November marked our last Board meeting of 2023. It was a forward-focused session, looking at our plans to continue delivering our strategy through our business plan for 2024/25. Our aim remains to ensure people and small businesses can access high-quality legal services that better meet their needs.
Ahead of the meeting, we were joined by Dan Neidle, a tax lawyer and commentator who spoke to the Board on legal professional ethics, with a particular focus on strategic lawsuits against public participation (SLAPPs). We heard a compelling account of how the conduct of lawyers and the actions they take when acting for clients are critical to upholding the rule of law, and how the public interest is harmed when lawyers fall short of the high standards the public has a right to expect.
Mr Neidle gave us much food for thought as we consider the extent to which regulators may need to adapt their regulatory infrastructure to address any weaknesses to clarify, support and incentivise professional ethical practices by lawyers and law firms.
We will be engaging with many stakeholders throughout our programme of work on professional ethics and the rule of law, and we look forward to exploring the issue at the Reshaping Legal Services conference on 7 March 2024.
Delivering our strategic vision: LSB draft business plan 2024/25
Our draft business plan and budget for 2024/25 set out our proposal to strengthen our direct oversight of regulators’ performance in response to clear feedback from stakeholders last year. We are also predicting a significant increase in the volume of demand-led work, for example, in relation to proposals by CILEX to delegate its regulatory functions to the Solicitors Regulation Authority.
The draft business plan also sets out our plans to progress key policy work programmes under way in 2023/24. That includes maximising the impact of regulation in creating a more diverse and inclusive legal sector and ensuring that regulation supports high standards of professional ethical conduct. This will include supporting the new regulatory objective by ensuring regulators are taking appropriate action to detect and prevent economic crime in their regulated communities and continuing to address the role of regulation in improving access to justice and reducing unmet legal need. There was an interesting discussion around the role of civil litigation funding in addressing access to justice challenges and we agreed to look at this as part of our work in this area.
In order to deliver the business plan, and especially to secure the resilience needed to respond to demand-led issues, we will need to increase our resources. We agreed to consult on a proposed budget of £5.329m for 2024/25. This would represent an increase of £650k on last year’s budget (£4.679m). When adjusted for inflation (CPI 6.7% as of September 2023), it is a real terms increase of 7.2%.
We think this is the level of resourcing we need to respond effectively to the challenges the sector is facing, to fully support our oversight function and increase our ability to identify and address emerging issues sooner, limiting detrimental effects to consumers. As always, we are committed to working with the regulators to improve outcomes for consumers and the public.
Board members supported the proposed increase in resources, but we are keenly aware of the importance of making clear how it would be utilised and ensuring value for money.
We will launch a consultation on the draft business plan and budget from early December and will be convening a stakeholder event, open to all, in January 2024. In March next year the Board will consider carefully the feedback we receive from the consultation and approve a final business plan and budget for 2024/25.
OLC draft budget 2024/25 and mid-year progress review
The Board also considered the Office for Legal Complaints’ (OLC) draft budget and business plan for 2024/25. The OLC is the board of the Legal Ombudsman (LeO), and the LSB must approve its annual budget. This was an early discussion ahead of the Board being asked to consider approval of the OLC budget in March next year. We began by reviewing LeO’s progress over the past year. We heard from the OLC Chair, Elisabeth Davies, and LeO’s Chief Ombudsman, Paul McFadden, about continued progress in a number of areas. The Board was pleased to hear of the sustained confidence LeO has fostered with key stakeholders due to its improvements in case management and customer experience.
We discussed the continued increase in underlying demand that LeO is observing, partly attributable to premature complaints being made to LeO or, unfortunately, poor first-tier complaints handling by providers. In the future, LeO aims to play a greater role in improving standards of service and complaints handling in the sector by sharing insights from its work, which will help target some of the root causes of these issues. We also noted alignment with the LSB’s work to improve first-tier complaint handling, which we have recently been consulting on.
The Board was concerned about the continued high staff attrition at LeO. Competition on salaries from other ombudsman organisations was cited as a challenge to retaining staff.
We discussed solutions to reduce staff turnover, including highlighting LeO’s vital work around complex cases and increased flexibility in working patterns for staff. OLC noted our intention to reflect more deeply on this issue at a workshop in February next year.
Turning to the OLC’s budget proposals for 2024/25, the Board heard that the proposed uplift in budget was driven essentially by inflationary pressures and the delivery of more insight and impact work. The Board acknowledged LeO’s concerns around the potential of an in-year budget request in response, should the increase in demand continue, and that OLC and LeO colleagues will keep a close eye on relevant indicators. We will work with them on this.
Axiom Ince
The Board noted the executive team’s significant engagement with the Solicitors Regulation Authority concerning Axiom Ince.
Governance matters
We also used the last meeting of the year to review our corporate risk register alongside the Corporate Governance Manual. This is an annual exercise and a matter of good housekeeping. Both contribute to ensuring we are well-run and uphold high standards of governance.
I want to round off my last blog of the year by extending my thanks to the tremendous LSB team and to all who have collaborated with us over the year just ending – we look forward to continuing to progress our mission to deliver fairer outcomes, stronger confidence and better services.
The next Board meeting will take place on 23 January 2024.