In Context: Regulation of Legal Services (Scotland) Bill
Plans to reform how the legal sector is regulated has caused controversy in legal circles.
What is it?
The Regulation of Legal Services (Scotland) Bill, which is at stage one, was introduced by justice secretary Angela Constance in April 2023. It aims to reform how the legal sector is regulated.
Its regulatory framework has three chapters which look to set out what regulated legal services are to achieve and the standards that those providing services should follow; make rules for all regulators of legal services, while dividing regulators into two categories and placing different rules on each; set out how an organisation can become a regulator and its members can gain permission to provide legal services.
It also sets out rules about how businesses that provide legal services should be regulated, as well as how complaints about these types of services are dealt with. Other changes that the bill, in its current form, will make to the sector relate to changing ownership limits for a type of legal business; making it simpler for charities and third-sector organisations to provide legal services; creating new offences in connection with people who pretend to be able to provide legal services.
Why is the Scottish Government doing this?
It is responding to several reports which have proposed changes to the regulation of the legal services dating as far back as December 2015.
It commissioned an independent review to look at reforming the regulation of legal services in April 2017. Esther Roberton led the review and published her report in October 2018. It made 40 recommendations, including a new single regulatory body. The Law Society of Scotland, which regulates solicitors, is “strongly opposed” to that principal recommendation.
What’s the controversy?
Senior legal figures have warned the reforms threaten the legal sector’s long-held independence, as the bill would allow Scottish ministers the power to intervene in how the sector is regulated.
The legislation would permit ministers to set performance targets, publish a statement of censure, impose a financial penalty, or make changes or remove parts, or in some cases, all of the regulator’s regulatory functions if they were judged to be operating outwith the public interest.
Besides imposing a financial penalty, these measures would have to be agreed with Scotland’s most senior judge, the Lord President. But even this safeguarding has been criticised, as it could politicise the role. In evidence to the Equalities, Human Rights and Civil Justice Committee, the legal profession called on the proposed powers to be removed from the legislation.
What was said in the submissions to the committee?
The Law Society of Scotland said it was not able to identify these kinds of powers in any other western democracy, adding that the powers within the bill “risk seriously undermining the rule of the law and the independence of Scotland’s legal sector from the state”. It added: “We have never before seen such an attempt at political control over the legal sector in Scotland.
“It could see the Scottish Government intervene directly on the rules and structures that decide who can and cannot be a solicitor, decide the professional requirements placed upon solicitors, and decide the way in which legal firms operate. This is deeply alarming.”
The regulator for advocates in Scotland, the Faculty of Advocates, said the changes to the regulation of the sector “go well beyond the existing framework” and the reforms carry “substantial risks to the independence of the legal profession”, which it says there is no objective justification for. The Faculty said: “The bill contains provisions giving the Scottish ministers very broad powers, not only in making regulations but also allowing interventions in some circumstances.
“This is not so much building on the existing framework as creating unjustified mechanisms which may be used in the future in a way that undermines and compromises the value of an independent profession and independent regulation.”
The International Bar Association said sections of the bill represent “an alarming and dangerous assault” by the Scottish Government on the independence of the legal profession and that it risks “undermining the rule of law in Scotland and harming the international reputation of Scotland and its legal sector”.
What has been the response?
The Scottish Government said it “has no intention of changing the vital importance of having an independent legal sector”. A spokesperson said: “The promotion of an independent, strong and diverse legal profession is enshrined in the bill while providing for a modern regulatory framework to promote competition, innovation and improve the transparency and accountability of legal services regulation, taking into account public and consumer interests.
“We will continue to engage both consumer and legal stakeholders as this legislation proceeds through parliament.”
A spokesperson for the Scottish Parliament said: “The committee will consider the submissions it has received, and then invite witnesses to give evidence in public as it continues to scrutinise the bill.”