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Scottish legal-services bill concerns CMA

Britain’s main competition watchdog has expressed concern about a bill on regulating the legal-services sector that has been introduced to the Scottish parliament.

The Scottish Government’s plans for the sector include a model that “builds on the existing framework”, under which representative bodies for solicitors and barristers would continue to regulate the sector.

An independent review ahead of the introduction of the Regulation of Legal Services (Scotland) Bill had recommended an independent regulator.

‘Not substantially different’

In a submission to a consultation process, the Competition and Markets Authority (CMA) said that it backed the proposal made by the Roberton Report for a stand-alone regulator.

It stated, however, that the model chosen by the Scottish Government for the bill was not substantially different from the current arrangements.

“The current arrangements, whereby the main regulators of legal-services providers are also the profession’s representative bodies, creates potential for conflicts of interest,” its submission said.

‘Lack of transparency’

The CMA said that its research had highlighted “several concerns that have arisen in practice” under the current arrangements.

“These include several examples where this conflict of interest may have led the Law Society of Scotland (LSS) and the Faculty of Advocates (FoA) to prioritise the interests of their members over those of consumers in setting regulation or advocating for pro-competitive measures.

“In addition, there are concerns about the lack of transparency and accountability of the current arrangements, and a negative impact on public perception and trust,” the watchdog said.

While it notes that there are additional checks and balances in the Scottish Government’s proposals, and that the bill “strives for independence for regulator functions”, it believes that the lack of “true separation” of functions “retains an inherent conflict of interest”.

Scottish Government ‘right’

In England and Wales, representative and regulatory functions were formally split more than 15 years ago.

Sheila Webster (President of the Law Society of Scotland) told the Law Society Gazette of England and Wales: “We disagreed fundamentally with the proposal in the 2018 Roberton Report for a new, politically appointed body regulating the legal sector. We believe the Scottish Government was right to reject this.”

She added that law societies and bar associations around the world had a role in regulation and professional support, citing Ireland among her examples.

In Ireland, the Legal Services Regulatory Authority (LSRA) is the independent regulator for the legal-services sector.

The Law Society of Ireland and Bar of Ireland are entitled to nominate non-lay members to the authority, but they are required to “protect and promote the public interest”, and are not representatives of the professional bodies.