Falconer: Reforms

Lord Falconer has set out plans to strip the legal profession of its complaints-handling powers.

The move comes as part of a wide-ranging ranging set of reforms to improve legal services and "put the consumer first".

The constitutional affairs secretary unveiled the plans on Monday in a speech on the future of legal services.

After a public consultation the Department of Constitutional Affairs concluded the existing legal services framework was failing to meet the demands of the market place and the needs of consumers.

The study found the system for complaints handling was ineffective, with the public not knowing who to complain to and even when they did, the system was too slow and complex.

The creation of a "transparent and accountable" regulator - the Legal Services Board - was proposed by former deputy governor of the Bank of England, Sir David Clementi, in a government-commissioned report last year.

This new body will now be introduced to set standards for regulation and check they are met.

It will have powers to apply a range of sanctions where it considers that regulation has failed.

Under the new system, all front-line regulatory bodies will be required to separate clearly their regulatory and representative functions.

"It is for each body to decide what form its governance arrangements take, but they will need to demonstrate clear lines of accountability and openness about how resources will be allocated to the two discrete functions of representation and regulation," said Lord Falconer.

Responsibility

To improve the complaints system an Office for Legal Complaints will be established with the aim of providing a more consistent, fair and professional handling of cases for all complainants.

Lord Falconer maintained that removing complaints handling from the professional bodies will not reduce their responsibility to ensure that members operate to the highest standards.

"I acknowledge the serious and constant efforts the professional bodies make in this regard. The Office for Legal Complaints will help, not hinder," he said.

"We need one complaints body so there is clarity for the consumer about how and where to complain."
 
And the final key part of the scheme will see changes to the way law firms can be owned and run.

Lawyers will now be allowed to go into business with other professionals such as accountants, a move that goes further than Sir David's recommendation to simply allow solicitors and barristers to set up together.

But Lord Falconer said the new business structures would need approval from the Legal Services Board to provide their services.

"If these extend significantly into areas beyond the Board’s competence, approval and oversight by other regulators will be required before the services can be offered," he said.

The plans to reform the way complaints against lawyers are handled were condemned by the Bar's complaints commissioner in a separate report published on Monday.

Michael Scott said the proposals risked "throwing the good out with the poor".

A reliable system handling complaints against barristers established over the last eight years risked falling into a "government black hole" dominated by "bureaucrats and apparatchiks", Scott warned.

He said the Bar Council had a good track record compared with the Law Society, which deals with complaints against solicitors and  has been repeatedly criticised by ministers and watchdogs.

"I have previously worked in a department of state and it's very easy to lose sight of what actually goes on at ground level," he said.

"I cannot help feeling that had it not been for the Law Society's difficulty in handling complaints against solicitors we would not be in this position."