LSB pushes legal regulators to put consumers first following BSB governance review


Today, the Legal Services Board (LSB) published the findings of its review of the Bar Standards Board (BSB) under the ‘Well-led’ standard of the LSB regulatory performance assessment framework. The oversight regulator found concerns about leadership and governance at the BSB and little evidence of a focus on the needs of consumers and the public interest. In response, the LSB has urged the BSB and the other legal regulators to ensure the regulatory objectives are central to their decision making.

The BSB was unable to demonstrate meaningful consideration of the regulatory objectives when its Board took the decisions examined in the review.

The overarching finding was that:

“It was difficult to be assured by the material of the BSB Board’s focus on its statutory duty to protect and promote the interests of consumers, or the duties to improve access to justice and increase public understanding of the citizen’s legal rights. As a result, we are concerned that the BSB allowed the interests of the public and consumers to be outweighed unduly by those of the profession when taking key decisions.”

The LSB also found:

  • The decision-making process for major decisions did not follow the BSB’s own procedures, such as the BSB’s risk policies.
  • On several occasions, the Board was not provided with sufficient information to support key regulatory decisions. For example, when it decided in March 2019 to withdraw funding from Legal Choices (1), the BSB Board did so without any specific materials to support its discussion.
  • The BSB’s stakeholder engagement strategy has not been effective in building partnerships with its target organisations.
  • The governance architecture is fragmented and difficult to access.

Dr Helen Phillips, Chair of the LSB, said:

“Robust leadership and strong governance are central to effective decision-making and to building trust among the public and the profession.

“The fact that the BSB has accepted our findings and developed an action plan to address our concerns is a further step towards independent regulation truly in the public interest.

“I hope the leadership at the BSB, and at the other regulators, learn from this report. We expect to see the BSB make the changes needed quickly so the public and the profession can be confident the regulator is well-led, consumer-focused, and uses learning to improve performance.”

Matthew Hill, Chief Executive of the LSB, said:

“We initiated this review because we had concerns about leadership and governance at the BSB. We found shortcomings in the governance of the BSB and the effectiveness of the Board’s decision-making.

“We expect decisions made by all the regulators to be evidence-based, promote the regulatory objectives, and protect the public interest. For the key decisions we looked at in this review, we found the BSB was unable to show how it had achieved this and, as a consequence, it could not demonstrate that its decisions were in the public interest.

“Going forward the BSB has committed to putting the regulatory objectives at the heart of its decision making and to demonstrate how it is doing so. We will monitor its progress in delivering against its action plan and our performance framework.

“There are lessons here for all the legal services regulators. We encourage them all to note the findings of our report and to review their decision-making processes in the light of our findings.”

Documents

Notes to editor

(1) Legal Choices is a website and social media platform that provides independent, objective and factual information about legal services to consumers and the public, which was jointly funded by all legal service regulators up to the point that the BSB exited the partnership.

About the review

  1. All legal regulators have the same responsibilities under the Legal Services Act and are assessed by the LSB against five standards under the regulatory performance assessment framework. Under the Well-led standard of the performance framework, regulators must show the leadership, capability and capacity, and appropriate corporate governance to manage their organisation effectively. They must also demonstrate a culture that encourages and uses learning to improve performance and promotes a transparent and consumer-focused environment.
  2. In March 2020, the LSB determined that a review under the Well-led standard was necessary due to ongoing concerns centred on the leadership and governance within the BSB in making sound decisions and acting in a way that is compatible with the regulatory objectives. The performance framework provides for a more in-depth review when ongoing monitoring identifies that we do not have sufficient assurance about an area of a regulator’s performance or identifies an area as one of concern.
  3. Through the review, the LSB sought assurance that the BSB had decision-making processes that were effective and informed by appropriate evidence; take account of the likely impact of the decisions on the regulatory objectives and, in particular, the public interest (including the interests of consumers); and have regard to the Better Regulation Principles to be transparent, accountable, proportionate, consistent and targeted.
  4. The specific decisions reviewed as part of this review were the BSB’s decision to withdraw funding from Legal Choices; decisions related to its Public Legal Education (PLE) activities; work to introduce transparency standards and the modernising regulatory decision-making work programme.
  5. The findings are drawn from the material that the LSB requested from the BSB under section 55 of the Legal Services Act 2007, including documentation on the BSB’s governance arrangements and information on three work programmes. The LSB also interviewed BSB Board and senior management team members and observed a BSB Board and an Executive meeting.
  6. To minimise the burden of data collection on the BSB, the review focused on the BSB’s decision-making processes over two years, between April 2018 and March 2020. Detailed information about the bakground to the review and the process followed, including the lines of enquiry, can be found in Annex A of the report.