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LSB consultation on proposed internal governance rules

22 January 2019

The Law Society has published its response to the Legal Services Board consultation: 'Proposed Internal Governance Rules'.

The Internal Governance Rules (IGRs) are rules made by the LSB that set out the requirements to be met by approved regulators in ensuring an adequate split between their regulatory and representative functions.

The Internal Governance Rules arise from Section 30 of the Legal Services Act, which obliges the LSB to make rules setting out requirements for each approved regulator to ensure the separation of regulatory and representative functions.

The LSB consulted on changing the Internal Governance Rules in 2018, and in our response we argued that clear targeted IGRs would support both approved regulators and frontline regulators to discharge their roles effectively, improving public confidence in legal regulation.

The new proposed IGRs raise significant concerns for the Law Society. We are concerned that they do not set out a clear enough framework for settling future complaints and may create a context in which disagreements are more likely to arise.

Further, some of the changes proposed in the consultation appear to us to be inconsistent with the Act. In particular, the revised IGRs may not be consistent with Section 30 of the Act, which makes clear that it is 'prejudice' which must be prevented by the IGRs.

We believe that the IGRs as drafted would go far beyond the requirements of Section 30.

Another fundamental concern relates to the distinction drawn between 'oversight' and 'assurance'. We believe that limitations placed upon the Society would prevent it from carrying out the approved regulator role as intended by the Act.

Finally, one of the aims of revising the IGRs is to achieve clarity. We do not believe that the changes proposed would achieve such clarity.

Where it is possible to so, we have set out the kinds of changes that we would propose to the draft rules in our response.

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