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OFT welcomes reforms of legal profession

17 October 2005

The OFT today welcomed proposed reforms to the way lawyers are regulated and provide services that should improve competition and choice for users of legal services. The proposals, published today in a White Paper from the Department for Constitutional Affairs, should also increase consumer confidence in and satisfaction with the legal profession.

The White Paper proposals follow recommendations in the Clementi Report, published in December 2004, to make regulation less restrictive and more effective. The OFT supports changes that would increase the freedom of legal services providers to adapt their services and businesses to their customers' needs, and that ensure that regulation is in the public interest, promoting competition and innovation. Increasing the independence and effectiveness of complaints handling mechanisms will mean users of legal services are better protected and more confident.

Welcoming the proposals, John Fingleton, OFT Chief Executive, said: 'The White Paper combines deregulation with better regulation. The proposed reforms should enable increased competition in the provision of legal services and provide better protection for consumers when service is inadequate. Users of legal services and the wider public will benefit from early and effective implementation to secure these improvements.'

NOTES

1. In March 2001 the OFT published its report on 'Competition in Professions' (see press release 10/01 and the progress update in press release 21/02) which highlighted a number of significant restrictions on the provision of legal services. The most significant restrictions which remain to be addressed are rules which: prohibit partnerships between barristers and between barristers and other professionals (both lawyers and non-lawyers); prohibit solicitors from entering partnerships with members of other professions (both lawyers and non-lawyers); prevent solicitors in employment of non-solicitors from providing services to third parties and which prohibit litigation by barristers at the independent bar. Implementation of the white papers proposals on alternative business structures would substantially reduce these restrictions.

2.  In June 2004 the OFT published its response to the Clementi Review. Download the OFT  response (pdf 188 kb).

3. Under the Enterprise Act 2002, the OFT has advisory responsibilities relating to the competition implications of proposed rules and regulations. These apply to rules governing legal professional services as to other areas of the economy. The OFT also has advisory powers specific to certain important rules relating to the provision of legal services under the Courts and Legal Services Act 1990.

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