Watchdog to investigate Law Society and SRA governance arrangements

The Legal Services Board (LSB) has unveiled plans to hold a formal investigation into the governance arrangements between the Law Society and the Solicitors Regulation Authority.

The LSB said this decision followed representations made by the SRA and took into account information that had been provided by both bodies.

In a letter to Chancery Lane’s interim chief executive, the Board said: “The investigation will consider whether the current arrangements between the TLS and the SRA are in line with Part 4 of the Schedule to LSB’s Internal Governance Rules 2009 (IGR) which require that the internal governance arrangements must not impair the independence and effectiveness of the performance of regulatory functions.

“In particular we will consider whether the arrangements for the Business and Oversight Board have worked as the parties intended, enabling TLS to exercise appropriate oversight whilst complying with the IGR.”

The LSB said that it would share the detailed scope of the review with both organisations once it had been determined.

An SRA spokesperson said: “We welcome the Legal Services Board decision to undertake a formal investigation into the governance arrangements between the Law Society and the Solicitors Regulation Authority. We are continuing to work closely with the LSB and the Law Society, and look forward to the outcome of the investigation."

President of the Law Society Robert Bourns said: “We now have the opportunity to clarify the Law Society’s statutory duty of oversight put in place following Clementi’s root and branch review and the Legal Services Act 2007.
 
“We support the Legal Services Board's role of ensuring the system as a whole is working for clients, the wider public and the profession.
 
“The Law Society does not fetter the Solicitors Regulation Authority’s regulatory activities and responds to consultations as any other stakeholder. On a day to day basis the two organisations maintain good working relations and share support services such as finance and HR systems."

Bourns said that Chancery Lane would  work closely and collaboratively with the LSB on their review.

"We do note that the Competition and Markets Authority recently concluded that it could find no harm as a result of the current arrangements for regulation and that a full market investigation was not necessary," ha added.