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Legal Services Board seeks powers to impose huge fines on regulators

Posted: 07 August 2009 | Provided by: The Law Society Gazette | Browse more news

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The Legal Services Board could punish the Law Society and other regulators with multi-million-pound fines if they fail to meet its regulatory objectives, under proposals published this week.

The plans, which would give the LSB powers to fine the Law Society up to £28m for non-compliance, were dubbed 'misconceived' by Chancery Lane.

The maximum level of fine, which would be enforceable from January 2010, would be calculated at a rate of £250 for each of the 112,500 practising certificate holders in England and Wales. Alternatively, the LSB could fine the Society £5,000 for every law firm that it regulates, or £10m.

Russell Wallman, director of government relations at the Law Society, said that the proposed fines draw a 'false analogy' between commercial profit-making bodies and non-commercial professional bodies. Wallman said: 'The [LSB's] proposals about maximum level of fines are misconceived. They draw a false analogy between utility companies, which are commercial bodies operating for profit, and the regulation of legal services, which is a non-commercial activity carried out in the public interest. We will be responding fully to the consultation paper in due course.'

However, LSB chairman David Edmonds said it is 'crucial that regulation is delivered in pursuit of the public interest at all times', and that 'enforcement powers and how they might be used are a key part of the new statutory regime'.

The Legal Services Act 2007 sets out regulatory objectives that are shared between the LSB and the eight approved regulators, including the Law Society, Bar Council and Institute of Legal Executives. The LSB will use its enforcement powers to ensure delivery of these objectives, which include protecting and promoting the interest of the public and consumers; encouraging an independent legal profession; and promoting competition in legal services.

The LSB consultation closes on 26 October.

Providers website: The Law Society Gazette
Date: 07 August 2009
Listed in: General news
More news: View all The Law Society Gazette news

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