The Legal Services Board (LSB) has been effectively invisible to the legal professions since its creation by the seriously flawed Legal Services Act 2007. It sprang into view last year for proclaiming that the Solicitors Regulation Authority (SRA) failed in some respects over the Axiom Ince affair, into which the board commissioned an independent report.
I invite readers to consider the following questions:
1. What positive difference for clients, solicitors or the other legal professions has the LSB made since its foundation?
2. Why did the LSB approve the rules and procedures adopted by the SRA prior to the Axiom Ince debacle, but not recuse itself as holding a conflict of interest in its purported ‘independent’ report?
I contend that there have been no such benefits; and that in criticising the SRA, the LSB was covering its tracks and obscuring its own systemic failings. I expect the SRA to resist any LSB sanction by citing the board’s own role in approving the regime which failed in the Axiom Ince affair.
Despite its underwhelming performance, the board is now seeking a budget of over £6m in 2025/26, a 14% increase on the previous year. This amounts to a rise of £3.84 in each authorised person’s practising fee.
Two recent opinion pieces in the Gazette were telling. Gregory Treverton-Jones KC noted the SRA’s attempted power grab from the independent Solicitors Disciplinary Tribunal. The board has failed to address this, or to consider it in relation to how the SRA seeks to avoid scrutiny. The board has contributed nothing which can be said to have protected either the public or the profession in relation to standards, which really ought to concern MPs on the House of Commons Justice Committee.
I do not wish to mount a de facto defence of our frontline regulator, but large swathes of the SRA Standards and Regulations 2019 are, on any objective basis, solid, reasonable and representative of good practice. The rulebook is far clearer now than it was 20 or even 10 years ago.
The residual flaws in the regime should have been ironed out by avoiding groupthink; and the board ought to have acted as a critical friend and listened to the concerns of, for example, the Law Society, local law societies and indeed practitioners. Yet the LSB’s reports and publications are incoherent, full of jargon and divorced from the realities of day-to-day practice.
To reiterate, when things go wrong with the SRA, it must be remembered that the frontline regulator operates according to the rules signed off by its failed overlord.
I urge the Law Society Council to campaign for the following, without delay:
1. The abolition of the LSB;
2. The abolition, or severe curtailment, of the SRA’s financial penalties regime. This is not working for the profession or the public and, as I have written previously, is potentially unlawful in some aspects. Yet the regulator is seeking even greater fining powers. None of the healthcare professional regulators, or accountancy watchdogs, has powers akin to those of the SRA. What is so special about solicitors that we need to be treated like multinational financial institutions subject to the superintendence of the Financial Conduct Authority?
3. A single legal regulator. This would align solicitors with other professions, and indeed other legal professions. For example, at present there is a chasm between how solicitors and barristers are treated in terms of disciplinary outcome, arising from the bar’s domination of the judiciary. Aligning solicitors and barristers will lead to more reasonable outcomes for the former.
Last week the LSB announced its intention to overhaul ethics – seemingly without any self-awareness that the current frontline regulators’ rulebooks have all been approved by the board itself. If there is a problem with lawyers and ethics, then the LSB is part of the underlying cause. The board’s own statutory remit means that it is conflicted in any and all of the investigations it undertakes.
This ethical blindness may be stark but it is not uncommon – ‘ethical blindness can be defined as the temporary inability of a decision-maker to see the ethical dimension of a decision at stake’, to quote Palazzo, G., Krings, F. & Hoffrage, U. 2012: Ethical blindness. Journal of Business Ethics, 109: 323–338.
The irony of the LSB focusing on ethics given its role in high-profile failures would be laughable if it were not so damaging to the public interest and confidence in the provision of legal services. These are, ironically, requirements of the Legal Services Act 2007 which are not being enforced against the board.
In short, sweeping away the LSB given its lack of both impact and credibility would be in the public interest. The board is a burden but offers no benefit.
Others will have different ideas, or variations on my own. My point is that everybody knows the current system is not working. While it is easy to blame the higher-profile SRA, on some of the fundamental issues the self-serving and utterly impotent LSB is a root cause of the regulatory crisis that is now upon us. The time has come for meaningful action.
Paul Bennett, a partner at Bennett Briegel LLP, specialises in legal regulation and partnership
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