CILEx calls for regulatory change from CMA

The Chartered Institute of Legal Executives (CILEx) has called for changes to the legal regulatory framework to accommodate the growth of emerging lawtech solutions and the increasing use of remotely accessed legal services.

It says that the impact of Covid-19 has accelerated consumer demand, particularly in private client and conveyancing work. This is set to continue beyond the pandemic, highlighting the need for a regulatory framework able to effectively scrutinise and regulate emerging technologies.

CILEx, responding to the Competition & Market Authority’s (CMA) call for input on its ongoing review into legal services, argues that although the legal services sector is becoming more competitive, there are still areas requiring intervention by the CMA to demystify the legal market for consumers, give customers access to a range of legal professionals and ensure regulation reflects technological developments.

CILEx says:

“We foresee a need for greater flexibility within the regulatory framework to allow for alternative methods of delivery which can be included within the fold of regulation.

“The regulatory framework will need to shift to enable these digital solutions, which are created, coded and maintained by non-legal middlemen, and may even eliminate the role of legal practitioners within certain legal processes, to be effectively regulated, or at the very least moderated, to ensure minimum standards within legal service delivery and healthy competition for the sector.”

The response went on to highlight the need for impartiality in relation to quality indicators that could help consumers choose a lawyer, to prevent them from being detrimental to competition in legal services. It welcomed the work being undertaken by both the CMA and Legal Services Board in developing quality indicators and its view that these be independent of any single legal regulator or professional body.

CILEx explains that some of the current ‘quality hallmarks’ in the legal sector, such as the Conveyancing Quality Scheme administered by the Law Society, are run by a single legal professional body for the benefit of its membership. These have then been adopted by other stakeholders, such as lenders in the case of the CQS, as minimum thresholds. This means such hallmarks have, inadvertently, become market barriers to those other legal professionals not able to access them.

CILEx also highlights the role of legislation which often unjustifiably excludes non-solicitors/barrister legal professionals from undertaking certain tasks because it does not reflect the modernisation of legal regulation introduced in the Legal Services Act 2007.

These include a bar on CILEx lawyers certifying copies of a power attorney (despite being able to certify originals) under the Powers of Attorney Act 1971 and limitations on criminal advocacy work deriving from Courts and Legal Services Act 1990. Both have direct adverse effects on consumer awareness and competition.

Professor Chris Bones, the chair of CILEx, says:

“The CMA’s ongoing review of the legal services market, building on its comprehensive 2016 Market Study, is important if the legal services sector is to become more competitive and offer better value to consumers.

“There are still areas that are outdated and where illogical anomalies need to be addressed. These would benefit from the CMA’s support. The remedies delivered would make the legal market more transparent for consumers, allow customers to access a greater range of legal service providers and ensure regulation reflects technological developments.”

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