Legal services regulation reform: consultation analysis

Conclusions

Cross Cutting Issues and Key Findings

There was strong agreement that almost all of the objectives and priorities for regulation of legal services as set out across the consultation document were either very or somewhat important. However, there was a mixed picture in terms of how respondents felt changes or consolidation should be achieved and who should have responsibility for the different regulatory aspects.

The consultation feedback tended to show no clear consensus with regards to either the Roberton Report's primary recommendation, or which regulatory model would be preferred and welcomed by both consumers and the profession alike.

While there was a higher number of respondents who were against Option 1 (The Roberton Model) and preferred Option 3 (The Enhanced Accountability and Transparency Model), caution is required when interpreting the results presented in this report due to the risk of sample structure bias. Those responding from within the profession tended (although not unanimously) to advocate for Option 3 and/or be strongly against Option 1, while consumers and those representing them tended to prefer Option 1 and be strongly against Option 3 (although again not unanimously). Should a greater number of legal professionals have responded than consumers, this could have driven the results.

Those who were opposed to the Roberton Model tended to feel that this would risk undermining the various principles and objectives set out by the consultation document. They argued that this would also fundamentally impact on the independence of the legal profession in Scotland due to Scottish Government/ Parliament input to the new regulator, thus negatively impacting on access to justice as well as the profession's international reputation. It was also felt that this model would result in increased costs, which would ultimately be passed on to the consumer. Further, it was felt that there was little evidence provided (either in the Roberton Report or the consultation document) to justify the need for such radical reforms, with many considering that any necessary changes could be more easily and efficiently incorporated into the existing framework. There were also concerns that such a model would limit the need for, and impactfulness of, the current professional bodies.

Conversely, those in favour of the Roberton Model, urged the Scottish Government to be "brave" and "bold" when reforming the system, suggesting that more radical reform and a new framework was required rather than "tinkering" or adding further "layers of bureaucracy". These respondents were attracted to the independence from the legal profession that this model would bring, and it was considered to address concerns around bias and conflicts of interest which were perceived as afflicting the current system. It was argued that this would be fairer to consumers and engender greater transparency, accountability and trust in the system. Further, it was felt that the Roberton Model provided a more modern approach that placed consumer rights at the centre.

Option 2 (The Market Regulator Model) emerged as the agreed middle-ground, however, caution is again required. As the level of support for the options presented was not measured, simply the order in which respondents would place them in terms of preference, it is not known how much support this option would receive if proposed for implementation. Indeed, several indicated this option was only marginally better than their last place choice, and therefore it may not receive significant levels of support from any side.

Regardless of the extent of any future changes to the regulatory structure or the option chosen, one key area which was consistently highlighted as requiring reform was the approach to complaints and how these are handled. This was discussed as a reason for supporting Option 1 (The Roberton Model) and was flagged as an issue that needed to be addressed within any implementation of Option 3 (The Enhanced Accountability and Transparency Model). While there was general consensus over some proposals around how to reform this element, such as in providing a single gateway for complaints, views were again generally polarised regarding how and who should deal with complaints once they have been submitted.

A final point of agreement was the need for any future model to be transparent, open to public scrutiny and efficient (including being fair to providers of all sizes) to ensure that justice remains accessible to all. All respondents, regardless of affiliation, shared this as a common aspiration.

Concluding Remarks

The consultation findings provide consideration of the different regulatory models and supporting proposals, as well as the 'for and against' arguments made in relation to each. Some aspects/proposals were generally well supported, for example: the need for a baseline survey of consumers; the importance of the role of the Lord President in the regulatory framework; the testing of non-lawyer owners and managers of legal entities to be fit and proper persons; continuation of the Client Protection Fund; the need for a clear definition of legal services; and the need for entity regulation. However, views on other issues, as well as how to achieve those aspects which generated general agreement, were more mixed and often polarised. It may be that further engagement would be beneficial with both the legal profession and consumers to develop a solution which would be more widely supported by both sides.

The purpose of this report, however, was not to make recommendations over which regulatory model should be taken forward, but rather to collate and present the feedback from stakeholders on their views resulting from the consultation. The Scottish Government will continue to explore the best way forward with regulatory reform in the legal sector, considering the findings from both this consultation and other work in the area.