Profession’s regulator is only one to provide LSB with sufficient assurance across the board
The Costs Lawyer Standards Board (CLSB) was this week marked top of the class in the annual performance assessment of all eight legal regulators – for the third year running.
The Legal Services Board (LSB) uses a traffic light system to assess each regulator against three standards – well-led (which relates to resources and capability), effective approach to regulation, and operational delivery – and the CLSB was the only one to score green (sufficient assurance) on each measure in 2024.
Having been the only regulator to satisfy the LSB in 2022 in all aspects of the assessment, the 2023 report put the Solicitors Regulation Authority alongside it, but its score dropped badly last year in the wake of the report into its approach to the collapse of Axiom Ince.
The assessment said: “The CLSB has provided good overall assurance about its performance across the characteristics and has continued to demonstrate the good practice highlighted in last year’s report. Its approach continues to exemplify a model of good practice for other smaller regulators within the sector.
“Through its work since the last assessment period, the CLSB has been able to demonstrate it continues to understand its regulated community and the market, and that it proactively makes updates to its regulatory approach based on identified risks or areas for improvement.
“This has included a programme of work to update its code of conduct to ensure the CLSB’s requirements for professionalism remained in line with the expectation of the profession.”
The oversight regulator explained how the CLSB had demonstrated it has “a clear sense of purpose and strategy focused on regulation in the public interest”.
The CLSB was able to demonstrate that it has “an engaged, transparent and well-governed board”, and making decisions “informed by and in collaboration with the ACL, Costs Lawyers and other relevant stakeholders without prejudicing its regulatory functions or compromising its independence in regulatory decision making”.
But with a new chief executive taking over next month, the LSB said the next assessment should consider whether the CLSB has “the appropriate resources and transition processes in place to meet its obligations”.
It went on: “While the small number of permanent staff makes sense within the context of the size of the regulated community and the relatively low level of potential public risk that costs lawyers pose, in order to be determined as a Well-led organisation, the CLSB must demonstrate that it has the appropriate processes in place to maintain effective resourcing of the CLSB, even through times of transition within the executive team.”
The LSB praised the CLSB for ensuring its activities were informed by data and research, as well as stakeholder engagement, and for ensuring Costs Lawyers have and maintain the skills they require.
Among the issues the LSB said it would be looking out for in the next assessment were the CLSB’s progress in delivering the first year of its long-term communications strategy; how the CLSB’s technology and innovation-related research was used to improve innovation within the sector; and the results of the monitoring process for the new qualification.
Asked in a press conference about what the CLSB was doing so well that the other regulators were not, LSB chief executive Craig Westwood said: “They work very well with us, they respond to the needs of their regulatory audience and they engage well on policy. They really do demonstrate that it is possible to get a green rating across the board.”
At the same time, he noted that the LSB only needed to have one significant concern in an area to drop a regulator’s rating down from green to amber, meaning that for more complex regulators working across a much broader scope than the CLSB, the risk of this happening was “probably greater”.
The Bar Standards Board was the worst performing regulator, with two reds, while the Intellectual Property Regulation Board and the Institute of Chartered Accountants in England and Wales – only for its regulation of probate work – each scored two greens.
Overall, the LSB found a decline in performance against the well-led standard, but a slight improvement in the effective approach to regulation.
Mr Westwood said: “This year’s assessment reveals some concerning shortfalls in regulatory performance, particularly from the two largest regulators.
“Effective regulation is essential to protecting the public and maintaining confidence in legal services. All regulators must address the issues that we’ve highlighted and must demonstrate more clearly how their activities benefit consumers…
“The mixed performance we have seen underscores the importance of robust oversight. We are committed to supporting all regulators to reach the standards the public and profession deserve.”