IT'S TIME FOR WIDER INTEREST IN THE REFORM OF LEGAL REGULATION
By Neil Stevenson, Chief Executive, Scottish Legal Complaints Commission
Are consumers and law firms in Scotland being left behind? In October an independent review of legal regulation suggested that “the current complex regulatory framework was a serious, constraint on growth, investment and innovation”, and that this was having a negative impact on both consumers and the economic sustainability of the sector. In response, the Roberton Review(1), commissioned by the Scottish Government, recommended the creation of a single public-interest regulator for all legal services. The intended aim was to improve the regulation of aspects the legal services market, legal businesses and professionals. This change would allow the delivery of a more coherent and proportionate approach, focussed on risk and quality improvement (rather than ‘after the event’ intervention, as the current system perhaps does).
The recommendations have caused some excitement in the sector, but as Scotland contends with issues around Brexit, the possibility ‘Indy 2’, and the staples of education, health, and social care, what justifies regulatory reform being on the agenda now? And what are the risks of a debate dominated by the legal sector itself without wider engagement from civil society in Scotland and from the general public?
We at the Scottish Legal Complaints Commission had been calling for major reform since 2016, and many of our proposals form the basis of the final recommendations of the review. In the creation of a new single body our own organisation would be abolished. However, having worked for a decade in a vastly over complicated and legalistic system, which often focusses more on process than quality outcomes, we actually fully support the recommendations.
Indeed, it is that complexity of system which led to the last attempt at reform having completely ground to a halt so far. In 2010 legislation was passed by the Scottish Parliament which was meant to empower law firms to seek external capital to improve services and allow new business models like social enterprises. The goal was to help increase access to justice, and create modern business structures which encouraged future investment. Despite a decade of subsequent work that Act is still not implemented; meanwhile in England thousands of new businesses have been licensed under an equivalent regime, helping hundreds of thousands of citizens and businesses with legal issues.
2010 also saw an earlier Scottish Government commissioned project, the ‘Thomson Review’ (2) , recommend radical change, in that case a single regulatory scheme at least for those in the supreme courts.
In both cases implementation has to date proved impossible in Scotland. There are perhaps two dominant reasons. Firstly, the reforms added layers on top of an already overly complex system. After years of piecemeal reform, just about keeping the ship afloat, these last two potential patches appear to have broken the capacity of the current model to keep evolving. The 2010 Act has proven impossible to implement in practice. Thomson proved impossible without unpicking other issues (dealt with in the Roberton model). There has also been resistance from the traditional legal professions – in the 2010 legislation this was reflected in lobbying for a much more complicated and restrictive Act than in England, in Thomson simply by resistance to the reform once the review was published.
(1) Roberton Review - https://www2.gov.scot/About/Review/Regulation-Legal-Services
(2) Thomson Review - https://www2.gov.scot/Publications/2010/03/15112328/0
This all links to why there is a priority to deliver now, building on the momentum of the Roberton Review. This is not a case of a sudden new initiative, it is a case of a statutory framework strained over time, and for the last decade seemingly incapable of delivering the changes intended by the 2010 legislation. Legal regulation may never be the top agenda item for governments, but if there is not action based on this review does another decade pass, and Scottish business and consumers slip another decade behind in terms of choice, access and protections compared to their English counterparts?
Whose voices are heard?
The second point, about the need for engagement by civil society and consumers, has an even longer history. Since the very creation of the Scottish Parliament there has been criticism of the lack of meaningful consumer research around the legal services market on which to base policy. Calls for more independence in complaints in the first session of the Scottish Parliament led to the SLCC’s creation, but this was in many ways another ‘sticking plaster’ reform. A Government research working party clearly made the point about lack of evidence in 2006 following their review of the market (3). A Consumer Panel was created in statute in 2014, but the profession have actively lobbied against funding to allow it to carry out meaningful work.
The legal sector has statutory representative bodies (which are also the regulators) with a mandatory fees allowing well-resourced and powerful lobbying on behalf of the sector. Within minutes of publication of the independent review this resource has been fully directed at opposing key recommendations of the review. This is not a criticism, and these bodies provide a vital voice in the debate, but in the past these powerful institutional voices have drowned out the few voices that are talking instead about the legal services needs of Scottish businesses, the third sector, and citizens.
The SLCC is not discouraging debate, and there is huge expertise in the sector that absolutely needs to be drawn on and without which we won’t achieve a good outcome. However, the debate needs to balance interests in legal services in Scotland with other interests. We would love to see a real commitment to engaging with consumers and civic Scotland in finalising proposals for reform. To do that may take more resources and time, but if we fail we may end up with a no improvements or a repeat of the 2010 reforms with impractical legislation languishing on the statute books without being implemented.
Disruptive change ahead?
We hope the Scottish Government will consult on the outcome of the independent review later this year, and would encourage any organisation with consumer perspective or regulatory expertise to consider contributing to the debate. Especially important will be designing a system capable of delivering for the next 10 or 20 years in what is likely to be a period of rapid and disruptive change, rather than just looking back to the traditional problems of 20th century legal practice.
It is this area the SLCC will be focussing on in an upcoming Mackay Hannah conference (4). Together, these approaches will help ensure a system with is not just ‘fit for the future’ but also ‘fit for all’ in terms of the diverse needs of those who use legal services.
(3) Report by the Research Working Group on the Legal Services Market in Scotland - https://www2.gov.scot/Publications/2006/04/12093822/0
(4) MacKay Hannah Conference - The Role of Regulators in Scotland: Delivering Effective Accountability and Scrutiny for Public Services, Markets and Consumers
By Neil Stevenson, Chief Executive, Scottish Legal Complaints Commission
TRANSPORT IN SCOTLAND, WORK-PLACE PARKING, BREXIT AND REGULATION
As the Conservative leadership contest continues apace this week, Brexit is omnipresent. Brexit has taken two Tory leaders and Prime Ministers out at the knees, and it is the focus of what is effectively a single-issue leadership campaign.
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