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LSB proposed internal governance rules consultation – Law Society response

6 June 2019

The proposals

The Legal Services Board (LSB) is consulting on its proposed internal governance rules.

This consultation concerns amendments to the proposed Rules 4, 8 and 10. It follows the LSB’s previous consultation on proposed internal governance rules.

In our previous response, we argued that the proposed wording introduced the concept of “influence” which went a great deal further than the first limb of section 30(1) of the Act which is focused on “prejudice”.

In this second consultation, the LSB has:

  • listened to key points that we made
  • changed the wording in Rule 1 from “influence” to “prejudice”
  • made similar changes to Rules 4, 8 and 10

However, the prospective new rules do not contain a definition of “prejudice”.

The proposed wording also says that approved regulators must not “seek to prejudice” the independent judgement of the regulatory body in Rules 4(3)(b), 8(2)(b) and 10(2)(b).

Our view

We are still concerned whether the proposed changes to the rules will achieve clarity, as the prospective new rules do not contain a definition of “prejudice”.

The new wording seems to focus on the intention behind the behaviour rather than outcomes.

This is inconsistent with the LSB’s stated intention to develop new internal governance rules that are “principled and outcome focused”.

What this means for solicitors

There is a risk that there will be uncertainty and confusion amongst the profession if important definitions are removed from the glossary.

Next steps

The consultation closes on 12 June.

We urge the LSB to make our recommended changes.

Read the consultation on the LSB website

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