In our latest podcast, Ally Thomson of Hey Legal is joined by Executive Director of Regulation of the Law Society of Scotland, Rachel Wood and Craig Cathcart of The Regulatory Committee of the Society to discuss the current consultation on Legal Services Regulation Reform. Key points that all lawyers need to know are discussed in this episode. Listen now, or read the discussion about Legal Services Regulation Reform below.
Legal Services Regulation Reform
Welcome to the Hey Legal podcast. I’m your host Ally Thomson. Today I am joined by the Executive Director of Regulation at the Law Society of Scotland, Rachel Wood, and Craig Cathcart. Convenor of the Regulatory Committee of the Society. We discuss the current Scottish government consultation on legal services regulation reform in Scotland; why it matters and what solicitors can do now. Essential listening for all Scottish lawyers and anyone interested in the future of the Scottish legal sector. I began by asking Rachel and Craig to each outline their respective roles. I hope you enjoy our conversation.
Rachel Wood: I’m the Executive Director of Regulation at the Law Society. And that means ultimately accountability for the regulation of Scottish solicitors. So we look after everything from the big one of dealing with conduct complaints to financial compliance, anti money laundering [00:01:00] compliance, some regulatory policy work. And also the little known, hopefully little known, for most people, interventions team who deal with things when unfortunately firms no longer can operate.
Craig Cathcart: So my day job is I’m a Senior Lecturer in Dispute Resolution at Queen Margaret University. Prior to that, I have been a an academic for a number of years before that I had a background in consumer protection. And I’ve also formerly been on the board of a consumer rights charity.
As the non solicitor Convener of the Regulatory Committee, I head up the principal committee that looks after the delegated regulatory functions functions of the Society. Those functions are delegated by Council. The committee was set up or just over a decade ago. And the Regulatory Committee though is simply the capstone committee if you like, of a number of regulatory subcommittees all very ably and professionally supported by Rachel and her team.
Ally Thomson: Thank you both , so why do lawyers need to be aware of the Legal Services Regulation Reform consultation? Why can`t they ignore it?
Rachel Wood: Yeah, really good question and I recognize that busy solicitors have got their day job in front of them. And this can seem like something that can just be dealt with by other people and might be a little bit esoteric, but regulation is so woven into everything that solicitors do these days from anti money laundering to unfortunately having to deal with complaints and it’s something that everybody deals with on a day-to-day basis, I think now in the profession.
So this is something where we, the law society said many years ago that we thought that we wanted to modernize the way we regulate to make it more proportionate, more risk-based, more flexible, more cost-effective and we went to Government with some suggestions on how to do that. What came out of that in 2017 – 2018 was the Roberton Report, which [00:03:00] I think somewhat to everybody’s surprise instead of focusing solely on how we might regulate better suggested that we should blow up the current regulatory structures and we should change who the regulator is. And so the real thrust of the Legal Services Regulation Reform consultation we now have is about who the regulators should be much more than how we regulate. Who the regulators should be potentially means the Law Society coming to an end, it potentially means increased costs in terms of some of the proposals that are being put, increased regulatory burdens on the profession.
So I think given how important regulation is for solicitors nowadays today it goes to the heart of the work they’re doing, how they might be asked to do it, and the cost of that.
Ally Thomson: Thank you, Rachel and Craig do you have any thoughts on this please?
Craig Cathcart: Yeah, absolutely. I think how lawyers are regulated is a question for everyone in society because lawyers are so key to frankly, to the functioning of a democracy. So that then obviously means that the matter of how the sector is regulated should be of primary interest to lawyers and among a number of other priorities.
And as well as I say more broadly for all of us, just as citizens and members of society, I think the Legal Services Regulation Reform consultation represents an opportunity. And we’ve heard the phrase a lot in Scottish life of a once in a generation opportunity and so on, but this, I suspect genuinely as a once in a generation opportunity for us really to continuously improve the regulation of solicitors and others in the legal sector to really make it better. Nobody wants to be a regulator and interfere in people’s attempts to make an honest living. And so we are always striving to make it proportionate, to not be too much of a burden on business and hearing the voice of the profession as we try and make those improvements, therefore is vital.
Ally Thomson: Thank you Craig. So why is the Legal Services Regulation Reform consultation happening?
Rachel Wood: The consultation is happening because primarily because we asked for it. We said the legislative matrix that governs regulation in Scotland is outdated. Some of it is more than 40 years old now. It’s a patchwork of legislation it’s quite restrictive and rigid. So we asked for changes to modernize regulation of solicitors in Scotland.
And as Craig has said, to be more proportionate, to be more risk-based, to do things like entity regulation, to do things like be able to regulate cross border without our solicitors, having to have multiple regulators to account to. So a lot of things that we asked for. So that, that was really the start of it.
And as I say, it’s then perhaps changed into something slightly different. And the consultation does touch on some of those things. Nice early Christmas present for all of us in that the deadline for submitting responses on the Legal Services Regulation Reform consultation is the 24th of December. The society is certainly looking to have its response available before then, partly so that the profession ,if they wish, can have a look at what we’re saying, where we’re coming from. And we’re keeping people up to date in the meantime, through our website, as well as things like this podcast.
Ally Thomson: Okay, that’s great. Thank you for that. Yes and that did catch my eye that the 24th of December. I did think that was a rather unusual a choice, and you can almost picture the presents being wrapped and then turning your attention to the Legal Services Regulation Reform consultation response . And Craig do you wish to add anything as to why it`s happening and the detail around that, please?
Craig Cathcart: No, just to, really, to echo what Rachel has said, that I think by general consent, there was a need for reform and the law society was very proactive in making that initial case As we’ve heard I think that the difficulty was that the Roberton report seem to answer the question that no one had asked.
Our response to that now is to appreciate the effort and resource that government is putting into the reform process, but to try and take the positives from it,while hopefully seeing off some of the risks that are inherent in this as I say, this answer that came from a question that never had been asked in the first place.
Rachel Wood: Yeah, if I can just follow up. So I think that’s a really good point that Craig makes because the Roberton report itself, says that there is no mischief. There is no market failure here. I t`s a strong high quality profession. There’s nothing inherently wrong with it, but then suggest blowing over. So I think that has always been something that initially took us a little bit by surprise as well, but we do now welcome the opportunity to try and express our views on how we might make the most of the proposals and actually move forward with the changes that we really want to see [00:08:00] happen.
Ally Thomson: Yes t hank you for that. I obviously speak without any form of a position in relation to this and having looked to educate myself a little bit in advance of today it may be that I could say that i t appears that potentially the Roberton review has gone a bit rogue and we have now ended up with three options being consulted upon. I don’t expect you to comment on that but three options being consulted on so that`s where we are now at. Is it possible just to give up an outline of what those three options are, please?
Rachel Wood: So yes we have three options. Option one is the suggestion that we create a new super regulator. It would be a single regulator for all legal professionals in Scotland. So solicitors, advocates, commercial attorneys so one regulator for everybody and that the system and the [00:09:00] regulators that we currently have would essentially cease to exist. Option two is a market regulator option. That one is perhaps not as fleshed out in the government’s thinking, but essentially suggesting something similar to what there is currently in England and Wales and also in Ireland where we would keep the existing structures in place, the SLCC, the Law Society, the Faculty of Advocates, etc. And we would layer on top of that, a oversight market regulator, who would be able to direct travel to some extent in terms of policy, in terms of approach.
Option three is one that on the face of it perhaps looks about like the status quo, but actually is something more than that. It is probably closest to the model the Law Society currently have, but not the model that The Faculty of Advocates have, for example, or the commercial attorneys have, but it is saying, let’s to a certain extent, leave what we have, but look at how we can strengthen the independence of the regulatory arm of organisations like the Law Society and also think about some of the accountability of the model. So that in essence is the three models. I think it’s also really important to say that option one and option two in particular are suggesting that regulation should be accountable to Government, to the state which we can get into the detail of that, but which does raise questions, particularly at the moment where we see certainly headlines down south about judges being enemies of the people and so on. It does raise questions about the rule of law and the very important independence of the legal profession, and the fact that there are these suggestions now that there could be regulation that is actually even in a small way, somehow accountable to the state.
Ally Thomson: Great. Thank you. And Craig, would you like to add anything in relation to that, please?
Craig Cathcart: No, I think Rachel’s covered it very well. I suppose what we would say is that when you’re looking at option two and in particular, there, you have to ask the model of a super regulator or generic oversight board might be fit for some jurisdictions, but is it right for Scotland? The size and scale of the legal professional in Scotland, can it really bear the burden of yet another layer of, as it were bureaucratic regulator on top of everything, that’s there at the moment and in the absence of any proven case there is the need for that as a solution to this unasked question.
Ally Thomson: Okay. Thank you and appreciate [00:12:00] you both wear different hats and have different roles, but you know the question, is what does the Law Society favou r and what do you think is the route that we should be or you would wish to promote or the outcome that you would like to see here?
Craig Cathcart: Maybe if I go first, this time, Ally. Yeah. I again, I think that is a case that can be made in some contexts for the oversight board as described in option two. But I think you really need to look at that very carefully. And I’m not assume that because it might work in one jurisdiction that it necessarily works in another and I wouldn’t want to over assume in that regard. We think that the current system of regulation as set in the 2010 Act that set up the statutory regulatory committee that I have the privilege of currently convening is relatively young and it’s not been proven to be ineffective. In fact, quite the opposite [00:13:00] we would argue subjectively of course, that actually it has proven to be quite effective and has carried out its remit of looking very seriously, independently and appropriately at the delegated regulatory functions from Council. And we do that and we defend our independent thought and action and all for the greater purpose of achieving public confidence in the way lawyers are regulated.
As we said before, we don’t think that there is a n issue to be addressed here, but we very much approach our work with the spirit of continuous improvement. So where there are positive improvements to be made, where we can be more accountable, where we can be more transparent, where we can access voices and parts of the community that we maybe haven`t heard from enough up to this point, then we will continue on that journey.
My committee, for example, has already taken steps to form a consumer panel so that we are making sure that we listened to that all important. We are looking at measures of making the information about committee business more [00:14:00] publicly and widely available and so on as well. So we are already thinking along these lines to the extent that this process will allow us to continue on that journey, then we very much welcome it.
Rachel Wood: Yeah. And if I can just jump in and say that’s a really good summary, Craig. I think, let’s cut to the chase here. The real thing that everybody has an issue with is the complaint system. There’s nobody who thinks that the complaint system really works at the moment, not the people, not the clients or consumers of legal services who feel they have to complain, not the profession who are on the receiving end of complaints, not us as a regulator wearing a regulatory hat who are frustrated by the length of time that it takes, by the pain and anguish that it causes everybody. It`s right t hat we need to have a complaint system. It’s right that when solicitors don’t do what they should do, when they don’t comply [00:15:00] with the very high standards that we expect of them, that there should be consequences for that. But it certainly could be more efficient and more effective.
And I think that that’s what we’ve got to remember is the real issue here. And we’re working and already working where we can with the SLCC to make improvements to that. But the question of who regulates is not going to change how complaints are regulated. And I think, we will have a better chance of achieving necessary change, making it more permissive, more flexible in terms of the complaints regime, which should speed it up, making it more cost-effective if we don’t blow the whole thing up and create, for example, a new super regulator or a new layer of oversight and regulation. So I think it really comes down to the complaint system to a large extent.
Craig Cathcart: I would agree with that. And [00:16:00] that really is by common consent. It’s a major concern of the way the current regulatory system has this rigid and bureaucratic and far too ridiculously lengthy and non-consumer friendly complaints process at the moment. So as an opportunity for radical reform of that, then we embrace that very much. Other opportunities that are within the proposals at the moment include, for example, protecting the term lawyer and actually defining that in law.
And again, this is something not just as a matter of professional self-interest, but looking at it from the consumer protection perspective, that makes sense. We know that in the unreserved activities that are carried out by other people in the marketplace that if a consumer does have a complaint, they very often have taken the term lawyer to mean there is some form of protection in place and that the practitioner is regulated by the society, for example. And they then unfortunately have that difficult conversation when they’re told, actually that’s not the case that this is actually an unregulated professional, this is an [00:17:00] unreserved or relatively unregulated service that they have in engaged with here.
And that is, that’s a weakness in consumer protection. So there’s another opportunity for enhanced consumer protection through this process, along with all the other things that Rachel’s talked about earlier, such as entity regulation, for instance,
Ally Thomson: Thank you both for everything you have outlined thus far. It shows the potentially seismic implications of what’s being discussed here. That it`s a matter that solicitors really can’t leave in the hands of others.
So what would you recommend that solicitors should do now in relation to the consultation please?
Rachel Wood: Yeah. I’ll jump in there. Thanks Ally. And I think, it is seismic. And just to pick up on that point first the last time there was a significant change to how solicitors are regulated was in 2007, when the SLCC came in to being and what we’re talking about now is going to be potentially quite a radical [00:18:00] change and a once in a generation change, as Craig said earlier on that will shape how legal services are regulated in Scotland for a long time to come. So it is really important.
And if people have strong feelings about what happened in 2007, this is a much more radical response. I n terms of people getting involved I think there’s two things. One is, the obvious one is respond to the consultation. It’s a pretty chunky consultation. Some of it is quite technical and some of it is broad general questions.
We are confident that the government really, they haven’t made their mind up about this. And they really do want to hear what everybody has to say. Of course, they’re listening to the consumer voice. But they recognize the value that the Scottish legal profession brings to the economy. They recognize the high international reputation that the profession has.
And so they are keen to hear from the profession [00:19:00] as well about this. So do respond. We’re confident as well that you don’t have to respond to every question in the consultation. In fact, it’s divided into almost two parts where with some general questions you can answer. And then a lot of detailed questions.
So I think just even picking and choosing a couple of things would be useful. So that’s probably the main thing. The other thing is that the Government themselves are holding focus groups where they’re inviting any citizen to come and have a conversation with them about this consultation.
And you can find a link to those on Scottish government’s website. So it’s easier just to go along and have a bit of a chat. There are these focus groups taking place at the moment, hosted by Scottish government as well.
Ally Thomson: And Craig?
Craig Cathcart: Yeah. Just to say again I think this is not only a really pressing matter for the legal profession and legal practitioners, but it’s for all of us as citizens and members of society. [00:20:00] How lawyers are regulated is absolutely key to the quality of our democracy, to the rule of law. And that might sound like really lofty ideas, but trust me when the rule of law is under threat, we would soon notice what it means for us in our daily lives.
So this really is an opportunity to have your voice heard. So I would encourage anyone, whether a lawyer, whether a client of a lawyer or whether just as a member of society to have a look at the consultation and reflect on what you think it’s saying to you, and then to make sure your voice is heard.
Ally Thomson: Well, that’s fantastic from both of you. So it’s a rallying cry to get involved , it`s a rallying cry to shape your future, essentially within the profession, it’s something that you can’t abdicate and leave to others. We will certainly do everything we can to amplify the message on to hopefully as many people as possible can get involved with the process. Thank you both so much. Is there anything else you would like to add before we wrap up and I’ll leave you to your [00:21:00] perspective weekends?
Rachel Wood: I think we’ve covered everything, Ally. I We could talk about this all night, but that would be very boring for most people. Just to remind people that the whole society’s website has got a section on this and included in there is a handy two pages guide to some of the headline issues. So if nothing else, having a look at that is a good way to inform yourself and get you thinking about making even a very short response. So thank you very much for giving us the opportunity to chat about it.
Craig Cathcart: Yeah. Absolutely. No, I think we’ve covered it all. So I hope it’s useful.
Ally Thomson: Okay thank you both so much. I’m indebted to you for taking the time to explain these topics to us, and outlining the importance of it all. We will look to release this very soon for the listeners, so thank you both. Okay, thank you.