to take comfort in the results of the Ministry of Justice’s Triennial Review. Is the fact that the Government is not paying the costs of the LSB perhaps anything to do with the absence of any criticism as to their costs?
Without accountability comes indiscipline, with resultant duplication, unnecessary expenditure and waste.
From my most recent meetings with Ministers, since the outcome of the Triennial Review, I have detected some sympathy for the notion that the legal profession may be being “over-regulated”. It is no doubt for us to make that case. I suspect it may be something in which we could make common cause with the Law Society.
If we can make that case effectively, Mr Edmonds, far from “walking forwards briskly,” will be “skating on thin ice”.