Legal Services Bill [HL]

moved Amendment No. 108AA: 108AA: Clause 81 , page 47, line 3, leave out subsection (1) The noble Lord said: This amendment would remove the obligation on the Legal Services Board to make rules in its capacity as a licensing authority. The principle in the Bill for the regulation of alternative business structures is that frontline regulation should be carried out by the approved regulators once they have received authorisation to act as a licensing authority. I emphasise that only approved regulators can seek to become licensing authorities; it would not be open to any other regulatory body to fulfil that role. The principle that only approved regulators can seek to become licensing authorities in itself provides an important protection. It is right that the same consumer protections are in place in respect of alternative business structures as apply to ordinary law firms. It is also right to ensure a level playing field, so that the regulatory requirements applying to alternative business structures are equivalent to those that apply to ordinary law firms. That is best achieved, we submit, by ensuring that, as the Bill clearly intends, the same regulators are responsible both for ordinary law firms and for alternative business structures. However, that principle is undermined by the provisions that would enable the Legal Services Board itself to act as a licensing authority. It is understandable that there should be a power for the Legal Services Board to act as a licensing authority in an emergency. For example, it may be necessary for a variety of reasons to cancel the designation of an approved authority. In that case, to avoid a licensing vacuum, the Legal Services Board would have to step in; but it would be wholly inappropriate for the board to act as a licensor in the absence of an emergency of that type.