Regulation, new style

In its work on alternative business structures and the Legal Services (Scotland) Bill, the Law Society of Scotland has promoted certain key principles. Not least, the maintenance of the highest professional standards and creation of a level playing field for all providers and regulators of legal services. And the bill as currently drafted contains a number of safeguards to ensure those principles are not compromised.

In fact, its enactment would effectively enshrine the profession’s core values in statute for the first time and also introduce a fitness to own test for non-solicitor owners and external investors. The Society is arguing robustly for change in other key areas including the provision of the equivalent of the Guarantee Fund for new licensed legal services providers (LPs).

If passed, the Legal Services Bill would create the potential for far-reaching change. However, in many ways, it is likely the overall framework for providing legal services would remain familiar to solicitors practising today. Essentially, the conduct of all solicitors, whether in existing firms or LPs, would continue to be regulated by the Law Society of Scotland. All complaints would go to the Scottish Legal Complaints Commission as a gateway, as happens at present. They would retain service complaints and pass conduct complaints back to the Society as they do now

A brief summary of the proposed changes might be helpful.

• LPs would be regulated by approved regulators.
• Approved regulators would put together a regulatory scheme and seek approval by Scottish ministers.
• The regulatory scheme would outline required professional standards and contain practice and licensing rules.
• The regulatory scheme would also state regulatory objectives, such as promoting access to justice, the independence of the legal profession and professional principles.
• The professional principles include maintaining standards, acting with independence and integrity and acting in the client’s best interests.
• A new fitness to own test would be applied to all non-solicitors who seek to become owners or investors in LPs.

Every LP, a business with at least one solicitor and one other professional practitioner, would require to heed the regulatory objectives and adhere to the professional principles. A head of legal services, who must be a solicitor supported by a head of practice or practice committee, would be responsible for ensuring the business complied with those requirements.

The bottom line? Whether in an existing firm or LP, whether working in-house or in private practice, the Society would still regulate the individual solicitor, just as it does now. The Society would play its part in maintaining Scottish solicitors’ reputation for excellence by continuing to promote the highest ethical and professional standards.