Lloyd said the LSB, which was introduced by the Legal Services Act 2007 to oversee frontline regulators, ‘has lacked strategic clarity and has struggled to have the impact intended by Parliament.
‘It has not sufficiently prioritised in a pragmatic and proportionate way among its strategic objectives. Its oversight of the performance of frontline regulation has fallen short of what the government and Parliament could reasonably expect. As a result, the interests of consumers have not been as well protected by the system as they might have been.’
Nevertheless, it was staffed by professional and committed people and, ‘with the right changes... should be capable of playing a more effective and influential oversight role’. He recommended a ‘major shift’ in culture and capabilities, including that it make choices ‘about what to stop doing’ and collaborate more with frontline regulators.
His review highlighted frontline regulators’ views that the LSB could have shown more leadership on Mazur, a High Court decision which led to uncertainty about the role of legal executives and paralegals during litigation.
One key recommendation is for the LSB to carry out a comprehensive review of legal services regulation, developing a ‘new framework’ by 2029 which could be implemented during the next Parliament.
CILEX chair Eileen Milner said: ‘We hope that, reflecting on this review, the LSB acknowledges that it could do more to listen to those it regulates.’
LSB chair Monisha Shah said: ‘We accept our responsibility in the failure of the system to protect the interests of consumers.’ The review ‘gives us a clear, independent basis for a major reset. We will introduce a sharper regulatory focus and a more dynamic, risk-based approach to oversight’.
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