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Law Soc attacks `cumbersome' Bill as Falconer proclaims `watershed'

BYLINE:

Ben Mitchell; ben.mitchell@incisivemedia.com

LENGTH:

412 words

The Government last week confirmed it was to press on with radical legal services reform despite mounting fears from professional regulators.

Announcing the draft Legal Services Bill, which comes seven months after the publication of a White Paper, the Lord Chancellor, Lord Falconer confirmed the Government's reforms, which were recommended in the 2004 report by Sir David Clementi.

As part of the shake-up, which promises to make the UK the most liberal legal market in the world, law firms will be able to attract external investment and set up alternative business structures. This will allow them to form practices with other professionals such as barristers and accountants.

The new structures will be subject to a strict vetting procedure, dubbed a `Fitness to Own' test, that will be run by frontline regulators such as the Law Society and the Bar Council. The move is expected to encourage supermarkets, banks and accountants to acquire legal practices.

Under the draft bill, the Government will also hand responsibility for regulation to a new £4m over-arching body, the Legal Services Board (LSB), which will be able to remove powers from underperforming regulators.

The LSB's remit promises to be one of the most controversial elements of the package. Notably, Law Society president Kevin Martin dubbed the bill as "cumbersome" and warned of the danger of Government interference with regulation, despite previous support for reform from Chancery Lane.

Bar Council chairman Stephen Hockman QC warned: "There are, quite rightly, a number of powers [the LSB] will need to have in the event that a regulator fails but it needs to be clear that the board should not be able to second-guess the legitimate decisions of a competent regulator or act in a way that is disproportionate."

The shake-up will also see the launch of a new independent Office for Legal Complaints (OLC), which will cost £23m to set up. Unveiling the package last week, Falconer said: "We, as a country, have an extremely successful legal system. but we know it is far from perfect. [These reforms] represent a real watershed."

The draft bill, which is expected to go through Parliament before the end of the year, will now be assessed by a 12-member joint Parliamentary committee, which is chaired by former Beachcroft senior partner Lord Hunt of Wirral.

The line-up includes MPs David Burrowes; Emily Thornberry; former solicitor David Kidney; John Hemming; Stephen Hesford and Michael Jabez Foster.

LOAD-DATE:

January 4, 2007

LANGUAGE:

ENGLISH

PUBLICATION-TYPE:

Magazine

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