- The LSB is required by Part 3 of Schedule 4 to the Act to review and grant or refuse applications by approved regulators for approval of alterations to their regulatory arrangements.
- Paragraph 25(3) of Schedule 4 to the Act provides that the LSB may refuse an application only if it is satisfied that:
- granting the application would be prejudicial to the regulatory objectives in section 1 of the Act
- granting the application would be contrary to any provision made by or by virtue of the Act or any other enactment or would result in any of the designation requirements ceasing to be satisfied in relation to the approved regulator
- granting the application would be contrary to the public interest
- the alteration would enable the approved regulator to authorise persons to carry on activities which are reserved legal activities in relation to which it is not a relevant approved regulator
- the alteration would enable the approved regulator to license persons under Part 5 of the Act to carry on activities which are reserved legal activities in relation to which it is not a licensing authority, or
- the alteration has been or is likely to be made otherwise than in accordance with the procedures (whether statutory or otherwise) which apply in relation to the making of the alteration.
- The designation requirements referred to above are set out in paragraph 25(4) of Schedule 4 to the Act and are:
- a requirement that the approved regulator has appropriate internal governance arrangements in place
- a requirement that the applicant is competent, and has sufficient resources to perform the role of approved regulator in relation to the reserved legal activities in respect of which it is designated, and
- the requirements set out in paragraphs 13(2)(c) to (e) of Schedule 4, namely that the regulatory arrangements are appropriate, comply with the requirements in respect of resolution of regulatory conflict (imposed by sections 52 and 54 of the Act) and comply with the requirements in relation to the handling of complaints (imposed by sections 112 and 145 of the Act).
- In accordance with paragraphs 20(1) and 23(3) of Schedule 4 to the Act, the LSB has made rules[1] about the manner and form in which applications to alter regulatory arrangements must be made. The LSB has also issued, guidance on the Rules under section 162 of the Act[2].
- If the LSB is not satisfied that one or more of the criteria for refusal under paragraph 25(3) of Schedule 4 are met, it must approve in whole or in part, the application.
[1] LSB’s Applications To Alter Regulatory Arrangements Rules 2021
[2] The Guidance on the Applications To Alter Regulatory Arrangements Rules 2021