Rules and boundaries

Regulation of the legal profession should be independent of the profession, and should be tested against internationally recognised consumer principles. So stated Esther Roberton’s report, published last autumn, following her independent review.

Such a move would cut out the large chunk of the Law Society of Scotland’s functions currently exercised by, or under the supervision of, its Regulatory Committee, set up in 2011 as independent of, though reporting to, the Society’s Council. 

Craig Cathcart, who took over as committee convener in January this year, labels himself “an academic to trade, with a background in consumer protection”, his areas of interest including several with a legal or regulatory aspect. So he might be expected to be sympathetic to the Roberton proposals.

Staking out independence

Not so, it appears. “One of the things where I thought the report generally left me scratching my head was in terms of the relative thinness of the evidence base, if I might say that,” he observes. “Given that it went on to propose a fairly dramatic change, I think you need to have some strong evidence that something is not working in the current system. And I didn’t see any real empirical case being made that the current system was failing in regard to the consumer principles or anything else.”

All the same, how independent can his committee really be? “Obviously there is a measure of self-regulation by the Society, but what I can say is that the committee takes very seriously its mission to act independently and to think and deliberate in an independent way, and we have real evidence of that in action over the short time that I have been convener.” 

He continues: “Independent does not mean pro-consumer; it does not mean pro-profession either. Independent genuinely means having a set of principles of what we think is effective regulation and always working in line with them to try and achieve that mission of public confidence.”

A member of the Regulatory Committee since 2013, how would Cathcart chart its progress? Paying tribute to the leadership provided by Carole Ford, his predecessor as convener, he believes first of all that it has made strides in securing consistency of practice across the numerous subcommittees dealing with the likes of admissions, client protection and professional conduct. Thus, despite their differing functions, they each define their role and remit, set their KPIs (key performance indicators), and how to account for their activities. Alongside that, Cathcart and his colleagues are looking at the bigger picture, “to really get a sense of what is it the Society wants to achieve in terms of effective regulation and what we can do as a key component in its regulatory architecture”.

Strategic thinking

Its current priorities are partly reactive and partly proactive. The former mainly focus on the follow-up to Roberton, which has “really heated up” this year: the Scottish Government is looking to see what can be achieved ahead of primary legislation; a working group has been set up on the key features of regulation; and the Competition & Markets Authority has embarked on its own study into whether competition in the legal services market would be improved by the Roberton proposals. 

Proactively, Cathcart would like the Regulatory Committee to develop more of a sense of strategy, “to understand and personify what the Society wants to achieve as an effective regulator, and always to be ahead of the curve about what is developing good practice in legal services regulation”. That means always thinking “in a spirit of continuous improvement and development, so welcoming fresh thinking, innovation, new ideas”. Beyond that, “I would like there to be a greater awareness of and understanding of what the Regulatory Committee does and where it sits in the overall structure of the Society. And that’s messaging for the profession and also for the general public and indeed for policy makers and other stakeholders.”

While not accepting that Roberton has made out the case for change, Cathcart does acknowledge further scope for ensuring that the consumer perspective is properly heard. And although his committee is 50% solicitor and 50% non-solicitor, he is clear that non-solicitor is not synonymous with consumer, and it does not have the same exposure to the consumer viewpoint as it does to the profession. Thus it is exploring whether an equivalent of the Scottish Legal Complaints Commission’s consumer panel, or other representative group, would provide the necessary resource for it to make better informed decisions.

Meanwhile there is the CMA inquiry to engage with. While the CMA has previously expressed its support for Roberton’s guiding principle of independent regulation, Cathcart hopes its conclusions will reflect its recognition, in its response to her consultation, that professional independence means that legal regulation needs to be treated as a special case.

“It is recognised by the United Nations, by the International Bar Association and others, that actually the importance of an independent legal profession for the rule of law and for good governance in a well run society is such that it means you cannot treat the regulation of lawyers on a simple cut and paste basis with the regulation of other professions: there are other dimensions to the work that lawyers do, speaking truth to power, challenge to authority and so on, that mean that however they are regulated, they need to be independent of Government and the arms of the state.”

Government dialogue

It is expected on all sides that it will be after the next Scottish Parliament elections before any time is found for the primary legislation that would be needed for most matters arising out of the Roberton review. Meantime the Government is in dialogue with the Society, Faculty and the SLCC on what can be done by way of “quick fixes”, to try and make the complaints process – in relation to both service and conduct complaints – more efficient within the bounds of delegated legislation.

Beyond that, the Government announced in June that it would continue dialogue in an attempt to achieve consensus as to the way forward – despite the polarised views in play. Cathcart understands that other stakeholders such as consumer bodies will be brought in on particular aspects, and suggests that might encourage “some fresh thinking about what we might be able to do better and what we can perhaps learn from other jurisdictions and other people’s experience. It will hopefully then serve as the initial part of a reform process that will take on board and allow for change in some of the areas that Council, and my own committee, recommended in our responses to the review”.

The limits of rule-making

For now, the Regulatory Committee has much also to grapple with at the practice rules level. But one thing Cathcart insists it takes very seriously is the principles of good regulation. “The one I would highlight is the notion of proportionality. We are very aware that members of the profession often say they feel burdened by regulation. Conceptually regulation is interference in otherwise lawful business activity, so there has to be a good rationale for any interference where people are just trying to earn a living. 

“We want to reassure the profession that we are not simply trying to create rules for the sake of creating rules. We want effective regulation to make sure there are the highest standards of performance in the profession and that there is public confidence in legal services practitioners, but that doesn’t necessarily mean we have to come out with new rules all the time or that we endorse rules that are proposed by our subcommittees or other parts of the Society.”

He gives the example of reporting by firms on the various Equality Act indicators. The voluntary reporting encouraged by the Equality & Diversity Committee has not met with great takeup, and the committee has mooted a rule based approach. “But that is a compliance cost on businesses, and so rather than simply say ‘you’re right, because there is a laudable purpose behind this’, we have asked that we think again about how this might be achieved through means that can reduce the compliance cost on members.” 

Another is the move for price transparency to assist consumers and increase competition. “Again the easiest tool to reach for in the box is a rule, but a rule is prescriptive and then from the regulator’s point of view you have to say, what if people find the rule is difficult to comply with, what are the sanctions and so on, and you can just get yourself into a real burdensome mess there. So I’m really pleased that there is no push I think from anyone in the Society, on Council or a committee, to effect a rule. We think actually that encouraging best practice and guidance through helpful positive information and illustrative examples and so on is the way to try and achieve that, and hopefully boost the profession by increasing public confidence through giving them better pre-purchase information.”

Ideally, he would even favour a thinning out of the rulebook, through regular reviews of selected chapters to see whether they were still relevant and necessary – though he does not underestimate the scale of such a task. “I don’t directly command resources; I’m part time convener of a committee that consists of volunteers, so that’s a conversation that I need to have with the wonderful professional staff here at the Society. But certainly I would hope that there is something that is achievable.”