LSB calls for safeguards in relation to fee-charging McKenzie Friends

Fee-charging ‘Mckenzie Friends’ could be promoted as a legitimate feature of the evolving legal services market but safeguards are needed, the Legal Services Board has said.

Responding to a report by the Legal Services Consumer Panel, the LSB said there was “a risk they may be misleadingly perceived as offering a service underpinned by the same standards and consumer protections that are provided by a regulated professional.”

The Panel’s report, which was published in April 2014, concluded that the access to justice benefits of having fee-charging McKenzie Frieds outweighed the risks. Its research found no evidence of widespread detriment, although there had been a serious impact in some individual cases.

The LSCP ruled out statutory regulation at this stage, calling instead for the sector to develop a credible system of self-regulation to earn greater trust from the judiciary, the legal profession and the general public.

It recommended that the LSB should:

• review case law on the definition of the conduct of litigation and publish a document which seeks to clarify its meaning. Depending on the findings of this research, the Board should consider recommending to the Law Commission that the law in this area be reviewed.
• consider the findings of the Panel's report as part of its ongoing work on simplifying legal services regulation.

In its response the LSB said: “[W]e believe that the interpretation of case law and statute is a matter for the courts and we anticipate the report’s findings will be relevant to a broad range of our work, notably but far from exclusively, our current work on cost and complexity of regulation.”

The Board said the Panel’s report was an important contribution to the ongoing debate around the transformation of legal services, at a time when economic conditions and judicial practice were beginning “to blur the traditional hard and fast boundaries between the regulated and the unregulated parts of the legal sector”.

Legal Services Board Chairman, Sir Michael Pitt, said: "We believe that the report offers timely consideration of an area of increasing significance and note in particular the contribution that these services can make to improving access to justice.

“I support the suggestion that fee-charging McKenzie Friends should be recognised as a legitimate feature of the evolving legal services market.

“However, safeguards are necessary including the issuing of guidance and greater clarity regarding their role and limitations. Consideration should also be given to accreditation, the formation of a trade association and the availability of indemnity insurance."