20 January 2018

Legal Services Act

The Legal Services Act 2007 reforms the way in which legal services are regulated in England and Wales. The Act creates a new regulatory structure for legal services, which allows different types of lawyer and non-lawyer to form businesses together. It also permits non-lawyers to be involved in the management or ownership of businesses that provide legal services.

Under the Act the Legal Services Board (LSB) has a duty to promote the following regulatory objectives:

  • Protecting and promoting public interest;
  • Supporting the constitutional principles of the rule of law;
  • Improving access to justice;
  • Protecting and promoting the interests of consumers;
  • Promoting competition in the provision of services;
  • Encouraging an independent, strong, diverse and effective legal profession;
  • Increasing public understanding of the citizen's legal rights and duties;
  • Promoting and maintaining adherence to the professional principles

The main effects of the Legal Services Act

The Legal Services Act created a new regulatory organisation called the Legal Services Board (LSB). The LSB supervises the work of the various approved regulators, which are permitted by law to regulate the supply of legal services. The approved regulators are:

  1. The Law Society
  2. The Bar Council
  3. The Master of the Faculties
  4. The Council for Licensed Conveyancers
  5. The Institute of Legal Executives
  6. The Chartered Institute of Patent Agents
  7. The Institute of Trade Mark Attorneys
  8. The Association of Law Costs Draftsmen

The creation of the Office for Legal Complaints (OLC). The OLC is a single, independent body, which deals with complaints made by consumers about the provision of legal services.  The Legal Ombudsman was established by the OLC under the Legal Services Act 2007 and began accepting complaints on 6 October 2010.

It permits business structures for firms providing legal services. To begin with, the Act permitted the formation of "Legal Disciplinary Practices" (LDPs), which are firms providing legal services that involve different kinds of lawyers, and can include up to 25 per cent non-lawyers. These came into effect on 31 March 2009 and are regulated by the SRA and the CLC. Following this, the Act permitted Alternative Business Structures (ABSs), which allow external ownership of legal businesses, and multidisciplinary practices which provide a mixture of legal and other services.  The CLC started regulating ABSs in October 2011 and the SRA expected to start regulating ABSs in January 2012.