I was thrilled to chair a roundtable discussion in Bangor, North Wales, last week (25 April 2024) with lawyers, academics, representatives from regulators, the Welsh Government and advice centres. We explored several issues, including access to justice, the benefits and risks of technology, and the challenge of attracting and retaining lawyers in Wales. I am deeply appreciative of everyone who shared their invaluable thoughts and ideas on where regulation can make a difference for people who need legal services. I gleaned plenty of insights to inform our work, and I’m committed to ensuring our conversations lead to tangible change.
Using data to increase the range and reach of legal services
At this month’s Board meeting (30 April 2024) we discussed our recently published individual legal needs survey. Jointly commissioned with the Law Society, it shows that a third (32%) of people in England and Wales have an unmet legal need. This has not improved since the last survey in 2019, when it was 31%.
Many people surveyed did not know that there were legal experts who could help them with their legal issues. Many people who accessed help wished information could have been provided in plain language. There is an opportunity for the LSB and others to use the rich data and insights to improve access to justice dramatically. The Board endorsed plans to share the results widely with others, including the representative bodies and legal services providers. We also welcomed plans for further data analysis from the survey, including how experiences and outcomes vary by socio-economic and cultural factors.
Sticking with the theme of research and data, we considered the sixth data digest, which reports on indicators of progress against the nine challenges in the Reshaping Legal Services Strategy. We noted the Office for National Statistics (ONS) figures indicating an increasing gender pay gap within legal activities. The Board reaffirmed its ambition that the pay gap narrows significantly in the future, as we seek to make progress towards a more diverse and inclusive profession.
The Board discussed measures showing that the economic health of the sector was broadly positive. However, in the context of recent high-profile law firm collapses, with significant consumer detriment, the Board is anxious to get more information on the financial health of law firms and to understand how frontline regulators monitor the risks presented by unsustainable businesses. We are also keen to know more about the level and rates of takeovers and mergers in the sector. The team will build on data from stakeholders, including the SRA, to inform its commitment to establishing an appropriate horizon scanning system.
SRA Regulatory Reviews update
In December 2023, we announced a review concerning Axiom Ince, which is due to be concluded in spring 2024. Since we started that review, the impact of SSB Group’s collapse has grown in prominence, and its potential alignment with the Axiom matter has become more apparent to us. Therefore, we announced earlier this month that we would expand the scope of the review to encompass the SRA’s regulatory steps in the lead-up to the collapse of SSB Group.
The Board was aware that some of the issues arising from the review were likely to fall beyond our regulatory remit. Therefore, we committed to sharing information with other agencies to ensure that broader issues that are not for the LSB to address are not missed. The overall review is due to be concluded by summer 2024.
Empowering consumers and people who need legal services
In 2022, we published our statement of policy on empowering consumers. It sets out our consumer-focused expectations for regulators to ensure people who need legal advice can shop around easily and compare information about price and quality.
While regulators have made some progress towards meeting our requirements, for example, on price transparency, significant work remains to be done. Particularly on:
- providing information to consumers about quality
- making it more straightforward for consumers to check the regulatory records of legal services providers
- enabling third parties, such as comparison websites, to assist consumers searching for legal services.
In July 2023, all regulators confirmed that they would meet our expectations by the end of September 2024. So, they need to make further progress promptly. We will consider action under our enforcement policy if regulators do not assure us that they meet the statement’s expectations.
Evaluation of the Internal Governance Rules
The Internal Governance Rules govern the relationships between approved regulators and regulatory bodies and are intended to enhance regulatory independence. Following our large-scale review of rules in 2019, we are now evaluating their effectiveness. The Board agreed the scope, which was informed by regulators’ views based on their experiences operating under the rules since 2019. We will soon write to regulatory bodies and approved regulators to seek evidence of the pros and cons of how the rules work in practice to inform our evaluation.
Ensuring regulation promotes the prevention and detection of economic crime
In light of the new economic crime-related regulatory objective that came into effect under the Legal Services Act 2007 earlier this year, we considered how the LSB could support regulators in meeting their obligation to promote the prevention and detection of economic crime. Our initial research has found that regulators are taking a variety of steps to promote the new regulatory objective, so our focus will be on providing regulators with clarification on how they can best achieve compliance and ensure consistency in approaches, where appropriate.
Over the next several months, we will collaborate with regulators and other relevant stakeholders to develop guidance that outlines how regulators are expected to demonstrate their alignment with the new regulatory objective. We hope to consult on the guidance outlining our expectations of regulators in Summer/Autumn 2024.
Our next Board meeting is on 11 June 2024.