The regulation of unregulated legal services providers is fast approaching Introduction If I were to make one prophesy about legal services in our country for the future, it would be that we will soon have some sort of regulation for those who are currently not regulated to provide legal services (hereafter ‘unregulated providers’, even though they might be regulated in some respects, but not for the provision of legal services). There have been two important reports that have called for such a move over the last year.
Two reports with recommendations on unregulated providers First, in the middle of last year, Professor Stephen Mayson of University College London published a report into the future regulation of the legal profession (www.lawgazette. co.uk/news/register-every-lawyerregardless-of-qualification-maysonreview/5104600.article). Professor Mayson’s report was wideranging, and much of its content was beyond the scope of this article (www.ucl.ac.uk/ethics-law/sites/ ethics-law/files/irlsr_final_report_final. pdf). It was divided into two sets of recommendations, long-term and short-term, and its short-term recommendations were devoted specifically to the problems which are expected to arise post-pandemic. He wrote first that, post-pandemic, lawtech providers will probably be better funded, financially more resilient, and more entrepreneurial than many law firms. Second, if law firms are going to go out of business, consumers will probably be drawn even more to currently unregulated providers and unregulated technologybased legal services. Therefore, says 10 | www.cambslawsoc.co.uk
Professor Mayson, it is even more important that alternative providers are brought in the short-term within the scope of regulation. Professor Mayson’s preferred short-term solution was for the Legal Services Board (LSB) to establish a public register of unregulated providers. He said the LSB should then decide if any compensation and indemnification arrangements should be attached. The second report came just before Christmas 2020. It was from the Competition and Markets Authority (CMA), called ‘Review of the legal services market study in England and Wales’ (www.gov.uk/cma-cases/reviewof-the-legal-services-market-study-inengland-and-wales). The CMA had a slightly different short-term recommendation. Although the favoured solutions of both the CMA and Professor Mayson are for long-term root-and-branch reform of the regulation of the legal profession, they both recognise that – since the government clearly has its hands full with other matters – such change is not going to happen for the time being. The CMA’s short-term solution was for the Ministry of Justice to create, or enable the creation of, a mandatory public register for unregulated providers.
Jonathan Goldsmith
Who are the unregulated providers? Data before the LSB suggests that unregulated businesses represent just 1% of paid-for advice, although that is thought to be an underestimate. While this seems small, the LSB says that it amounts to a significant number of transactions, especially in segments where unregulated businesses have a higher market share. Professor Mayson mentions willwriters, estate administrators, costs drafters, paralegals, and McKenzie Friends. He points out that many of these choose to join voluntary accreditation and registration schemes and carry professional indemnity insurance, but that those who do not pose a risk to consumers. But there is a group missing from this list. As Professor Mayson elsewhere mentions, technology is developing rapidly in the legal sphere. UK legaltech is a leader in the field. The provision of legal services via platforms, mainly American, is increasing swiftly, whether that be through lawyer rating sites, document assembly offers, or apps which take citizens through the steps necessary to make claims. The pandemic, with home working and the
