Appendix A: Proposed Regulatory Models
Options 1-3 below have been reproduced from the consultation paper for ease of reference.
Option 1: Roberton Model
Key points of the Option 1 model
This model is the primary recommendation of the Roberton report.
All legal professionals would be regulated by a new independent body which would be accountable to the Scottish Parliament, and subject to scrutiny by Audit Scotland.
All complaints relating to legal professionals would be handled by that body, replacing the role of the SLCC and current regulators.
That new body would be funded through a levy on those it regulated, the legal profession. The cost to the profession would be intended to be no more than the current system.
Current regulators, The Law Society of Scotland, The Faculty of Advocates, and The Association of Commercial Attorneys, would no longer have regulatory roles. Instead they would be invited to work with the new independent regulator as professional organisations.
Option 2: Market Regulator Model
A similar model currently operates in England and Wales where the Legal Services Board is an oversight regulator which sits at the top of the regulatory framework. It provides regulatory oversight of the 'approved regulators'.
The role of a market regulator:
To monitor the supply of legal services - A market regulator would authorise the regulators of legal professionals. It would have the ability to act and make recommendations to help geographic or subject specific areas where services are reduced or in decline.
To monitor risks within the sector - A market regulator would have a broad regulatory tool-kit to help balance and reduce potential risks in respect of legal services.
Act as economic regulator - A market regulator would act impartially, and aim to align and balance the interests of the legal profession with the interests of those who use legal services such as consumers.
Key points of the Option 2 model
A new independent market regulator would be created which would have oversight of the current regulators. It would be accountable to the Scottish Parliament.
The current regulators would keep many of their current responsibilities, they would be required to host an independent statutory regulatory committee which would be accountable to the market regulator. The market regulator would then be responsible for authorising each committee's regulatory responsibilities. The SLCC would continue to handle complaints.
The extent of the market regulator's responsibilities, and the complaints process would be informed by the views expressed to this consultation.
The market regulator, approved regulators and SLCC would be funded through a levy on those regulated, the legal profession, with the cost intended to be no more than the current system.
Option 3: Enhanced Accountability and Transparency Model
Key Points of the Option 3 model
No new organisation would be created. Instead each of the current regulators would host an independent statutory regulatory committee which would be accountable to the Scottish Parliament or the Lord President.
The SLCC would continue to handle complaints. The extent and form of accountability, and the complaints process would be informed by the views expressed to this consultation.
The regulators and SLCC would be funded through a levy on those regulated, the legal profession, with the cost intended to be no more than the current system.
Option 3+: Proposed by the Law Society of Scotland
The Law Society of Scotland detailed an alternative proposal for the regulatory system in their consultation response, which constituted an enhanced Option 3 and was referred to as Option 3+. This has been reproduced here as a number of other respondents also endorsed and supported this:
"We support Option 3 but would like to strongly enhance this model to address the real problems and real concerns within the current regulatory regime. This includes:
- "A radical overhaul of the complaints system, widely seen as failing consumers and the profession, by moving to a system which is quick, agile and treats all parties fairly. The Scottish Government should transform the Scottish Legal Complaints Commission into a proper Scottish Legal Ombudsman Service which could concentrate more effectively on dealing with consumer complaints thoroughly and swiftly. This would, in turn, allow the Law Society to continue its strong track record of protecting the public interest by addressing issues of professional misconduct and prosecuting disciplinary breaches. This is the kind of system which already exists and works well in England and Wales and was recently adopted in Northern Ireland.
- "Changes to the way our already independent Regulatory Committee is populated and making it more accountable for its work.
- "An important move towards entity regulation, which would create a regulatory system more relevant and more applicable to modern legal practice and provide the Law Society with a broader range of powers to take action when we need to. This could also be used to address the need for more robust regulation around the use of artificial intelligence and other technology in the delivery of legal services.
- "Action to tackle the unregulated legal services market, which puts consumers at risk, an issue which the consultation paper regrettably fails to discuss or adequately recognise. This is disappointing as this current review presents possibly the only opportunity to address problems and risks associated from unregulated legal services.
- "New powers to allow cross-border regulation, a change which can position Scotland as a more attractive jurisdiction in which legal firms can be based and offer the chance to grow inward investment and jobs."
Reformed Complaints System
Part of the Law Society of Scotland's Option 3+ system also focused on an alternative complaints system. This contained elements of the model in England and Wales between the Legal Ombudsman Service (LeO) and the Solicitors Regulation Authority (SRA), and is reproduced from the Law Society of Scotland's response below:
- "The SLCC is replaced with SLOS [a Scottish Legal Ombudsman Service]. This body would focus on handling complaints from consumers and ensure a speedy resolution or, if a formal determination is needed, appropriate redress. In line with the recommendations of the Roberton report, we suggest the Chair of SLOS be subject to the public appointment process and be required to lay an annual report before the Scottish Parliament. The office of the Lord President would oversee SLOS (see below).
- "SLOS would handle service complaints, with the [Law] Society (or respective co-regulators, such as the Faculty of Advocates) handling conduct complaints. This recognises the differences between consumer redress complaints and conduct concerns, which engage issues of public protection and public confidence in the profession.
- "The single gateway for consumer complaints would be retained and SLOS would act as the gateway. However, the Law Society would be able to proceed to investigate conduct concerns without first seeking approval from the SLOS (as we currently must do with the SLCC). This would ultimately allow us to take action quicker, minimising risks to the public. In addition, as with the SRA and LeO, there would be a Memorandum of Understanding between the Law Society and SLOS to address the mechanics of eligibility of conduct complaints and cross-referral of service issues.
- "There would be a speedier process to decide which complaints are investigated, replacing the current cumbersome set of statutory 'eligibility' tests which a complaint must pass through. The different bodies would need to apply the same eligibility tests for conduct complaints. The principles to be applied in accepting a conduct complaint for investigation could be included in the legislation. The underlying mechanics of the eligibility tests, responsibility and referrals between the different bodies could be dealt with through Memoranda of Understanding, as is the case in England and Wales. This would allow the different bodies to develop a more flexible and proportionate approach, similar to the approach the SRA adopt in their enforcement strategy.
- "Hybrid complaints would be reintroduced.
- "There would be powers to award compensation in relation to both service complaints and conduct complaints.
- "The SLOS would have the power to award compensation in relation to service complaints where an aspect of consumer redress is required.
- "Given the limited size of the Scottish jurisdiction, we are of the view the Office of the Lord President (LP) should adopt an oversight role over both the SLOS and the professional bodies within the legal sector. This would be similar to the role which the LP currently has in overseeing the Scottish Solicitors' Discipline Tribunal (SSDT). In addition to oversight, we suggest that the LP would be responsible for receiving and investigating handling complaints about SLOS or the professional bodies. This reflects the important role of the Lord President as the independent head of the Scottish legal profession and is a system which works well elsewhere.
- "The appeals process would be simplified, while remaining compliant with the European Convention on Human Rights. In keeping with other regulatory ombudsmen and alternative dispute resolution schemes, service complaint decisions would be binding on regulated professionals, subject to judicial review. Appeals of conduct complaint decisions would be heard by the Court of Session.
- "We support the principle of there being an independent disciplinary tribunal which is separate to the professional bodies and takes decisions in the most serious of cases against Scottish solicitors. This tribunal would sit outside the Scottish Courts and Tribunals Service. We believe the current arrangements where we act as prosecutor before the SSDT in cases of professional misconduct works effectively. This is evidenced by the number of cases which we bring before the SSDT under our own initiative. Over the past five years, 33% of the complaints we have prosecuted at the SSDT arose from complaints we initiated."
The Law Society of Scotland also stated that:
"There must be more permissive legislation underpinning this model. This is the approach the Scottish Parliament has adopted with professional regulators in other devolved areas, and it has worked well. For example, the modern legislation underpinning the General Teaching Council for Scotland (GTCS) and the Scottish Social Services Council (SSSC) serves as a stark contrast to the patchwork quilt of complex legislation underpinning legal regulation. Over the past 10 years, these two regulators have introduced various innovations including changing to fitness to practise models of regulation, developing thresholds for investigating cases and implementing consensual disposal for cases. It should be noted that the GTCS, like us, is a regulating professional body. This underlines our key point: the current problems are not caused by the model of regulation or who is regulating - they are caused by overly prescriptive process set out in law."
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