The Legal Services Board (LSB) says it accepts the 10 recommendations outlined in the the government’s Public Bodies Review, and has committed to setting out plans for a “significant” shake-up of its operations.
Writing in its response to the Public Bodies Review, the oversight regulator said it would focus its strategy on “stronger oversight to protect consumers and the public interest”, with more resources directed towards its oversight role.
The review, commissioned in the wake of regulatory failures including Axiom Ince and SSB Law and published in July of this year, said the organisation had “lost its way in recent years” and “fallen short” of government and parliamentary expectations.
It made 10 recommendations on the future of the LSB and wider regulation, including fostering greater collaboration amongst regulators, creating a shared framework for identifying consumer risk and an organisational “reset” of its priorities and strategic purpose.
Commenting on the LSB’s response, Chair Monisha Shah said the organisation accepted all the recommendations of the Public Bodies Review.
The response includes details of the work already underway in response and the timetable for further action.
A reset of its strategic purpose will entail delivering a more “targeted risk-based oversight” over the strategic period between 2027 and 2030, the LSB will review priorities in response to market changes and evidence of emerging risks, it says.
A commitment to improving effectiveness of the regulatory framework will be addressed through cross-system data and intelligence.
Another key focus, it revealed in its response to the review, will be putting public benefit and consumers at the centre of its work.
Strengthening consumer protection and redress through its oversight of, and collaboration with, frontline regulators and the Office for Legal Complaints (OLC) will be a priority to drive up standards in complaints handling and increase transparency.
Meanwhile the LSB has pledged to support the Legal Ombudsman’s latest transformation, with a goal to help resolve complaints quickly and effectively, as well as to use its regulatory powers to “encourage innovative technology”, making legal services “more accessible and affordable to consumers”.
In efforts to have a more effective oversight and clearer accountability, the regulator has stated it will implement a new “risk-based approach” to regulatory oversight, directing scrutiny where it is most needed.
One action it has already as of October, is establishing a Challenge Panel on regulatory oversight which will inform a formal Board Regulatory Oversight Committee in 2027, drawing on expertise of regulators from other sectors.
Alongside this, it stated it will now be “accountable for its own effectiveness” and will set out the results it seeks and measure its own progress, while being openly transparent about decision-making.
An expert review will be commissioned to assess the effectiveness of the LSB’s oversight approach, and an external board effectiveness review will “strengthen Board oversight, accountability and responsibility for delivery”.
In response to the Public Bodies Review recommendations of taking action earlier on risk, the LSB has said it will combine regulatory intelligence with evidence of consumer experiences to help spot “emerging risks” sooner.
It will also look to strengthen skills and systems for analysing data to enable it to spot patterns and changes in the market that could “signal future harm”.
A collaborative effort will be made between frontline regulators and the MoJ to approach risk assessments, it said.
The LSB acknowledge the commitments outlined require “significant change” in how it operates with a new operating model with “a dedicated oversight directorate, separating our enforcement function from our wider strategic policy and convening role which has enabled us to direct more of our resources towards oversight.” Developments in the pipeline including horizon scanning, data gathering, evaluation and monitoring and improved programme management.
Recruitment will focus on targeting those with “specialist skills” as well as investing in training for existing employees and introducing new systems to achieve the goals outlined within its response.
“The Legal Services Board is committed to effective regulation in the public interest” concluded Shah. “We will prioritise our work more sharply on stronger oversight to protect consumers. Our strategic objective will be to focus on areas of greatest harm to consumers and where regulation can make the most difference.
“To that end, we will use our convening abilities to foster a shared understanding of cross sector risks and challenges, using data and evidence to make the regulatory system more effective. The PBR recognises that success will depend on co-ordinated change at multiple levels. We intend to play our part in bringing about a system-wide transformation of legal service regulation.”
Commenting on the LSB’s response Law Society of England and Wales president, Brett Dixon said: “The independent review of the LSB was right to conclude that the LSB should focus on its core oversight role, which is something we have long called for. We welcome the government’s support of this recommendation and its recognition of the vital importance of the legal services sector both to the justice system and the economy.
“Effective oversight helps protect consumers, maintain confidence in legal services and ensure frontline regulators are equipped to tackle emerging risks.
“The Law Society will work with the government to ensure the voice of the profession is heard in any comprehensive review of the regulation of legal services.”
CILEX Chair Eileen Milner added:“The government has rightly accepted the need for a reset and refocus of the LSB, accepting all the recommendations of the Lloyd review.
“As oversight regulator, the LSB is in a unique position to bring together key players from across the legal sector to work collectively to improve legal services and drive clarity and consistency, while reducing duplication of effort. It must listen to those it regulates and be open to hearing from approved regulators who have a unique position in the system and can shine a spotlight on issues that only the LSB can tackle.
CILEX looks forward to playing its part in the planned review of the regulation of legal services, working alongside other professional bodies to voice the concerns of our members. The current regulatory framework is no longer fit for purpose and reform is critical if we are to protect and meet the needs of consumers, with effective regulation that enables rather than hinders a thriving legal sector.”
One Response
𝗗𝗶𝗱 𝘁𝗵𝗲 𝗟𝗲𝗴𝗮𝗹 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀 𝗔𝗰𝘁 𝗰𝗿𝗲𝗮𝘁𝗲 𝘁𝗵𝗲 𝗽𝗿𝗼𝗯𝗹𝗲𝗺𝘀 𝘁𝗵𝗲 𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝗻𝗼𝘄 𝘄𝗮𝗻𝘁𝘀 𝘁𝗼 𝗿𝗲𝘃𝗶𝗲𝘄?
The Government says its comprehensive review of legal services regulation is needed because the market has changed since 2007. That is true, but it is only half the story. Much of that change was set in motion by the Legal Services Act itself.
The Act opened the market to alternative business structures and outside ownership. It left large areas of legal work outside the reserved activities. It placed a series of approved regulators under a single oversight body, resulting in duplication and unclear accountability that the Ministry of Justice now accepts. The pressures the review describes, from complexity and regulatory boundaries to the strain on SME firms, are in significant part the foreseeable consequences of the Act’s own design. Only AI and lawtech are genuinely new.
So the review cannot treat the 2007 settlement as a fixed point and ask merely how the market might be made to fit it. It must ask whether the settlement itself served the public interest, and whether the Act’s eight regulatory objectives, none ranked above another by Parliament, have been balanced in practice. Consumer protection is vital. So are the rule of law, independence, and integrity, on which public trust in legal advice ultimately rests.
Those who designed the 2007 framework, and those who have defended it since, should be the first to welcome that scrutiny. A settlement confident of its merits has nothing to fear from being examined.
I welcome the Bar Council’s call for an evidence-based review that preserves what works. I know it will hear fully from the small and medium-sized law firms that carry the heaviest regulatory burden and deliver much of the work the public actually uses.
The Law Society must now go back to its roots, reassert its confidence, and recover what it lost in 2007. Only a genuine review that examines causes as well as symptoms will be worthy of support from the profession.