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Wish list for the review

19 February 18

The Law Society of Scotland has presented its recommendations for reform to the independent review of legal services regulation. Here it summarises its approach and its main recommendations

Change has been a constant feature for the legal sector in recent years. While solicitors have readily adapted to meet the needs of their clients, the current regulatory regime for legal services in Scotland is still rooted in legislation introduced almost 40 years ago. It is struggling to keep pace and is, put simply, not fit to meet the demands of today’s legal market.

That is why the Society has called for a new, flexible legislation which will allow the development of a regulatory framework that addresses the challenges of modern legal practice and puts protecting consumers at its core. Amending existing legislation or new, prescriptive legislation on its own would quickly become outdated.

In its paper The Case for Change: Revisited,submitted to the independent review of legal services regulation in Scotland, which is due to report in the summer, the Society sets out a number of recommendations it believes will improve the current regulatory system.

There is a strong economic case for the Society being able to seek to become a regulator of legal services beyond Scotland. Its aim in seeking these powers is to be able to apply to the Legal Services Board to be a regulator. To do this would need an amendment to the 1980 Act or – as the Society hopes – wholly new legislation to make this application. This would open the door to firms operating both north and south of the border that would be attracted by the option of coming under the oversight of a single cross-border regulator, creating the potential for the Scottish market to be more competitive and attractive in terms of inward investment. The paper also calls for the ability to regulate firms on an entity basis, extending the firm-wide regulation already carried out in relation to financial compliance and anti-money laundering to ensure there are robust public protections in place.

The Society also believes that a new regulatory framework is needed to address the unregulated legal advice sector. It is aware that many consumers who believe they have obtained advice from a qualified, regulated legal professional, only find out they have no recourse to redress when things go wrong. Additionally the term “lawyer” should be protected. While practising as a Scottish solicitor entails years of study, annual CPD, professional indemnity insurance and regulation, which maintain high professional standards, there is no such requirement for anyone calling themselves a lawyer. From recent research we know that the public don’t see a difference between solicitor and lawyer, and making it a protected term would offer better protection for those seeking advice.

The ability to open up new membership options to other legal professionals, such as paralegals and legal technicians, would improve standards across the sector and enable better career development for others working within it.

Fewer than 1% of transactions carried out by the legal profession result in a complaint. However, it is still important to streamline the current complaints system, which for many is slow and overly bureaucratic. The Society recommends simplifying the current system so that, while the Scottish Legal Complaints Commission would continue to handle service complaints and the Society would deal with all matters of professional discipline of Scottish solicitors, either organisation could receive complaints and pass on those relevant to the other body. This would create a simpler, speedier and more cost-effective process. It is also calling for an independent legal ombuds to oversee the system as a whole, simplifying the appeals process and make it much less costly than the current process of taking appeals to the Court of Session.

The submission is ambitious in its scope and the Society will continue to press for a modern, flexible regulatory framework to provide the necessary agility and capability for it to respond to future events and ensure consumer confidence in legal services and the profession in the long term.

The full paper can be read on the Society’s website. The review has issued a call for evidence, with a deadline of 30 March 2018: see this article from the January 2018 issue of the Journal

Summary of recommendations

  • The repeal of the Solicitors (Scotland) Act 1980 and those parts of the Legal Profession and Legal Aid (Scotland) Act 2007 which relate to the regulation of legal services, and the introduction of new enabling and permissible legislation for the regulation of legal services in Scotland and the Scottish solicitor profession, with the flexibility to move with the times and allowing for proactive regulation to ensure consumer protections remain robust.
  • Amending those sections of the Legal Services (Scotland) Act 2010 that relate to the regulation of legal services and the Scottish solicitor profession to address the difficulties in interpretation and application.
  • A new regulatory framework allowing the flexibility for the Society to seek approval from the Legal Services Board to be an authorised regulator for those multinational practices operating in Scotland.
  • That any new regulatory framework makes provision for the regulation of legal services provided remotely by artificial intelligence.
  • Retaining an independent professional body for the regulation and professional support of the Scottish solicitor profession.
  • Retaining a separate and independent discipline tribunal for decisions in serious cases of professional misconduct.
  • That all legal service providers providing services direct to the consumer be regulated, strengthening consumer protections and enhancing consumer confidence in the Scottish legal sector.
  • That the term “lawyer” be a protected term, in the same way as “solicitor”, and only those able to demonstrate recognised legal qualifications, and who are regulated, are permitted to use the term.
  • That primary legislation provides the permissible powers for the Law Society of Scotland to extend entity regulation to those firms wholly owned by solicitors.
  • That a new system for dealing with complaints about legal services and solicitors is introduced, recognising the paramount aim to protect consumers.
  • That primary legislation provides for the permissible power for the Law Society of Scotland to open up membership to non-solicitors.

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