Ministry of Justice
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Legal Services Act given Royal Assent
An independent body which will handle consumer complaints about legal services in England and Wales is now a step closer under new legislation approved today.
The independent Office for Legal Complaints, introduced under the Legal Services Act which received Royal Assent today, will remove complaints handling from lawyers and establish a new ombudsman scheme as a single point of entry for all consumer legal complaints.
The new body is part of radical reforms which will see services in the £20 billion legal sector undergo major changes to bring them in line with other professional services in the 21st century.
The Act also introduces an independent oversight regulator, the Legal Services Board, whose members will be recruited shortly.
Its provisions also enable greater consumer choice and flexibility in legal services by removing disproportionate restrictions on business structures, allowing lawyers and non-lawyers to set up businesses together for the first time ever, and enabling services in develop in new, consumer-friendly ways.
The new measures in full are:
* A single and fully independent Office for Legal Complaints (OLC) to remove complaints handling from the legal professions and restore consumer confidence.
* Alternative Business Structures (ABS) that will enable consumers to obtain services from one business entity that brings together lawyers and non-lawyers, increasing competitiveness and improving services. The Act will also allow legal services firms to have up to 25 per non-lawyer partners in the near future, before the full ABS regulatory structure is implemented, and will allow different kinds of lawyers to form firms together in the near future.
* A new Legal Services Board (LSB) to act as a single, independent and publicly accountable regulator with the power to enforce high standards in the legal sector, replacing the maze of regulators with overlapping powers. The chair of the Board will be a lay person.
* A clear set of regulatory objectives for the regulation of legal services which all parts of the system will need to work together to deliver, including promoting and maintaining adherence to professional principles.
These reforms come after long and careful research and consultation, with input from a large cross-section of people, including the Office of Fair Trading, consumer organisations, the legal professions, and consumers themselves.
Legal Services Minister Bridget Prentice said:
"After the huge amount of work that's been put in, I'm extremely pleased to see these reforms becoming law. The Act will mean consumers get legal services that are fit for purpose, increasing confidence in the system as a whole.
"These reforms are all about fairness to consumers, who will benefit, for example, from the new and independent OLC handling complaints about legal service providers and ensuring a quick and fair response.
"The new law also enables lawyers and non-lawyers to set up in business together, giving consumers a chance to get both legal and other services from a wide new range of providers.
"Some forms of alternative business structures, like legal disciplinary practices with up to 25 percent non-lawyer managers, will be able to emerge in the near future to enable consumers to get the benefit of the new changes as soon as possible.
"The Legal Services Board will replace the existing regulatory maze to oversee approved regulators. These regulators will also be required to separate their regulation side from their representation one to remove conflict of interest."
Notes for Editors
1. The Legal Services Act follows the publication of the draft Legal Services Bill in May 2006 and the White Paper, "The Future of Legal Services - Putting Consumers First" in October 2005.
2. In July 2003, Sir David Clementi was appointed to carry out an independent review of the regulatory framework for legal services in England and Wales. (DCA News release 310/03).
3. In December 2004, Sir David published a Report following his Review. The Government broadly accepted the main recommendations of the review. These were:
* A Legal Services Board - a new legal services regulator to provide consistent oversight regulation of front line regulators.
* Statutory objectives for the Legal Services Board, including promotion of the public and consumer interest.
* Front line regulators to be required to make governance arrangements to separate their regulatory and representative functions.
* The Office for Legal Complaints - a single independent body to handle consumer complaints in respect of all members of front line regulators, subject to oversight by the Legal Services Board.
* The facilitation of Alternative Business Structures that could see different types of lawyers and non-lawyers working together on an equal footing as well as providing for the possibility of external investment in the delivery of legal and other services.
The Legal Services Act builds on these recommendations.
4. Adverts for the post of Chair of the Legal Services Board are due to go out in November. It is envisaged that the Chair will be appointed by February 2008.
5. Further details are available at http://www.justice.gov.uk/publications/2388.htm
ENDS
