Our first Board Meeting of the year focused on some of the projects and activities that will ensure we continue driving progress against the sector’s challenges during 2022 and beyond.
Legal technology: promoting innovation while managing risks
We started our discussion on technology and innovation by reflecting on the work that we and others are doing to foster innovation that helps to increase access to legal services.
Embracing the opportunities that technology offers requires a proactive approach by legal services regulators and several challenges being met. As outlined in our consumer-focused strategy for the sector, addressing those challenges will improve services and outcomes for people who need legal help and advice.
One of our key activities is working with the regulators to develop proposals to aggregate and make available regulatory information across the sector. This is how we have interpreted the ‘single digital register‘ of authorised persons and entities, as recommended by the Competitions and Markets Authority in its 2020 report on the legal sector. This collaborative endeavour is an important step in helping to ensure that good quality regulatory information is available to consumers, and the wider market.
We also continue to collaborate with others across the sector to foster responsible innovation. This includes supporting the LawtechUK Sandbox through our involvement in the Regulatory Response Unit (RRU) and understanding how emerging uses of technology are ‘socially acceptable’ to the public.
The Board considered how we use our regulatory levers to foster innovation that designs services around consumer needs. We acknowledged the importance of supporting the responsible use of technology that commands public trust, and the importance of continuing to work collaboratively with others in support of this aim. We agreed that while now is not the time to develop a statutory policy statement, we will keep this under review. We agreed there is value in clearly setting out what outcomes the responsible use of technology can achieve, and how regulators can support this. We hope that will give regulators a clear vision to coalesce and collaborate around.
We wrapped up our discussion on technology by agreeing how important it will be for our regulatory performance framework to take account of technology and innovation when we review it later this year.
Research collaboration projects: increasing standards across the sector
On the theme of collaboration, the Board was pleased that we had agreed a data-sharing agreement with Citizens Advice which will give us access to a range of real case data. This will be instrumental in our work on mapping the unregulated sector.
We’ve also completed surveys with the two main will-writing bodies. These research collaborations will give us a broader understanding of consumers’ legal needs and ensure we continue to make evidence-based decisions that increase standards across the sector and improve access to legal services.
Regulatory performance: enhancing transparency and improving performance
Following the publication of the Regulatory Performance Reports in December 2021, the Board discussed the LSB’s assessment of each of the regulatory bodies and their key areas of focus.
We noted the significant performance improvement from Costs Lawyer Standards Board (CLSB) and how it has turned around its regulatory approach since 2019.
Overall, we noted that several regulators need to demonstrate more transparently how their work promotes the regulatory objectives and improve accountability through better consultation and engagement.
We acknowledged that the red/amber/green rating system does not give the full picture of how a regulatory body is performing. This is one of the areas we will seek to address when we review the regulatory performance framework. The Board will be considering proposals for consultation on a revised regulatory performance framework in March.
Promoting equality, diversity, and inclusion in the legal sector
The Board considered the progress we are making on our wider equality, diversity, and inclusion (EDI) work.
We have increased our ability to hold regulators to account for properly considering EDI impacts when they develop policy. We have strengthened the requirements to demonstrate consideration of EDI in our new rules for changes to Regulatory Arrangements, approved in December 2021, and the revised Practising Certificate Fees (PCF) Rules, introduced in January 2021. Regulators must demonstrate that they have taken account of the impact of their proposals on different groups and, where appropriate, made changes to promote inclusion or mitigate a potential negative impact.
Collaboration is also a key theme when it comes to our EDI work. We are working with the regulators, BTAS, and the SDT on how we will work together to create a culture that encourages and values diversity, ensuring there is no unlawful or unfair discrimination or harassment. We plan to publish this later in the year.
Collaborating to tackle money laundering in the sector
We welcomed the Office for Professional Body Anti Money Laundering Supervision (OPBAS) to our meeting as part of our ongoing collaboration to address the inconsistent approach to complying with money laundering regulation in the sector. OPBAS is a business unit within the Financial Conduct Authority, and it has two key objectives: (1) to ensure a consistently high standard of AML supervision by the professional bodies; and (2) to facilitate information and intelligence sharing
We discussed how OPBAS’s remit applies to legal services regulation and agreed that we would continue to work closely together and take forward further work to develop greater information sharing and collaboration.
Our next Board Meeting is on 1 March 2022 and as our reserve meeting, will be a mixture of strategy and routine business.