by the Secretary of State for Constitutional Affairs and Lord Chancellor
Lord Falconer of Thoroton
On 15 December 2004, I informed the House that the Government welcomed Sir David Clementi's report on the regulation of legal services in England and Wales and broadly accepted his main recommendations.
Today I am pleased to be placing in the Libraries of both Houses a White Paper setting out the Government's proposals for the regulatory reform of legal services in England and Wales. Our proposals are consumer focussed and are the result of discussion with key stakeholders, and in particular consumer groups. I am especially grateful to representatives of Citizens Advice, the Equal Opportunities Commission, the Federation of Small Businesses, the National Consumer Council, and Which? who comprise the Consumer Advisory Panel which I established in March to advise the Department in developing our proposals for reform.
The Government is committed to putting in place a regulatory framework that puts the interests of the consumer first. A framework that will encourage more competition, innovation and transparency in the provision of legal services, but also one which will safeguard the independence and reputation of the legal professions.
The White Paper sets out the detail of our proposals. These include a Legal Services Board, an Office for Legal Complaints and the facilitation of alternative business structures for the delivery of legal services. It also provides for all partners in the regulatory framework to have statutory objectives and principles.
We will remove the existing “maze” of oversight regulators by establishing a single, independent and powerful oversight regulator, the Legal Services Board. The Board will authorise new Front Line Regulators provided they meet its regulatory standards, including a requirement for the separation of their regulatory and representative functions.
Appointments to the Legal Services Board will be made on merit by the Secretary of State for Constitutional Affairs. Non-lawyers will be in the majority.
The Legal Services Board will be required to establish and maintain a Consumer Panel to ensure that consumers' views are heard. Appointments to the Panel will be on merit, and in accordance with the rules of the Office of the Commissioner for Public Appointments.
We will also build consumer confidence in the handling of complaints about lawyers by creating a new and independent Office for Legal Complaints. This Office will provide a single point of entry for all consumer complaints. It will be chaired by a non-lawyer, with non-lawyers in the majority. The Office will provide quick and fair redress to consumers in all circumstances. It will be independent in the handling of complaints and will ensure a consistency of approach. The Office will also refer any potential issues of misconduct to the front line regulator concerned for disciplinary action, monitoring the decisions made.
The Government also proposes the facilitation of alternative business structures that may be used to deliver legal and certain other services. These new structures will enable different kinds of lawyers, and lawyers and non-lawyers, to work together on an equal footing. They will permit external investment. Through access to low cost capital and new skills these reforms will foster greater competition and innovation and enable providers better to respond to the demands of consumers. In this new environment consumer protection will be paramount and our proposals provide a range of important safeguards that will ensure the interests of the consumer are properly protected.
This White Paper confirms the Government's intention to put consumers at the heart of the delivery of legal services. In the months to come we will continue to work closely with consumers, the legal professions and other stakeholders to ensure that this becomes a reality.