Draft Legal Services Act 2007 (Approved Regulator) Order 2023
(3 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Justice (Mike Freer)
I beg to move,
That the Committee has considered the draft Legal Services Act 2007 (Approved Regulator) Order 2023.
It is a pleasure to serve under your chairmanship, Mr Sharma. Before I set out the effect of this instrument, I will explain the legislation that underpins it. The Legal Services Act 2007, which I will refer to as the LSA, established the Legal Services Board among other things. The LSA made provision for the Legal Services Board to oversee legal services regulators in England and Wales, which regulate persons carrying out reserved legal activities.
Schedule 4 to the Act designated a list of bodies as approved regulators for specific reserved legal activities including probate activities. The Legal Services Act 2007 (Approved Regulators) Order 2009 added the Association of Chartered Certified Accountants, which I will refer to as the ACCA, to this list for the regulation of probate activities. Although it was designated in 2009, the ACCA only started to authorise individuals and firms for probate activities in 2018. In 2019, the ACCA conducted a review of its regulatory activity and found that only 99 probate practitioners held the ACCA authorisation, and the ACCA considered it unlikely that its regulated population would grow.
The review also found that the arrangements that the ACCA would need to make to comply with the Legal Services Board’s internal governance rules of 2019 would be disproportionate to the size of the ACCA’s regulated population, and that there were several monetary costs to being an approved regulator. Specifically, those included: levies paid to the Legal Services Board and the legal ombudsman; staff resources to conduct regulation; costs associated with the regulatory framework; and the cost of complying with the Legal Services Board’s internal governance rules.
In 2019, the ACCA council approved a plan for the ACCA to withdraw from the legal services regulation market and provide a pathway for eligible members to continue practising probate by transferring to CILEx Regulation as CILEx-ACCA probate practitioners. In October 2021, the ACCA applied to the Legal Services Board under section 45 of the LSA to cancel its designation as an approved regulator. The LSB carefully assessed the application and required the ACCA to make a revision to confirm that all of the 99 ACCA-regulated probate practitioners had already ceased practising probate or had transferred to CILEx or another approved regulator. The LSB then approved the application in May 2022, and made the recommendation to the Lord Chancellor in July 2022 to make an order to cancel the ACCA’s designation as an approved regulator for probate activities. That is what this statutory instrument sets out to complete.
The ACCA has not accepted a new application for probate authorisation since 2021, and sent cessation letters to all 99 affected probate practitioners in January 2022. All those 99 practitioners have either ceased practising probate or already transferred to CILEx Regulation or another approved regulator. In conclusion, cancelling the ACCA’s designation as an approved regulator for probate activities is a necessary measure to formalise the ACCA’s voluntary and orderly withdrawal from the legal services regulation market. It ensures that the ACCA will no longer face regulatory or financial burdens associated with its designation and provides legal certainty about which entities are approved regulators for reserved legal activities.
Alex Cunningham (Stockton North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Sharma. I thank the Minister for outlining the measure before the Committee. I will not keep colleagues very long, as we do not oppose it.
We all know of the stress on our legal services and on those providing them; anything that can be done to make them better will have our support. A well-functioning legal services market is a key contributor to access to justice. A strong and competitive legal services market can lead to a reduction in the price of services and ensure greater access to justice for all, including the least well off.
The Minister outlined a measure to amend the Legal Services Act 2007—the legislative framework for regulating legal services in England and Wales. Under the 2007 Act, only individuals and businesses authorised by an approved regulator or those exempt from the requirement to be authorised are entitled to provide reserved legal activities. The six reserved legal activities are: the exercise of a right of audience; the conduct of litigation; reserved instrument activities; probate activities; notarial activities; and the administration of oaths. This order cancels the designation of the Association of Chartered Certified Accountants as an approved regulator under part 4 of the Act, “Regulation of Approved Regulators”. That means that it is no longer permitted to authorise and regulate persons in relation to probate activities. The Minister outlined its small workload in that regard.
As I said, we will not oppose the measure, but we would be interested to hear whether the Minister expects further measures to be introduced to reform the Legal Services Act. The merits of the Act are heavily debated by those inside Parliament and even more so by those outside. As legislators, we need to ensure that practices and services are kept up to date. We recently had Bar Council chairman Nick Vineall KC in front of the Justice Committee. He described the 2007 Act as “fit for purpose” but pointed out that there was originally supposed to be a triennial review of the Legal Services Board. That has not happened. Does the Minister plan to review the LSB any time soon?
We do not oppose the order but hope that everyone in the Committee will recognise that much needs to be done by working with the sector to drive not just improvement, but capacity.
Mike Freer
I am grateful for the support of colleagues and Opposition Members. I suggest that the comments of the hon. Member for Stockton North on a wider review of the LSB is a tad out of scope of the statutory instruments, but I am more than happy to have a conversation with him. Given the consensus on this draft statutory instrument, I commend it to the Committee.
Question put and agreed to.