LSA & Impacts on Access to Justice. Robert Cross Regulating Legal Services in the 21st Century Conference Georgetown University 24 April 2015

Transcription

1 LSA & Impacts on Access to Justice Robert Cross Regulating Legal Services in the 21st Century Conference Georgetown University 24 April 2015

2 Overview What is the Legal Services Act 2007? What is Access to Justice? What's happened so far? 2

3 Independent regulation Legal Ombudsman CILEx CILEx Regulator Master of Faculties ABS ABS ABS 3

4 What regulation should be doing Source: Part 1 Legal Services Act Protecting and promoting the public interest 2. Supporting the constitutional principle of the rule of law 3. Improving access to justice 4. Protecting and promoting the interests of consumers 5. Promoting competition in the provision of services 6. Encouraging an independent, strong, diverse and effective legal profession 7. Increasing public understanding of the citizen s legal rights and duties 8. Promoting and maintaining adherence to the professional principles 4

5 Codified reserved activities... Source: Part 3 Legal Services Act 2007 Reserved Activities by Profession Solicitors Barristers Legal Executives Licensed Conveyancers Patent Attorneys Trademark Attorneys Cost Lawyers Notaries and scriveners 1. Right to conduct litigation 2. Right of audience in the courts X X X X X X X X X X X X 3. Probate services X X X X 4. Reserved Instrument Activities X X X X X X 5. Notarial services X 6. Acting as a commissioner for oaths X X X X X X X X 5

6 ...with no change to statutory protection Protected Solicitor Barrister Registered Trade Mark Attorney Patent Attorney Unprotected Lawyer Law Practitioner Paralegal Legal Adviser Attorney Advocate Adviser 6

7 Not just regulated providers Other lawyers firms (10-20% Tnvr UK) Solicitors firms (60% Tnvr UK) Unregulated legal businesses (20% -30% Tnvr UK) Source: LSB estimates 7

8 What is an ABS? 4

9 The ABS suitability test You must: 1. uphold the rule of law and the proper administration of justice; 2. act with integrity; 3. not allow your independence to be compromised; 4. act in the best interests of each client; 5. provide a proper standard of service to your clients; 6. behave in a way that maintains the trust the public places in you and in the provision of legal services; 7. comply with your legal and regulatory obligations and deal with your regulators and ombudsmen in an open, timely and co-operative manner; 8. run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles; 9. run your business or carry out your role in the business in a way that encourages equality of opportunity and respect for diversity; and 10. protect client money and assets. Source: 9

10 Overview What is the Legal Services Act 2007? What is Access to Justice? What's happened so far? 10

11 Source: The Regulatory Objectives. LSB, LSB definition of access to justice the acting out of the rule of law in particular or individual circumstances. The tools to achieve that outcome range from informing the public about their rights, routine transactional legal services and personalised advice, through to action before tribunals and courts. The agents of delivery are wide and, of course, legal professionals are at the heart of this along with many other actors in legal services and the wider justice sector 11

12 Source: Legal Services Benchmarking Survey, BDRC, 2012 Responses to legal problems for individuals 12

13 Source: In need of advice?, Pleasence' & Balmer, 2013 And for small businesses 13

14 For rights issues: Not everybody who experiences a legal problem will take steps to resolve it. Fewer than one in ten will instruct a traditional lawyer (i.e. a private practice solicitor or barrister), and only around one in twenty will see it resolved through a court, tribunal or other third party decision. The courts are thus peripheral to much everyday justice. Source: How people resolve legal problems, Pascoe Pleasence, Nigel J Balmer, LSB 2014 LSB emphasis 14

15 Why does this happen? our findings indicate that use of lawyers may be more fundamentally driven by whether or not people characterise problems as being legal... To the extent characterisation is linked to people's understanding of the law, it raises questions around public legal education. To the extent it is linked to problem severity, or the stage that problems have reached, it raises questions around the accuracy of people s cost-benefit assessments and the appropriateness of characterisations. To the extent it is linked to the supply of traditional legal services, it raises questions around the functioning of the legal services market Horses for courses? Pascoe Pleasence, Nigel J Balmer, Stian Reimers, LSB 2010 LSB emphasis 15

16 What people think of lawyers Source: Consumer use of Legal Services, Optimisa,

17 Overview What is the Legal Services Act 2007? What is Access to Justice? What's happened so far? 17

18 Changing regulations rule approval applications made by regulators 51 deemed by regulators to make a positive contribution to access to justice. Of these: 23% providing a greater diversity of regulated services for example CILEx application to become an Approved Regulator for Probate rights 21% Widening the range of services permitted and regulated for example Direct Access Barristers In : ICAEW approved to regulate probate activities CILEx to regulate firms 18

19 Consumer perspective (1) Choice of providers Sources: Legal Services Consumer Panel, Annual Tracker Survey, You Gov. More shopping around More fixed fees 19

20 Consumer perspective (2) Satisfaction with service Sources: Legal Services Consumer Panel, Annual Tracker Survey, You Gov. Satisfaction with outcome Improved perceptions of value for money 20

21 Sources: SRA Upheld allegations of misconduct falling 21

22 Legal services sector grown Sources: ONS, LSC, MoJ, SLAB, NILSC (est.) UK WIDE 22

23 Number of lawyers grown Sources: Approved Regulators 23

24 Number of regulated law firms static Sources: Approved Regulators SRA regulated firms ABS as of February regulated by the SRA 46 regulated by the CLC 55 by the ICAEW 24

25 ABS: What's changed since they became an ABS? Survey of ABS, July 2013, n = 64 (33%) The way they market the services provided No change 77% The groups of consumers they provide services to 91% No change Areas of law they provide services in No change 83% 25

26 ABS: How are they different to non ABS firms? Survey of ABS, July 2013, n = 64 (33%) We are well managed and organised which results in the provision of a good service to our customers. We work hard at customer service and this makes a big difference Our management structure now reflects what our clients would expect from their suppliers - which is not the traditional partnership model! The customer is the whole focus of the business; the way we're set up and how we deliver our services 26

27 How do we think they are different to non ABS firms? Early indicators 2013: Greater use of technology websites 91% v. 52% Resolve more complaints at first stage 11 for every 1 referred to LEO v. 4 for every 1 referred to LEO Greater use of non qualified lawyers 1% of all organisations, 4% of qualified lawyers, 12% of nonqualified lawyers Sources : LSB survey of ABS, A Time of Change? Pleasence et al, LSB analysis of SRA data 27

28 Variety of regulated business models 2015 some examples 1. Entry by established retail brands - Co Op 2. Legal brand networks of traditional firms - Quality Solicitors 3. Heavy investment in TV advertising with high production values - Slater & Gordon 4. Online service delivery Legal Zoom 5. Local authority ABS licences delivering savings on legal spend - Buckinghamshire Law 6. Accountancy firms entering the market - KPMG, EY, PWC 7. Private equity investment Knights solicitors 8. In-house teams turning into freestanding practices - BT Law 9. Law firm and a charity combining to form an ABS - Aspire Law 10. Fixed-fee subscription models serving business consumers Riverview 11. Direct access to barristers - Richmond Chambers LLP 12. Trade unions combining to create an ABS - Trade Union Legal LLP 13. Foreign firms setting up as ABS Cahilll Gordon & Reindel 28

29 Conclusions Three years is too soon to see changes in consumer behaviour but positive changes in service experiences Regulators now allow a greater variety of business models Early changes in the supply side look positive Market change and changes in access to justice - will take time 29

30 Watch this space forthcoming research Changes (or not) in consumers response to legal problems: Small Business Legal Needs June/July 2015 Individual Legal Needs (and Public levels of legal capability) December 2015 The first legal sector wide quantitative assessment of level of innovation May 2015 Update of 2012 Evaluation of the market impacts of Legal Services Act January

31 Research reports: One Kemble Street London WC2B 4AN Follow LSB_EngandWal