Government backs overhaul of legal services regulation following critical review

The review, commissioned by the Ministry of Justice in February 2026 and led by Richard Lloyd, concluded in July that a “significant reset” was needed in how the legal services regulatory system operates.

It found that the LSB's activities had not been sufficiently focused on consumer protection and regulatory outcomes, while the wider regulatory framework was characterised by duplication, complexity and unclear responsibilities.

The review called for changes to the LSB's culture and capabilities, including clearer prioritisation, more proportionate, risk-based oversight, improved collaboration across the regulatory system and clearer accountability for outcomes.

In its response, the Government accepted all the review's recommendations and confirmed that it would consider longer-term changes to the legal services regulatory framework.

It also committed to strengthening transparency and accountability arrangements, developing a shared approach to risk management and clarifying policy responsibilities between the Ministry of Justice, the LSB and frontline regulators.

The MoJ said it could not commit to Lloyd's proposed timescale for the development of a new framework, however. 

Lloyd had suggested that this should happen by 2029 with a view to implementation during the next Parliament.

The Ministry said: "The scale and complexity of this work will require a full and robust review process to ensure that any future reforms are evidence-based, informed by engagement across the legal sector and capable of delivering lasting improvement. As the review will need to take account of the breadth of complex issues under consideration, the government cannot fully commit to the proposed timeline at this stage.""

Minister of State for Courts and Legal Services Sarah Sackman KC said: “The independent review of the Legal Services Board is clear: change is needed. The LSB must have sharper priorities, stronger oversight and a clearer focus on protecting consumers.

“The government accepts all the review’s recommendations and supports a reset in how the regulatory system operates.”

She added that the Government would continue to preserve the independence of the legal services regulation, but said this must be accompanied by “clear accountability for performance, outcomes and value for money”.

The Government said work to implement the recommendations had already begun, adding that immediate improvements should not be delayed while longer-term reforms are considered.

Adam Carey