Welcome to this afternoon’s sitting of the Justice Committee, which is undertaking its fourth evidence session in the access to justice inquiry we are currently engaged in. This session will look primarily at the interrelation between access to justice and legal services regulators. We have two panels: one with the Legal Services Board and another with the Solicitors Regulation Authority. Before I ask the first panel to introduce themselves, we will do our declarations of interest.

I am Ashley Fox, the Member for Bridgwater, and my interests are as declared on the register.

I am Andy Slaughter, the Chair of the Committee and the Member for Hammersmith and Chiswick. I am a non-practising barrister, a member of the GMB and Unite trade unions, and a patron of two legal-related charities, the Upper Room, for ex-offenders, and Hammersmith and Fulham Law Centre.

Good afternoon. My name is Tessa Munt. I am the Member of Parliament for Wells and Mendip Hills. I am also a director and a vice-chair of WhistleblowersUK, which is a not-for-profit organisation, and vice-chair of the all-party parliamentary group on penal affairs.

Hello, I am Vikki Slade, Member of Parliament for Mid Dorset and North Poole. My interests are as per the register, but I have none related to this Committee.

Thank you very much. Dr Shah and Mr Orpin, could you introduce yourselves?

Thank you, Chair. I must say that I wish I was, but am not, Dr Shah—I am just Ms Shah.

I apologise.

That is quite all right—it lends me an esteem I cannot profess to have. I am Monisha Shah. I am the newly appointed chair of the Legal Services Board.

Good afternoon. I am Richard Orpin. I am the chief executive at the Legal Services Board.

How long have you been in post?

I have been in post since January, substantively, but I have been at the Legal Services Board for around three years.

You are both very new to your posts. On that basis, thank you very much for coming before us. I want to ask some opening questions. The Legal Services Board is often described as the super-regulator. Could you begin by explaining the role of the board and its key functions?

Of course, and thank you for the invitation to give evidence to the Committee today on this really important issue. The Legal Services Board is the oversight regulator for legal services in England and Wales. We are a statutory, independent public body created by the Legal Services Act 2007. That Act sets out our duties and functions. The key one is to hold the frontline regulators to account in the public interest, to ensure that they deliver as they should against the regulatory objectives that both we and the regulators we oversee must promote. As the Committee will know, there are nine regulatory objectives, including improving access to justice. Parliament also equipped us with a range of tools to effect change across the legal services sector in the public interest. For example, we are able to set statutory statements of policy and statutory guidance, which the regulators then must take account of in the way that they go about fulfilling their roles. We have specific responsibilities, too, in relation to the Office for Legal Complaints and the Solicitors Disciplinary Tribunal. We also have responsibilities to assess applications from regulators to alter their regulatory arrangements. More broadly, we have an important role to play in carrying out research, which is a really useful evidence base, I hope, for policymakers beyond the regulators themselves, in convening discussions, bringing people together and setting strategic direction.

Do you think the system of legal regulation—the representative bodies, the regulators and you as a super-regulator—works well, and do you think it is easily comprehensible to the public?

I certainly think there is complexity in a system where you have an oversight regulator and frontline regulators, and where you have representative bodies and regulatory bodies. There is certainly complexity. I think, though, that there is much that the system can achieve when it works effectively. I am grateful for the opportunity today to talk about the things that we have done and are doing in relation to access to justice and issues more widely. I agree that it is complex, but I do not think that ought to be a barrier to it being effective.

Well, we really want to talk about whether it is effective or not. Let me take one example. In 2024, you gave a positive assessment of the Solicitors Regulation Authority. Given the role of regulatory failure in the collapses of Axiom Ince and SSB Law, both of which happened prior to the publication of that assessment, how did you come to that conclusion?

It is absolutely right that that assessment found that the SRA had met the standards that we assessed it against, but I want to stress that it did not give it a clean bill of health. The report found that the SRA had not given us sufficient assurance in two really key areas. One was its approach to risk, and one was its approach to enforcement, in particular how it deals with complaints information and then takes that forward into its enforcement activities. None the less, I want to emphasise that we recognise the need to change our approach to regulatory oversight. Of course, it is really important that all regulators learn from events that occur. We are putting in place a new approach to regulatory oversight that will be much more intelligence-led, risk-based and targeted, moving away from an annual assessment of all the regulators on that basis.

When you then reviewed the SRA in 2025, you rated its operational delivery as “insufficient”. What caused you to downgrade your assessment significantly?

I should say that the 2024 assessment did not examine the SRA’s operational delivery. It examined the two other standards that we looked at as part of that review: the extent to which it was well led and the extent to which it had an effective approach to regulation. We did note in that report that in areas of operational delivery—I have mentioned enforcement—it had not provided us with assurance. However, as you indicate, we had undertaken some significant reviews, working with an independent law firm—Carson McDowell, based in Northern Ireland—to really understand what occurred at the SRA in relation to the Axiom Ince intervention and the collapse of SSB Law. That gave us significant insight into some of the weaknesses inherent in the SRA’s approach and led us to take enforcement action. The SRA is now taking forward work, and we are holding it to account to make improvements in specific areas.

I appreciate you said that there are some differences in the type of reviews, but nevertheless you effectively downgraded your view of the SRA—you found that it was operationally insufficient. How can solicitors and consumers have confidence in it as a regulator if that is your view?

Clearly, the SRA needs to make some significant improvements, and we have taken enforcement action to require that it does. We have set directions for the SRA to comply with in areas of its operations, including governance, its approach to risk—to ensure that it is much more proactive in identifying risk and acting on it quickly—and its approach to supervision, including authorisations and enforcement. For example, that includes risks to consumers that might arise from a concentration of roles in managerial ownership and compliance roles in law firms; the protection of client money; and the way in which firms are increasingly, in some cases, becoming accumulator firms, exposing consumers to risk. All those things are areas where the SRA needs to take a more active and effective approach, and we are holding it to account to do so. The SRA has in place a very clear implementation plan to make progress in those areas, and we are monitoring it closely to ensure that improvements are secured, so that, exactly as you say, solicitors and the public can have confidence that the regulators are acting effectively.

But the SRA has come under a lot of criticism recently, not just in relation to those particular collapses. We will be asking it about that later this afternoon. You are its regulator; you should be keeping an eye on it. Do you think it is a failure by you that it was allowed to deteriorate to that extent?

I certainly think there are lessons to be learned for all regulators involved in the events that have occurred over the last few years, and that includes us. As I mentioned earlier, we have reviewed our approach to regulatory oversight since these events occurred, and we are now putting in place a different approach to oversight that will take input from a wider range of sources than has been the case in the past. We are investing in our surveillance and our horizon-scanning capability, so that we can look at and triage more effectively the types of issues that are occurring in a sector that is now developing quickly, and so that we can assess whether the regulators are acting effectively against the standards and characteristics of our framework, rather than relying only on the assurance provided by the boards of the regulators we oversee.

Yes, that is a change, and that is a move on from what has been described euphemistically as light-touch regulation. Do you have the mechanisms or tools to be able to increase your regulatory involvement?

There are a number of aspects to that. We have some very clear enforcement tools that we have used: the ability to impose directions, set performance targets and issue censure. We have used all those tools. We are strengthening our approach to regulatory oversight. I intend over the coming year to increase and invest in that part of our organisation to establish a directorate for regulatory oversight, so that we can more effectively and proactively hold regulators to account on the basis of intelligence that we receive and our ability to scrutinise that. We have tools, but we need to continue to strengthen.

You have described this as a complex situation, and I find it quite baffling. We have the SRA to regulate solicitors, you regulate the regulators, and presumably the Ministry and Parliament scrutinise you. Do you actually add anything to this? If we got rid of the LSB, and Parliament directly supervised the SRA, would we not be saving a great deal of time and money?

There is a really important role for oversight regulation to play in holding those regulators to account when things go wrong. That is what we have sought to do through the enforcement action that we have taken based on the reviews that were done. That means we can address findings without recourse to legislation, for example.

But would it not be more efficient if the Ministry of Justice kept an eye on the SRA? What do you add?

We are able to scrutinise, to act when things go wrong, to make statements of policy to bring about change in the sector for the benefit of the consumers—

That is nothing that the Ministry could not do, is it?

I think there is a debate about whether the model of regulation that we have now might change in the future. We work within the framework that we are required to as set by Parliament.

It is so complicated that nobody dares to try and unravel it.

Have you read Baroness Harman’s report, “Independent review of bullying and harassment at the Bar”?

Yes, I have.

Do you think that that discloses any areas in which you should function differently?

It exposes some serious and significant concerns about a “culture of impunity” at the Bar, to use Baroness Harman’s terminology. It requires a great degree of effort and co-ordinated action from the regulators, the representative bodies and the profession to change that so people can feel safe at work, can be part of an inclusive profession and, frankly, do not have to tolerate the instances of bullying and harassment that the report showed. I absolutely agree that the report is a damning indictment of the state of affairs as they stand and that significant action is needed. I welcome the appointment of a commissioner for conduct by the Bar Council, who I met with recently, and it is really important that the BSB and the Bar Council work together to make sure that there is an effective approach to remedying the issues that the report identified.

The report was issued in September last year. What concrete steps have you taken in your organisation to change it to reflect the report?

I will talk about the specific steps that we have taken in our oversight capacity and then I will perhaps talk about the work that we are doing with the Bar Standards Board and the Bar Council. We have recently issued a statement of policy around professional ethics, which is intended to drive up standards of ethical conduct in the profession. That applies to barristers as it applies to others. We are also consulting on proposals to ensure that the profession is more inclusive in the future so that people can join the sector from different walks of life and thrive within it when they get there. Clearly, you need a healthy environment to sustain that, not one that tolerates bullying or harassment. Right now, we are working closely with the Bar Standards Board and the Bar Council to ensure that a protocol is being put in place to encourage complaints to come forward, perhaps from people who have not felt empowered or confident to bring complaints in the past. We are working to ensure that complaints will be dealt with effectively and triaged appropriately, and that the Bar Standards Board will be in a position to take action, where it needs to in its regulatory capacity, when there is wrongdoing.

One of the elements of the report refers to the fact that judicial appointments were not apparently liaising in any way with the Bar Standards Board. Do you feel that indicates a failure on your part?

We do not have any remit over the judiciary as the Legal Services Board. Our remit is over the profession, but clearly the pipeline of individuals who come through the profession eventually makes up the judiciary. I certainly think that more needs to be done through the regulators, the representative bodies and the sector to ensure that we sustain an environment that is more conducive to a healthy working culture and one that does not tolerate discrimination, bullying or harassment.

The Bar Standards Board made decisions, such as those listed in the report, around male barristers who inappropriately touched and consistently harassed very junior female barristers—sometimes pupils—in ways that constituted public sexual assault. Those men were suspended for three months—the examples are all in the report. Were you cognisant of those examples? Have they been reviewed subsequently? What action are you taking on them?

We are certainly cognisant of the limitations in the Bar Standards Board’s approach to enforcement and the timeliness of its enforcement activity. We have imposed a set of undertakings with the Bar Standards Board that will require it to make improvements, so that it can bring resolutions to complaints much more quickly and effectively in future. As the oversight regulator, we have no remit into the decisions that frontline regulators make about individual cases, so we are not able to intervene in individual cases, but certainly where there is evidence that a frontline regulator is not performing to the level it is required to or that the public should expect, we take action. That is what we are doing with the undertakings.

Making bad decisions faster is not an improvement for the women who are on the receiving end of this harassment—I mean, it is a slight improvement, but it is not the wholesale change that will sort out the culture at the Bar. I understand that you cannot intervene in individual decisions—I would not expect you to—but in terms of a systematic review of how the outcomes look as against the offences, what work have you done?

As I say, we have done work around the extent to which ethical standards are present and upheld in the sector. We have concluded that we need to take action and have done so by introducing a new statement of policy that will strengthen the framework and ensure that ethical conduct improves in future. Clearly, ethical failures have occurred here.

The examples described include a pupil barrister being sexually assaulted in a room full of other barristers. I do not think that anyone is under any illusions that the people at the Bar did not know whether or not that was ethical. That is not about a failure of people knowing what ethics look like. It is astonishing.

I could not agree more that we have seen some really troubling and disturbing cases that, frankly, should never have occurred. These are instances that should never occur in the workplace, and it is now our responsibility at the Bar Standards Board and the Bar Council to work together to stamp out that behaviour. We need a zero-tolerance approach to make sure there is no room for anybody who seeks to perpetrate that kind of behaviour in the Bar profession, or any part of the legal services sector.

It is good evidence that you are not adding value, isn’t it?

No, I do not think that is right. We are using the levers we have at our disposal to try to drive change in a sector where we are one step removed from the individual cases that the regulators oversee.

I have one more point, carrying on from Sir Ashley’s. You are, as an organisation, subject to a public bodies review at the moment. Can you enlighten us as to whether that is coincidental: was it due or is it a response to perceived failings? I am looking at some of the responses to that review, from the Bar Council and the Law Society. Presumably you have some inside knowledge here. Both criticised your reshaping legal services strategy. The Law Society said the LSB tends to follow rather than to lead and you haven’t taken initiative on most of the main issues that are affecting the legal professions at the moment—legal aid deserts, the reduced number of legal aid practitioners, the growing courts backlog, worsening legal aid and significant barriers to accessing legal services for small businesses and disadvantaged groups. As I say, it said the LSB tends to follow rather than lead. Meanwhile, the Bar Council says that your organisation “plainly over-reaches” its role as an oversight regulator. Do you agree that your recent business plan focuses more on core regulatory activities? If those were TripAdvisor reviews, they would be one star, wouldn’t they?

I do not think it is right to say that we follow rather than lead. We have set an ambition through our 10-year strategy, which was published in 2021, to drive change through the sector to achieve fairer outcomes, better services and stronger confidence for consumers. That is what we are trying to do through the action that we have taken over the last several years. I have spoken about some examples; I am happy to talk about more. All public bodies must of course undergo the public bodies review from time to time. We have not had one since 2017. We welcome the review. We want to make sure that we learn, adapt and improve, as all regulators should. Of course, the strategy that we set and the leadership that we provide tries to deliver through a system that is complex, where we oversee eight different frontline regulators. We must work through those regulators to solve the challenges that we set out in the strategy. That is the leadership role that we seek to play, and we have inspired action through that strategy. That is how we try to provide value across the sector in our oversight role, through convening discussions, leadership, effective regulatory action, and enforcement action where it is needed. I would argue that all those are examples of leadership, and not of following. On the Bar Council’s points, I think that we are at a juncture where we need to make sure that the action that we have taken over recent years results in real change for consumers and the public. That means making sure that real change is delivered by the ethics work that I mentioned, the consumer protection work that we are taking forward, and the enforcement action that we have taken against the SRA and through the undertakings of the BSB. That will require us to strengthen our regulatory oversight and ensure that those changes make a real difference. That clearly goes to what the LSB is here to do.

I think that helpfully takes us on to the questions from Vikki Slade.

I want to focus on your work on access to justice. One piece of written evidence submitted to this inquiry suggested that access to justice is actually “not a strategic priority” of the Legal Services Board and that, potentially, the narrow make-up of the Board—with its very limited number of people with any background in innovation and funding or with lived experience of trying to access justice—was having a negative impact on the Board’s ability to focus on and prioritise access to justice. Do you have any comments on that?

Access to justice is one of the regulatory objectives that we are required to pursue, so it is absolutely a priority for us. As the oversight regulator, we take action primarily by delivering through others. Perhaps I can talk about some specific examples of actions that we have taken?

Yes, I was going to ask you to provide examples of how you interpret your obligation to make that happen.

Of course. Perhaps I will talk about three examples. We can use the levers that we have available to us in the Act to create change through the regulators. We have put in place statutory guidance, with which the regulators must comply, that set expectations for them to promote the use of technology and innovation to ensure that their regulatory frameworks are open to new forms of service delivery, to reduce unmet legal need. We are keenly aware that, at the moment, a third of people with a legal need have that need unmet. We need to find ways of ensuring that the regulatory framework is open and available to new entrants who want to provide services in different ways that will reach people.

Before you go on to the other two examples, how are you making sure that the huge number of people who are digitally excluded are not excluded by moving on that much in innovation and technology?

That is a really important question, particularly as parts of the country are not as well connected as others. When we say that the framework should be open to technology and innovation, that does not imply that it should be closed to traditional face-to-face methods. Both are important and we must ensure that the framework is capable of dealing with both. We have also taken steps to empower consumers through a statement of policy that requires regulators to ensure that there is price information, information on quality indicators and a single digital register—the so-called regulatory information service, which is a one-stop shop to get information about regulated professionals. The second area is research. We have a key role to play. We undertake an individual legal needs survey every four years, in collaboration with the Law Society, and that provides a strong and robust evidence base that helps us to understand the prevalence of access to justice issues. As I mentioned, it found most recently that a third of people with a legal need had that need unmet, but that is higher for particular groups: it is higher for women than men, higher for disabled people, and higher for people in lower-income households or in deprived areas. Thirdly, we provide advice and assistance, particularly to others who are well placed to make a difference. Regulators are clearly in a position to make a difference, but some of the more powerful levers sit elsewhere. For example, the Government are consulting on their proposal to introduce a scheme to generate interest from lawyer client accounts to fund services in future. We have contributed to that. We provided advice on how it might be developed and recommended that it ought to be focused on raising money specifically for access to justice, rather than general Ministry of Justice priorities.

On that unmet legal need, what is the role of the Legal Services Board in broadening the public’s understanding that they even have an unmet need? You talk about a third of people not accessing it, but what about the hidden third of people who do not know that they have been done an injustice?

That is a really important point. One of the regulatory objectives is to improve citizens’ understanding of their rights.

Give me an example of how you are actively doing that.

There is a tool called Legal Choices, which the frontline regulators run, and we oversee their role in doing that. People can go there for information about how they find a lawyer, about the type of legal issue they might have and about understanding, in the first place, whether they indeed have a legal issue. That is an important facility for people to get information that will, hopefully, ultimately help them address their unmet need.

Who are you working with to make sure that that information gets down to people who are visiting food banks or people who have turned up at the courts? There are all sorts of organisations, and I am not necessarily going to go looking for something. I am interested to know how you work with real-world organisations, rather than just through your very technical professional bodies, to get that information out to Joe Public.

We have relationships with law centres, Citizens Advice and the Access to Justice Foundation. We go out three or four times a year, or more, to different parts of the country, and hold events at law centres or at Citizens Advice clinics where we engage with people on the ground—people providing services—and try to link up those aspects of the framework, as you say. As the oversight regulator, we are not absent from those real-world things.

On that topic, I am a solicitor—I practised for nearly 14 years—and I have never heard of this website. I spent a year supervising in a law centre, and I am not aware of you having any contact with our law centre about this in that time. You say that you do a lot of promotional activity, but I was a local councillor for nine years. We saw people with these sorts of problems all the time. I do not think my MP team know about this service. I would have promoted it to them if I had. Do you think the information is getting out there?

Clearly, it sounds from your experience like more needs to be done to make sure that this website is well known. We, the frontline regulators, and the representative bodies can absolutely do more to signpost the availability of information.

That is a really good point, and I suppose it comes back to my first comment, about the makeup of the board and how you get there. I am with you, Sarah—I have never heard of them either, and I was a leader of a council, so I am sure it is something that would have come through. How do you hold the organisations that you regulate to account in their work delivering access to justice, given that it would appear that perhaps the direct element is not working quite as it might?

We have a set of standards and characteristics, and the regulators we oversee must provide evidence to us that they meet those. We scrutinise them on that basis. In that set of standards and characteristics are requirements for them to explain and show us how they, for example, ensure openness to technology and innovation to enable access to services—to ensure that consumers in all their diversity are able to access services—and to explain and show us that they have an access-to-justice policy in place in their organisations. Those are the things that we would look for evidence of and assess their performance against when undertaking our oversight role.

I hope I am not being disingenuous. It sounds to me as though you check that they have those policies in place, but I am not sure how you measure the outcomes and that those policies are working or improving access to justice, so can you say anything more on how you do that?

Measuring outcomes clearly is really important, and we are doing some work at the moment to invest in our ability to evaluate, monitor and measure the impact of our work. I will say, though, that there are a number of indicators that already exist and that we look at very carefully. The Legal Services Consumer Panel’s tracker survey, for example, gives insight. The research I have mentioned in relation to the individual legal needs survey clearly gives us a good baseline whereby we can measure over time the prevalence of unmet legal need and how that is changing. We have an equivalent survey for small business users, which is running at the moment and will provide evidence in that area. I agree there is more to do to improve outcome measurement, but we have some indicators at the moment.

You reference the Legal Services Consumer Panel, which has talked about a regulatory sandbox approach. Is this something that you have considered or do you think that what you are doing at the moment is sufficient?

First, may I really welcome the report that was produced and that we co-commissioned with the Legal Services Consumer Panel, “Regulatory Leadership on Access to Justice”? This recommended, as you know, that a regulatory sandbox be pursued. We completely agree that would be really valuable and we developed last year a proposal whereby we sought to secure funding through the Regulators’ Pioneer Fund, in collaboration with the SRA, the BSB and the Alan Turing Institute, to develop a sandbox that would allow providers to test innovative products, new forms of service delivery that would help reduce unmet legal need. Unfortunately, that proposal was not successful, so we are now looking at another way in which we can take forward a voluntary sandbox initiative to provide that kind of space. I should say that some of the frontline regulators already have innovation programmes whereby people can come and test new forms of service delivery, so this is not absent entirely. I am sure the SRA will be able to talk to you about their innovation programme and how that has allowed companies like Garfield AI to come in and provide a wholly AI-delivered legal service that helps small businesses recover unpaid debts. There are other examples in that report where we really welcome the recommendations and are looking at how we can progress them.

You just talked about Garfield AI, and that is an extremely interesting model. Do you feel that your regulatory framework works?

One of the real advantages of the 2007 Act is that it is permissive legislation. It has quite a lot of flexibility built in in terms of allowing and enabling new forms of service provision. It is fantastic that therefore Garfield AI was able to come to the SRA and be authorised to provide a service delivered through AI. We have clearly seen two alternative business structures set up, so there was a lot of flexibility in the Act to enable new types of service delivery. What we have done through putting in place statutory guidance for the regulators is make it very clear that their frameworks should be open to innovation and facilitative of new technology, all with the outcome of reducing unmet legal need in mind.

In theory, that all sounds fantastic. There are obviously significant problems with AI models hallucinating. There are significant problems with AI models having inbuilt biases, in respect of both race and sex. How does your current regulatory strategy look at that?

That is absolutely true. What regulators need to do and what our guidance requires of them is to balance the opportunities and the risks and make sure that their frameworks ensure that accountability rests where it needs to. For example, legal professionals who rely on AI to give advice must ensure that they are comfortable and confident that the advice is in line with their professional principles. Of course there is a growing sector—the unregulated sector—where people are increasingly looking for advice and solutions to solve their legal problems, which will be delivered through AI, and which the regulatory framework does not cover at the moment. There is a very strong case in the future—we are looking at this at the moment—for greater oversight of the unregulated sector, such as through a voluntary standards initiative, which the Legal Services Act allows for. I also think those developments raise questions about whether the reserved legal activities, as defined in the 2007 Act, are right for the market that we find now, and the market that will evolve in the future. Those are questions that I fully intend to look at now in my capacity as CEO, and I think they will be a real focus for us over the coming years.

What extent of protection do you think the public need from AI?

That is a really great question. We are doing some research right now to understand exactly that, and to understand people’s perceptions of using AI-driven tools, including whether they feel that they are protected already. What that shows us is that people are not naïve; they understand that the advice you get through one of these tools may not be reliable. Also, there is increasingly an expectation that something that has the presence of being a regulated service would provide recourse to redress when things go wrong, which is not the case at the moment. If it is outside the regulated sector, consumer law would clearly apply, but not the recourse to the legal ombudsman, for example. It is those sorts of issues that I think we now need to look at to ensure that the scope of regulation is sufficient to cover the way in which people are now engaging with a fast-changing market.

You commented that the case for a review of the reserved legal activities is growing. Which reserved legal activities do you think need to change?

That is the key question, and that is what we need to do in undertaking the review. We need to be led by the evidence and look at whether the six activities that we have now are sufficient for a sector that is, as I say, changing rapidly, and where there is growing use of services in the unregulated sector. We want to work with stakeholders to gather the evidence to support a review, which would ultimately produce recommendations for Ministers on whether the boundaries need to change. That is precisely the piece of work we need to do to understand what the evidence says about where the line may need to be drawn in future.

What work, if any, are you doing on AI bias? How that will be managed within the sector?

We are working really closely with the regulators that we oversee, through our technology and innovation forum, to ensure that they are cognisant of those risks and taking appropriate steps to mitigate them through their own regulatory activities. Clearly, the AI tools themselves are usually developed outside law firms and the legal sector, and they are then deployed by legal professionals. That poses a real challenge in the scope of regulation and how the perimeters of the Act work against that new reality. We are working with the regulators to ensure that they do everything they can, within the frameworks they have at the moment, to ensure that people are well trained—so that they can spot information that might have come through an AI source, which would indicate whether there is a potential bias, and then take steps to resolve it. At the moment, the levers are not directly applicable to the underlying technology.

I want to ask you about your response to the recent Court of Appeal judgment in Mazur. You said that you will “continue to hold regulators to account” to ensure that there is a clear approach across the sector to reserved legal activities. What does that mean?

We welcome the Court of Appeal judgment and the clarity it provides about how the reserved activity of conduct of litigation should be applied in practice. We published a report in January that found that, prior to the first Mazur judgment in the High Court in September, there was evidence that the legal services regulators and the representative bodies had not put in place guidance that was co-ordinated sufficiently, and that was inconsistent in places. We are now working really closely with the regulators and representative bodies to ensure that the guidance now in place for the profession, post the Court of Appeal judgment, is consistent, comprehensive and effective, and that all legal professionals have clear, effective advice on which to make decisions about how they practise. The judgment itself is helpful in that it goes into quite some detail about where the line on supervision should apply and what authorised and unauthorised persons may do. Clearly, that detail is to be worked through by the regulators to ensure that it is adhered to.

What had been issued by your organisation in relation to this before the High Court judgment, and what had been issued between the High Court judgment and the Court of Appeal judgment? Because we are all over the place on this, aren’t we?

I would certainly agree that prior to the judgment, there was inconsistent advice in place. That is absolutely clear: inconsistent advice and guidance on the interpretation.

From you?

We had not put in place guidance ourselves on the matter of conduct of litigation, because clearly it is for the frontline regulators to advise their regulated—

Yes, but your job is to regulate the regulators.

It is.

So what have you done? I recognise that you have only been there since January and that I am asking you to speak for your predecessor organisation and leadership, but something, I assume, was done—or was it not?

I think we were not in a position to understand the extent of the inconsistency in the guidance that existed prior to the Mazur judgment.

Sorry to interrupt you; why not?

Clearly, the conduct of litigation, a reserved activity, was itself open to interpretation and required two courts’ judgments to provide clarity on it. However, I fully agree and accept that more should have been done to ensure that the guidance in place at the time, and the advice provided to the sector, were more consistent and co-ordinated. I do not know specifically why that might not have been the case in the past, but I can say that we are now working very closely and convening all those regulators and representative bodies that deal with conduct of litigation to ensure that advice in place post the judgment is co-ordinated and effective.

Are there any other areas of your remit where you fear you might find yourselves in the same situation going forward?

That is an excellent point. I wrote to the regulators and representative bodies on 1 April, the day after the Court of Appeal judgment was published, and set the expectation, as was set out in the interim report that we published in January, that they review all areas of their activity to ensure that there is no scope for misalignment against other areas of reserved—

So you are asking them to regulate themselves. Where is your place in this? What have you spotted that you feel should be dealt with?

We are asking them to provide us with information on what they are putting in place for their regulated communities, which will allow us to look at whether there are inconsistencies. However, we clearly need the regulators to take responsibility too for the guidance that they put in place for their parts of the sector.

Thank you. I would now like to move to this: in its submission to the ongoing public bodies review of the LSB, the Legal Services Consumer Panel identified a number of consumer-facing reforms, such as meaningful quality indicators and comprehensive price transparency. Those, I understand, remain undelivered, so why is that?

There has been some progress since we put in place a requirement for the regulators to ensure that price information and quality service indicators are available to consumers, particularly in areas such as conveyancing. We see a lot more price transparency than was previously the case. I can provide a statistic on that if it helps. Price transparency in conveyancing has improved, with 88% of firms publishing prices in 2024, up from 73% in 2020, but I fully accept that progress has been slower in other areas. We need the regulators to ensure that the firms and professionals they oversee are providing transparent information on price and quality to meet the requirements of the statement we put in place, following on from the CMA’s market study on this issue.

What levers do you have to make up that 12%?

We require the frontline regulators we oversee to make that improvement.

How do you make them do that?

We set the expectation that they should. Obviously, we have levers available to us, and we have acted—I have talked about the enforcement action we have taken already. That is an option where the statutory statements of policy that we put in place are not met.

Do you feel you have the powers and expertise to influence the improvement of services? If 12% of firms are not being open and transparent, and you are asking and asking them to do so but absolutely nothing is happening, then I sense that you do not have the power, but I might be wrong.

We do not have a power in relation to the law firms in particular, but we do have a power in respect of the regulators that we oversee, and importantly, they have powers in relation to the firms and individuals that they oversee. As you know, it is a system where the oversight regulator delivers through frontline regulators to make change for consumers.

I have to say, I have some sympathy with Sir Ashley’s view; you are not able to flex that muscle to make changes. It is surprising to find out that 12% of firms are clearly not complying. That is a difficulty. Your organisation has stated that it is not opposed to reforming the Legal Services Act 2007, and that any future legislative framework must be one that “puts consumers first”. What does that mean?

First, I should say that there are a number of options for reform in the Act that can be taken forward without primary legislation. I have talked about our ability to make recommendations to change the scope of reserved activities. We can make recommendations to Ministers to modify the tools and powers available to frontline regulators, such as, for example, fining powers or their ability to regulate entities, not just individuals. Those powers exist, and changes have been made in the past by using them. There are other things we can do under the legislation as it stands, and it is incumbent on us all to make sure that we exhaust the levers available in the current Act. If the Government decide to review the Act, we stand ready to support that review. One advantage of the Act as we have it at the moment is that it sets clear regulatory objectives that put the consumer at the heart of the regulatory framework, so the need to protect the interests of consumers and of the public is clearly set in legislation. When we talk about any reform needing to make sure that the consumer is at the heart of this, we mean it should retain those types of objectives to make sure that it is rooted in the public interest.

You would have had discussions with the Ministry of Justice about that. Is that an open door?

I have regular conversations with the Ministry of Justice and a good relationship with both officials and Ministers. Of course, the decisions on whether to review the Act are ultimately for them, but they certainly know that they can seek advice from and discuss it with us at any opportunity.

You may have covered this already, but just for the avoidance of doubt, do you think that the outcome of the public bodies review will show that you are a necessary organisation? I accept that it is difficult for you to be impartial in such matters, but are you minded to look at a single professional legal services regulator as an alternative?

We are engaging with the lead reviewer of the public bodies review. It will be for them to draw their conclusions. I am certainly working on the basis that there will be a Legal Services Board post this review, and we will take the benefit of the learning that we can get from such a review to ensure that we are as effective as possible in discharging the duty. I am really proud of the work that the LSB does, the people that we have and the steps that we have taken over the last one or two years. We are using the powers available to us in the Act as it stands to take enforcement action, to set a direction and to drive change through the regulators that we oversee, and we will continue to go forward on that basis.

So you are happy with the 2007 settlement, and you cannot see how that could be improved upon.

Ultimately, our job is to work within the framework that we have and make the best of it. We have to drive change through the levers that we have, and that is what I am focused on doing. If the Government decide to review the Act and pursue a different form of legislation, of course we will work closely with them in that capacity.

Thank you very much for your time. We have overrun slightly on your session, so thank you for being here. I will adjourn for a couple of minutes to change panels, but we will be back before 3.30 pm. Witnesses: Aileen Armstrong, Anna Bradley and Sarah Rapson.

Welcome back to the Justice Committee for our second panel on the subject of access to justice, looking particularly at regulation of the legal profession. We have witnesses from the Solicitors Regulation Authority. Would you like to briefly introduce yourselves?

I am Anna Bradley, and I am the chair of the SRA. This is my eighth and final year in role. I conclude my term at the end of December. The board will shortly be looking for a new chair.

I am Sarah Rapson, the chief executive of the SRA.

I am Aileen Armstrong. I am the executive director of strategy, innovation and external affairs at the SRA. I have been here for about three years.

Very good. You will have picked up from observing the previous session some of the areas that we want to cover. This is in the context of our inquiry into access to justice. How does the SRA interpret its obligation to improve access to justice under the Legal Services Act 2007?

Can I just begin, if you will allow me, by asking Sarah—she did not say this, but she is our very new chief executive—to briefly describe the priorities that she has resolved that we need to address? I think that will be relevant to everything that we have to say beyond that. Then I will come back to the access to justice question.

Yes, of course. We are going to ask reasonably open questions, and I will leave it up to you who answers them. I will stop you if you go on for too long, and if more than one person wants to answer that is fine. If you do not wish to, that is also fine.

That is fantastic to hear; thank you very much. For a bit of scene-setting, I will pass on to Sarah.

Yes; this is month five, so as I should have said, I think I still count as relatively new. I have spent the last four or five months getting out and about, talking to stakeholders and doing some serious listening and diagnosis of what the issues are in relation to the SRA and what the organisation does well. I have spoken with a huge range of people from the profession in some of the bodies, other regulators, Government, other consumer groups, individual consumers and our own staff. I have formed a bit of a diagnosis, which I think is probably helpful to share with the Committee, particularly given what you touched on with LSB colleagues a minute ago, but also more generally. The SRA clearly has some issues. We will no doubt get on to things such as Axiom Ince and SSB. We have had some adverse costs against some of our enforcement activity as well, so it is important that we do not duck those issues. There are some issues that the regulator needs to resolve. The market is also changing; the regulator was created back in 2007, so we are nearly 20 years on. The market is fundamentally different now from how it was back then: there is more consolidation, more firms changing business model, ownership changes and things such as high-volume consumer claims, which we did not have a number of years ago, and technology. The other thing is that we are getting a significant increase in the volume of reports regarding solicitors, which is proving quite challenging. Put simply, the firms, the people and the market are changing, so we need to change as well. The idea that we are a steady-state regulator is not where my diagnosis takes me. We need to be more proportionate and efficient; we need to be a modern, trusted regulator with a focus on consumer harm and on data and risk, and be more proactive about the work that we do. There are four priorities that I have set out in lots of public engagements and with our own teams around us being more operationally excellent. That means that we have to improve how we manage our cases: are we taking the right cases through in a sufficiently timely way? That is really important, not least given how many reports we are getting about individual solicitors. Secondly, it is about moving from being reactive to being more proactive so that we can spot harm before it happens, if it is possible to prevent consumer harm, and using data and intelligence to do that better. It is also about making sure that we are proportionate and reducing burden where it is possible for us to do so, because we have a contribution to make to things such as economic growth. In a world where we cannot do everything—and we cannot do everything—there are some big-ticket items that we think need to hit the list. One of them is high-volume consumer claims, because we believe we have a fundamental role and can make a difference where we spot harm. In other areas, such as ethics, we sit in the organisation with over 20 cases on Post Office. Ethics in the profession is a really important point and we want to spend some time during this year working also with the LSB and the profession on ethics. Finally, there is collaboration. It is really important for every regulator to make sure that it is close to the regulated community. We do not necessarily know ourselves what impact we have on the profession itself. We will not have all the answers to some of the intractable problems that there are in the sector. At the highest level, I firmly believe that we all have a shared interest in making sure that this profession is trusted and confident, that we are protecting consumers from harm, and that the market can thrive. We might have different parts to play in that system, but at the highest level we are all bothered about those things.

I hoped it would be helpful just to set that scene. To go back to your question, as you have heard, access to justice is one of nine statutory objectives that we have to balance together. We think they are interlinked and actually mutually reinforced to quite an extent. However, sitting above all of that, I suppose we would describe our mission as being to protect the public and to drive trust and confidence in legal services. In respect of access to justice, we would say that our main contribution, therefore, is to promote high standards that give the right level of consumer protection, while at the same time ensuring that we do not put up unnecessary barriers to innovation or growth and we do not over-regulate. That is a fine balancing act, as you can imagine. It is embedded in everything that we do. If you like, we use the access to justice principle as a test or a hurdle that needs to be taken into account in every decision that we make about policy, enforcement, intervention or whatever it is; it is something that is there as part of our decision-making framework. That would be the way that we approach it.

Is that a proactive role? You said that time has moved on since the Legal Services Act. That is where the obligation to improve access to justice comes from. Do you think that it is still relevant? And is it a reactive thing, which is what I thought you were saying there, in that you make a judgment when you make decisions and when you are looking at standards about what impact that has on access to justice? Or do you think, given that we clearly have a crisis of access to justice both geographically and in areas of scope, the SRA has a specific role in helping to plug those gaps?

The truth is that we do not have a given role in order to plug those gaps. What we do have is a role, we think, to try to ensure that we do not stand in the way of those gaps being plugged. We certainly see opportunities in relation to technology, which I am sure we will come on to later, to support that. That is one of the more proactive things that we would seek to do in that environment, as we would proactively seek to work with third sector agencies and other people in the advice sector, where actually technology is not going to prove to be the right answer, but face-to-face advice is—probably not delivered by a lawyer in the first instance at least, but by third sector agencies. We will work with those agencies, as well.

We do not have a separate project, off to the left, called “access to justice”. That is a deliberate choice, because this is about it being woven into everything that we do, and we take opportunities when we—

If you are saying that is not your role, so be it, but it is a bit of a reductive view, isn’t it? You are you are saying, “Well, obviously we are regulating and if we see something that is not working, then we will whistleblow on that, or we will intervene on that.” But if you are seeing that service simply is not there or is inadequate in some way, then you are saying, “Well, that is nothing to do with us.”

There are opportunities where we can and do step in, so perhaps it has come across as a bit too binary, in a sense. For example, I know this not the whole story, but in my first few months I have met a number of representatives from the pro bono world, and we are talking about: “What is regulation? Where is regulation in the way of our then being able to provide support for people who otherwise cannot get access to justice?” Some of it is practical things that we can do, such as putting our specific guidance for this sector much more up front in places such as our website, because they say it is actually hard to find. We are also going to host a roundtable to bring some interested parties together and go through, systematically, what are all the things in the way. You will find that some of it is actually just about myths. People can do more within what is actually an outcomes-based regulatory approach than you might think. Certainly, that has been my experience in regulating other sectors: you can do more than you think in a principles-based, outcomes-based regulatory system, and that can still be proportionate and in context. But you need a bit of thought and a bit of time to make it work. We will deal with the different parts of the sector where some help from us might be useful.

If I could give just another instance—we do this in a number of different arenas, including in relation to equality and diversity—one of the big contributions that we can make is around data, by painting a picture for people about what is happening on equality and diversity in the profession and what is happening to service delivery across the country. One project that we ran a couple of years ago was to develop a mapping tool for services, to identify where the deserts were and map those against a whole set of socio-demographic characteristics, to be able to describe the consequences for people of those deserts. So we have information that we can put in the public domain, and we can hopefully encourage people to use that in order to support filling the gap.

You will have heard my questions earlier on about the make-up of the Legal Services Board and how the lack of people with lived experience potentially means that it is not able to do its role as well. I am interested to know what the SRA is doing to make sure that the voices of those with lived experience are coming through. You talk about not putting it in a box on the side, but it is going to be a very legal-driven organisation. Where is the voice of the consumer, inside the organisation, driving that access to justice?

I think there are several examples. To take one around high-volume consumer claims in particular—which, as Sarah said, is a key priority—we are trying to make sure that we are engaging with people at all levels, so we have a real programme of work. To pick out a couple of points there, we have just done some consumer research with 15,000 consumers, to fill in a gap that we saw when we realised just how much of a problem we have in this area. There is not a lot of research that actually says what consumers are experiencing through the journey of choosing whether to deal with a law firm to take a claim. We do things like that, directly hearing from people. Another example would be how, when we are testing our way forward, we will use focus groups. Again, on high-volume consumer claims work, we have been doing a very broad discussion exercise with people, both by engaging with representative bodies and by encouraging people to come forward and share their lived experiences, and when we have put issues out there, we have actually been hearing directly how people are experiencing them. That is the sort of approach we take in our policymaking. Just to pick up the point about access to justice underpinning how we work, it is not right to see it as completely binary. It may be that funding, and so on, is not for us, but what we aim to do when we are making regulation—those were a couple of examples of this—is to be open to innovation, be open to understanding the impact of that innovation on real people, and develop our policies that way around.

You were established in 2007, so the SRA is a relatively recent organisation, but not that new. I got the impression from what you just said that it was probably quite innovative work for you to speak to people who had experience of using legal services. Is that a fair characterisation?

We are doing more and more, so I do not think it is brand new in terms of trying to make sure that the impact of regulation is well understood when you are designing it. In the areas that we are prioritising where it deals with consumers directly, we are actively trying to do more and more, and we are learning as we go. I do not think it is brand new, but in terms of making sure it is all the way through how we are working, we definitely have a clear priority on that at the moment.

What are you doing about costs? To put that comment into some context, I am a solicitor, but my experience of friends and family using law firms is that they have not received transparent information up front about costs and that they have been consistently surprised by the bills that they received. As a solicitor, I found that extremely surprising and thought that was very inappropriate. I am not suggesting that that is a uniform position across the profession at all whatsoever, but it was clearly not one isolated incident. What work do you do around that? It threatens access to justice if people do not ever want to go back and use another solicitor.

I have a couple of points to make on that—I am happy to pick up anything else. The first point is that we do see the value of people understanding the costs. Through some research, we have heard that when consumers understand the costs, it can go both ways. Some people expect that they cannot afford a service, so they keep themselves away from it. Transparency can help bring people towards getting professional legal services from a solicitor. We also have elements such as our transparency rules, which have been in place since 2019. They are about having requirements on solicitors to share information in certain areas, and we have been doing an evaluation of them. There is potentially more to do. Our key role here is making sure it is very clear for consumers when they are dealing with a regulated provider—in our case, solicitors—what the protection is and what you can expect from a solicitor. We have a number of things that we do to try to ensure that. There are also some of the areas that Anna was talking about. Across unregulated areas, there are possibly things that can signpost and help open the door to options that may eventually lead to a solicitor, but may just help with identifying whether one has a legal need in the first place. Last year, we did a piece of work about online dispute resolution and using AI to test what could be useful in that space. We are trying to cover a number of bases.

That is great, but fundamentally my question is about when someone instructs a solicitor, and they think it is going to cost £1,000 but then it actually costs £5,000 and that expectation has not been managed from start to finish in the transaction. They may get a retrospective explanation for why that cost escalated, but it was not flagged to them along the way. Things like that seem not to be unusual, and they should be unusual. What proactive work are you doing about that?

We hear what you say. I do not think we have a programme of work specifically on that.

No, but it did make me think about no win, no fee—I do not know whether you want to go there, but it is an example of it, really, isn’t it? People sign up for something, and they think it is for free, because that is what it says on the front of the tin, and then sometimes they are hit for costs they were not expecting. It comes back to high-volume consumer claims, which is why we think we can help in this sector, because we are seeing harm. We have put out a warning notice. Aileen’s team is working with consumer groups to think about what an alternative could be if you were going to scrap the phrase—and there are reasons why you would not scrap the phrase, by the way—and how we can make sure that terms and conditions are not 26 pages that you sign without reading but are accessible and explain exactly what people are signing up to. We might not cover the whole ground, but where we see egregious examples that fit with the priorities we have set out for ourselves, we absolutely do have tools and will use them to resolve.

There are a number of things that we have to do here. The expectations on solicitors are clear, I would argue, in terms of their obligations. We all know that the obligations are not the full piece of regulation. In addition to the example that Sarah pulled out, handling of complaints and the visibility of a complaints procedure is an important part of this, so that if someone is not getting what they were expecting, they know how to put a complaint through. We have done some further work on that as well.

The reality is that if you have an ongoing legal matter and you need ongoing support, you do not want to upset your lawyer by putting in a formal complaint about them, let alone complain to the SRA in any way, shape or form. My gut feeling is that if you did some survey work of the type that you have described of people’s experiences of costs, that would be really worthwhile.

A connected point is how people are using AI. Some of our research tells us that people are using AI to work out whether they can afford to use a solicitor or not, or to shape what the ask might be of a solicitor. This is a positive outcome of AI, I think.

It might be. It depends if the AI is hallucinating. It depends if the AI is trustworthy.

It depends how you use it.

Perhaps, but as a regulator, that is quite a big assumption.

Well, I was not saying that we can completely rely on AI, but as something to test whether something might be possible before actually going and asking a question that perhaps you do not know how to articulate, it can be useful.

I would not disagree that it has potential.

On the subject of AI, do you feel you have the appropriate powers and competencies to regulate the new technologies and business models?

I will start with the fact that we are seeing in legal services something that has happened in financial services. It has happened much later in legal services, and it is suddenly happening at pace. We were at a meeting with City lawyers this morning, and I was saying that if we were having this conversation four years ago, we would have been just talking about back-office systems, but this is now a completely different world—the bigger firms are developing capability and capacity in the space of AI that most of us can only dream of, because they are investing very heavily in it. This is moving very, very fast. That means that the really important thing for us is the priority that we attach to our work in this space. We have been very focused on technology and the way in which it could deliver benefits, subject to it being properly regulated, for some time. But we are cognisant that this is a new moment, so in our next strategy, which we will be starting to talk about with people during the course of this year and concluding early next year, this will be a major plank of work. Our approach thus far is very much about the controls that we can exercise on the professionals who are using it and the way in which they use AI. That is important because we see the opportunity—we have just rehearsed one example of where there might be an opportunity—but we also think it is critically important that we maintain the levels of consumer protection that people rightly expect. Doing that through the solicitor is the way in which we would ensure that the standards are the same across face-to-face services and digital services. That has been our approach thus far, but I think we are going to have to crank up our work in this area. I do not know whether you want to say a bit more about what we have been doing with some of the newer firms.

Perhaps I can just tell you a bit more about Garfield, which was mentioned in the last session, because I think it illustrates this approach. Garfield has been authorised for almost two years now. We focused our approach to authorisation while keeping in the front of our minds the outcomes and safeguards that we need for consumers. We worked closely with the owners of that firm to really understand what protections would be in place. We verified that the technology they would be using was not autonomous and that there was a solicitor in the loop. Also, in terms of how we have been approaching authorisation of new business models, because we have what we call our innovation offer—an invitation to come talk to us and work through what the issues are with us—we were able to do that all the way through the steps of authorisation. We have put in place supervisory monitoring for that firm. That allows us to understand how it is developing any other issues that come up. We are then able to learn how our principle-based approach works in practice, and that can highlight other issues going forward to feed into those wider questions that Anna was suggesting we should come back to.

If I return to my question, do you feel that the SRA has the powers and competencies that it needs to regulate new technologies? I can see that you are working on it, but do you feel you have the powers? In the long run, for us this is about access to justice. I can understand how individual firms will populate AI with what they want. That might be very good for them, but this is about access to justice for people who do not have access to justice at the moment. Do you have the powers and competencies to control this?

An outcomes-based, principles-based regulatory system ought to be able to deal with new and different kinds of technology. I do not think we have been in the business of going, “If only we had X power, we would be able to do this better.” The challenge for us is to make sure that we have the capability. These are scarce skills—the people who know how to do this. We are a regulatory body and inevitably the market, the sector, is going to move ahead of us. It is just the nature of regulation and markets, isn’t it? We were talking this morning with the CLLS about them providing some secondees or additional capability to help us think through what the regulatory response needs to be. It is moving so fast this month. It would be quite a statement to say that we think we have all the capabilities we need in this area. I do think there is a gap for us here, which is probably to be fairly understandable about just how quickly this market is evolving.

It is not going to stop, is it? There is no end point when you are going to go, “Okay, fine. Now we need this.”

That is exactly right, where the limits of what we can do, start and stop are framed by our primary role, which is to regulate solicitors and firms and not technology. As things stand, we can regulate the way in which solicitors and firms use technology. We can regulate them and advise them on their oversight of their use of technology and hold them accountable for the outcomes, but we do not have a role to regulate technology. Richard already mentioned the huge unregulated market, which is where in one sense one might hope, with a broader access to justice agenda, that a lot of innovation is developed in order to get people on the path to access to justice, but we do not regulate that. That is a much bigger policy question.

Turning to regulatory failure, you have previously apologised for not acting more quickly in recent high-profile collapses of law firms such as SSB Law. How is the SRA changing how it monitors and intervenes in firms in response to these failures?

It is more than fair to say that the events have identified significant flaws in the way that we regulate. Those probably fit into two broad categories. There are a set of things that we do, but that we were not doing as well as we should do. What those events also illustrated was that we need to change the way we regulate as well. There are two complementary, but slightly different agendas. As those events happened, the board and the leadership of the organisation recognised the need for us to learn and adapt as quickly as possible, and we put in place an action plan. More recently, we have been working with the Legal Services Board, of course, around the enforcement action that it has taken in relation to those events. Two different categories of things came out from the lessons learned, from our point of view. One was that we had failed to join up the dots across the organisation. We had a piece of information, a piece of information here, and another one there, but we did not have an in-the-round picture. The second was that the changes in the market, which Sarah alluded to at the beginning, meant that we could not perhaps any longer rely on our approach to three things: the way that firms hold client money, the approach we have to senior management—COLPs and COFAs—and the emergent tendency in the market towards really rapidly growing law firms. We have done a couple of things, both of which are big programmes in and of themselves. One is a programme that we have been developing on improving our approach to data and risk, so that we can be more intelligence led. This is not a small feat. As you can imagine, it involves different capabilities in our people, different resources in relation to IT, new ways of thinking about things, and then cultural change inside the organisation to embed all that behaviour. That is in itself a big thing. We have made significant progress, which the board and the organisation are proud of, but we know it is not the finished article by quite a long way. The second set of things that we felt we needed to do was to look at our policy in relation to the three areas that I outlined. We opened up a consultation—a very green consultation. We had lots of engagement with the sector and others—all sorts of stakeholders—on those issues, the appetite for change and the ways we might learn from how other regulators do these things. We have gone through the first iterations of that process. We are about to discuss next steps and agree what action we might take next in relation to those three programmes of work. There has been significant progress, but these are big issues for us.

PM Law unexpectedly closed on 2 February, putting millions of pounds of client funds at risk. What risks were the SRA aware of prior to its closure?

It closed its doors on 2 February, and we intervened on 4 February, so it was quite a quick intervention. We did not have any warning that the firm was going to shut up shop, as it were. It was very sudden and had a big impact—600 people overnight lost their jobs. It is a firm that has bought up lots of firms, so there will be people who were part of the previous firms for whom their businesses have just unexpectedly disappeared overnight. Over 17,000 clients were affected, because their files and money were held with PM Law, so it was a really terrible state of affairs. Across the 25 offices in the UK, we have managed to secure tens of thousands of files. We have managed to secure money from the client account and we are starting to replenish and refund people, particularly those who are in the middle of transactions such as buying a house. This is really serious stuff. It is a suspected fraud—be under no illusions. We have moved from saying that it is a potential fraud to saying there is enough evidence to suggest that it is a suspected fraud, and there is client money missing. I am really proud of the organisation for its quick response. I have been delighted to meet with Gordons, who are the intervention agents. Their customer care, speed and agility to get people what they need and hand their files to follow-on solicitors have been really good. I have met them and I was really impressed with them. Of course, the broader question is, “Hang on a minute, could the SRA have spotted this earlier? What was the learning from previous issues?” Anna, you talked about the risk and data programme; if that was in place, what would that have meant? To be honest with you, it is still too early to draw those conclusions, but I am absolutely clear that, if we find evidence that perhaps we did not join the dots or we did have data that could have meant that this regulator got there sooner, we absolutely need to learn those lessons. If there is something in there, it might well be that we need to adjust the risk and data programme that we have. I am really determined that we extract every single lesson that we can from PM Law and make sure that what we are building for this regulator of the future is as good as it can be. In terms of what we have done in addition to the work that we already had under way, we have set out a rapid risk review. We want to have a look at how we are supervising and monitoring these firms that are growing really quickly and holding lots of client money. We are running a supervisory pilot, and we are also putting high-volume consumer claims in there because that is the other big-ticket priority for us. We want to push some of the policy areas that Anna just talked through: what we can do to further tighten the controls around client money, and what we could do regarding senior manager accountability. In advance of any policy development and future consultation, can we start to test bringing in some of those extra measures to see whether we can tighten those particular areas where we see there is potential for this harm?

Have you done a review of what complaints you had about this organisation? It bought a lot of firms quite rapidly, didn’t it? Did you have ongoing complaints about it?

That is the data we are gathering. There were complaints about the entity, and we need to make sure that we triangulate between all the different complaints and not treat each one separately, which is the criticism of the organisation as was and, to an extent, still is. We need to make sure that the risk and data programme that we talked about, which will put this data together so that we can see patterns and identify potential harm much more clearly, is working. We are in the middle of that programme of work at the minute.

When does that programme deliver?

Just to be clear, we have commissioned a third-party agency—a law firm—to do that review for us so that we get an independent perspective. Are you asking when we will be at the end of that road?

Yes.

This is a longer answer, in a sense, because we have a set of actions that we need to deliver under the enforcement action from the LSB. We have a set of actions under Axiom, which Anna has talked about, and under SSB. When we have more insight from the review by the independent law firm that Anna has just alluded to, we want to test whether they are the right actions. I imagine we will find that, broadly, we are in the right territory, but perhaps there is some detail underneath some of the specifics of what we need to do on how decisions get taken, for example, that will need to be added into the programme of work. The pilot will help, and rather than saying, “It is going to take us three years and then it will be done and finished”, I am keen that we evolve our approach over time because the risks are going to change over time. We need to have a conversation about the operating model of the organisation to make sure that, whatever might happen in the market, we are equipped for the different kinds of risks that may emerge over time.

In terms of the specific review about the information you had about PM Law, when will that be complete?

I am sorry if I have misunderstood your question. We have had a first pass at it, and we are just setting out for ourselves the detailed scope, but it is going to be a matter of weeks not months.

How is the SRA responding to allegations of mis-selling with regard to high-volume no win, no fee claims?

It became evident to us as we explored SSB that there was a much bigger set of issues. We had a lot of conversations at the board and with the executive, and we commissioned a set of actions that we felt we needed to take as a programme. We wanted to move from dealing with an event to looking at a deep and wide programme that would help us to identify and manage the risks in the sector as a whole. We particularly wanted to do that, as colleagues have already alluded to, because we see a huge potential value in the high-volume consumer claims market. We see it as offering real potential to enhance access to justice. A lot of people who have claims in that sphere would not normally use lawyers, but there are all sorts of pitfalls. We wanted to try to create a programme of work that can give more assurance about the quality of the offer and still deliver the benefits for consumers. That programme—we can talk about the different aspects of it—is deep and wide. As Sarah described, the supervision pilot that we proposed is now providing us with a bit of a testbed. We have been trying out some new things. One thing we have done is identify what we thought were all the firms that operated in this space. There are far too many of them for us to imagine going in and visiting and instantly doing a direct, hands-on investigation of any form. We chose to do something that we had never done before, which was what we called a declarations exercise. We wrote to the senior leader in each of those firms and said, “This is what we expect, and we want you to check that you are doing all the things that we require in the way that you think is right and proper. We want you to sign to say that you have done that review and, if there are actions that need to be taken, you have identified what they are, and you have a programme for addressing them.” To be frank, we did not know how many people would agree to do that, because they do not have to. Our power to demand information from the profession hinges on our opening an investigation. We had not opened an investigation, and we were asking them to give us the information because we thought that was the right thing to do and we did not know how many would respond. They have pretty much all responded. That is a huge dataset, which tells us so much more about how much business these people have, and how much litigation funding they have. It means that we can begin to prioritise our work around where we think the biggest risks are emerging. We are continuing to do that, but we have also done a lot of work on the consumer side. Do you want us to say a bit more about some of the things we have done? Would it be helpful for us to go there?

I am a little conscious of time, so we will have to speed up a bit.

SSB Law ran a portfolio funding business model which the Civil Justice Council has recommended should be regulated by the Financial Conduct Authority as a type of loan. Do you agree with that?

In terms of litigation funding generally, I think the regulation of funders is beyond our remit. But yes, we support the idea of regulating litigation funders. We do not have a strong view on exactly where that should live, because I think that would be for Government. We recognise that funders are unregulated at the moment. There is potentially an opportunity across money laundering, sanctions and other things. We think that proportionate regulation that can control risks without closing off legitimate models would be sensible.

That is super. I have one last, very short point that I want to make. In my constituency, there is an ongoing problem with leaseholders whose estates have subsequently not been adopted, who do not understand the service charges they are going to be subject to on an ongoing basis and who have not understood the risks associated with buying their properties, which potentially have huge associated liabilities with incomplete and inadequate sewers, incomplete roads and unadopted street lights. The potential liabilities for these householders are huge. I have knocked on many doors, and I am yet to speak to one of them whose solicitor had really explained what that risk looked like. I ask you to please go away and look at whether, as it stands, conveyancing is working for people who have leasehold properties. My strong feeling is that it is not.

We have a couple of other areas to touch on, but I will just finish up on what we have been talking about. We have talked about regulatory failure, significant firm collapse, adverse cost judgments against you and censure by the LSB. Frankly, that is not a very good record, is it? I appreciate, Ms Rapson, that you are new to this and have perhaps come in to tackle those issues, but you, Ms Bradley, have been there for a long time. I know you said you are going quite soon, but do you take some responsibility for that?

We absolutely accept responsibility for the fact that these events have happened in the way they have, and that they have shown us to be wanting. The really important thing for us as an organisation is to make sure that we have identified the learnings and that we are acting on them as soon as possible. As I said in my comments when we talked about the specific regulatory failures, we have seen two different kinds of issues emerge. Some of them were because the organisation was not operating as well as it should have, and some of them were because the organisation really needs to change. Its regulatory model needs to change. There are different responses to those two different things. What became really clear is that we need to change faster. You are absolutely right that a new chief exec and a new approach will—the board hope—mean that we have new focus and pace on the need for us both to improve the substantive and to change the model. I am glad to say that is what we are seeing happen. We are making good progress.

It is really important that this organisation is not defensive, that we own these issues. That is where I started the session today, to come forward and say that we know we have big issues. We know that we are not the regulator that we need to be for this really important sector, but we are absolutely committed to making it better and to tackling some of those issues, such as SSB and PM Law. A regulator cannot prevent every single firm from ever failing, but where they do, we need to make sure we have done the right thing. There is a lot to be positive about here, and I have been really struck by this, not least that our teams—so the 800 or 900 people in the organisation—are ready for change. I have been in organisations where it is normally, “Oh, not more change”, or, “Can we just change it by having no more change for now?” That is not my experience of this organisation. We have a leadership team and a board, as well as people across the whole organisation—in Birmingham, Old Broad Street and Cardiff—who are really up for changing this regulator, because they are also out and about talking to solicitors, hearing what solicitors might be saying about their regulator, and sometimes that is quite uncomfortable listening. There is an opportunity here to make this the modern, effective regulator we all want it to be.

We do not have a lot of time. I am interested in the leasehold point. A lot of people are buying park homes and do not even have conveyancing. Park homes in my part of the world are more expensive than bricks-and-mortar houses in many other parts. I am really interested to understand where we take that. I want to touch on legal ethics. There has been a suggestion that solicitors are not prioritising their duties to the court and the rule of law—there are some famous examples we can talk to—and are disproportionately focusing on their client. What are your thoughts on the LSB statement of policy on upholding ethical standards?

Every profession has to have ethics at its heart. That is the whole of being a professional, isn’t it? My experience recently was regulating the auditors. Ethics is at the heart of what is another noble profession. It is quite complicated here, because you have the client interest and your responsibilities to the court. Perhaps when those principles are not in competition with each other it is quite easy to work out how to behave in an ethical way. Sometimes those principles are in conflict with each other, aren’t they? It is in the grey area that we can help. Where there is a particular issue and a solicitor is not quite clear how to step in, we have a professional ethics helpline. We get 25,000 calls a year from lawyers asking questions. The help desk is staffed by people from the profession; they are solicitors. I have listened to some of their calls. It is a very impressive team. If people do not quite know how to navigate a particular conflict of interest or whatever, we would just encourage them to give us a call. We would also agree that there is more to do. We fully support the LSB’s recent publication on ethics. Aileen might want to pick up the story. We have some initiatives that we want to do ourselves this year to make sure that solicitors continue to think about ethics throughout their career, not just at the qualification or entry point.

Briefly, we will be bringing forward a consultation on continuing competence very soon. Lots of research suggests that things like facilitated group discussions are one way to enable people with the right skills, support and confidence to tackle the really difficult issues. One idea we want to consult on is mandating participation in an annual discussion facilitated by a solicitor to really draw that out. We think that will build on the requirements that we have already in terms of those really difficult issues, where there is no substitute for working through. It is about how we can help.

On a similar topic, according to what I have been reading today, there are more complaints about solicitors than at any time on record, with a predicted 14,000 this year. Something is clearly not going very well. The legal ombudsman is apparently not working as it should. Do you accept the Legal Services Consumer Panel saying that complaints handling is poor and regulators are “overly laissez faire”? What are you doing with the legal ombudsman to try to improve things?

I think it is quite confusing for consumers to know whether to come to us or to go the legal ombudsman. We will take complaints if it is about the conduct of an individual professional and LeO will take the service complaints. If there is a pattern of service complaints that might be conduct, it is back to us again. Honestly, as somebody relatively new to the sector trying to work out how on earth a member of the public would know which of us to come to, I think it is really difficult territory. We know that LeO has backlogs. I think I mentioned that we are also getting high volumes of reports about solicitors, so our work in progress is also increasing. It is not a happy tale. There are a few things. Technology is part of the reason for the increased reports. I mentioned earlier that it is helping people to complain. They should complain and that is a good thing, but if it is helping people to complain who should not be complaining or if it is vexatious, it clogs up the system so that people who genuinely have had harm done or need redress are not able to get it because we cannot get to them, so it is an issue. From our perspective, we are a bit worried that people think we are an ombudsman. We are behaving like a quasi-ombudsman in some senses.

I am not a legally involved person, and I am mortified by the complexity of the regulation in this sector. I do not know how people manage. Is having two regulators—an ombudsman and a regulator—perhaps part of the problem, and should we look to propose that you do both sides?

That is a great question. I am glad it has come up today, because we feel quite strongly that we want to have that conversation in the sector. If you are a member of the public, how do you know where to get redress? People come to us expecting redress, but what do we do? We can open an investigation, but that is never going to put you back to dealing with whatever the misconduct was with the solicitor. You might have lost money, but that is not what we are there for. As we have talked about, we have to do a far better job of taking the intelligence from the individual reports about solicitors and joining it up, so that we can tackle firm and more systemic harm. That is where we can genuinely add value—spotting the SSBs and PM Laws of the world as opposed to dealing with individual complaints. Our resource is being used to do that, and we are missing the bigger issue. We would love to have a conversation in the sector, and to work with the LSB on the nature of ombudsmen and complaint handling in the sector.

If I can pick up on that, Anna, I think you said in 2022 that there was “an appetite” to move towards a single legal services regulator. I wonder whether you still feel that is the right way to go, and whether a single legal services regulator would be preferable to the current situation.

When I spoke about that, which was when we last came to the Committee, I was referring to the mood in the sector and among its spokespeople. We need to very careful about saying what we think the answer is.

You can be free, because you are just about to leave.

When I am closer, perhaps ask me again and I will tell you what I think. There is no question but that the current set of arrangements causes everyone difficulties. We have just described how they cause consumers difficulties because it is not clear where they should go and who is responsible for what. We think it causes all sorts of issues about accountability. There is confusion about accountability for us as a regulator. We have our own board and an oversight regulator. Of course we stand willing and happy to talk with Ministers, and we do, but their direct line is to the LSB. Here we are at the Justice Committee because we think it is in the public interest that we come to you, but not because you actually play that formal accountability role for us.

We do expect people to turn up, though.

Of course, and we would not think of doing anything else. I am just saying it is not baked into the set of arrangements as an expectation, because there are other arrangements. We also have a relationship with the Law Society, because we continue to be its subsidiary. At least for accounting purposes, our accounts and reports of accounts are subsumed under there. These are complexities that we negotiate, and we think it is our job to make sure that we negotiate them with the finesse that one can and try to make the system that we have work. But there is no question but that if you sat down with a blank sheet of paper, this is not what you would design. The question for policymakers has to be, is it time to have another think? If there is an appetite for that, we would be happy to engage.

There is a lot of buck passing, isn’t there? The Legal Ombudsman, which you were just talking about, is saying that its backlog will either increase or not because it has not been given a sufficient settlement, because that was blocked by the LSB. Maybe you will find you are getting more work as a consequence of that, and you will then be censured by the LSB for having a backlog in that way. For a member of the public, you do not know who to follow down what rabbit hole, do you?

I agree—it does not make any sense, and I would not design it this way if I was asked to design it. But our job on a daily basis is to try to make sure that it can take over and work to the best effect. We owe that to the public interest and to consumers.

If you were going to start with a blank sheet of paper, what would we have?

We do not have an official SRA view on that.

No, but you have the experience.

My exiting view would be that it is time for that review, and reducing the numbers and clarifying the roles is going to be a really important part of that, because I think it is too complicated. Clarifying the roles goes back to the point that Sarah was making about the relationship between an ombudsman and a regulator in terms of complaints. It is absolutely time for that. I do not know whether a single regulator is the answer. There are aspects of the current regulatory arrangements, for different bits of different professions, that are very different from the sorts of things that we do. We regulate firms. It is a major part of our work, and it will become a bigger part of our work going forward. Not all the other regulators do. They regulate individuals. The Bar regulates individuals who sell their services to other professionals and deliver services indirectly to consumers. The answer is more complex than just a single regulator.

I do not want to finish on a downer, but I would like to try to unravel some of the Mazur stuff. You just referred to the fact that you have a close relationship with the Law Society, and yet, as far as I can see, if we look at the Mazur judgment, the Law Society took a completely different view from yours. Your effective supervision guidance in 2022 advised solicitors how to delegate work to non-authorised staff. The Law Society’s position was that non-authorised staff may support an authorised solicitor but may not undertake reserved legal activity, even under supervision. The High Court judgment effectively found that the SRA’s previous interpretation of the law was wrong, and then, as far as I can see, you came in contradicting your previous position. I find it slightly confusing, because you then supported the Mazur ruling, and we all go back to where we were before. It seems like a complete dog’s breakfast. How can you expect anyone to feel very confident when you are contradicting your own guidance at various points? What conversations did you have with the Law Society originally, given that you were offering two different views, and would solicitors feel confident that the advice and guidance you offer is lawful?

This was all happening before I joined, and I was watching it with interest. My big takeaway at that point was the human impact of the confusion on people who had thought they were acting within the law.

But you have two organisations, the Law Society and the SRA, that have conflicting views and are issuing contradictory guidance to the very same people

Then you get the initial Mazur judgment, which means that people who have been operating in a particular way for very many years are now unable to act like that. People lost jobs, and cases were taken away from people. You are right to raise the question, but it is really important for all of us in the regulatory system to understand the human impact of the fact that we have ended up here. We did give wrong advice in the Mazur case. It is a mistake—we have made a mistake. Actually, if you look at the overarching guidance that we have had throughout on the importance of effective supervision, which needs to be grounded in judgment, it has been constant throughout. That has got a bit lost in the overarching narrative. We need to align the guidance currently on our website with the Court of Appeal’s language. I think we can do more to help people understand what it means to be effectively supervised or what an effective supervision regime needs to be, because it is clearly not clear for people. But what we cannot do as a regulator is prescribe in every single situation, “This is how it needs to be.” In my experience, where we have ended up as a regulator with a desire for prescription but needing to stay principles-based, case studies can really help. I have asked the team to come up with some case studies that people can point to, to understand, “This is what effective supervision might mean in this particular firm and this particular set-up,” to try to unpack the topic a little bit more.

I want to ask you, Anna, because you have the history, what conversations took place with the Law Society about the fact that your two organisations were issuing conflicting guidance. What happened? Were there conversations about the fact that you were saying, “Do this” in two different directions?

There have absolutely been conversations with the Law Society about the guidance issue more generally, not specifically in relation to Mazur.

I am talking about prior to that.

Yes, I mean prior to that. There have absolutely been conversations in the general sense about guidance. To be frank, this is one of those issues where it would be helpful to arrive at a comprehensive and consistent approach, because I think it is confusing for professionals to receive something called guidance, or sometimes practice notes, from two different bodies. We work quite hard, and I think on the whole quite well, with the Law Society to try to make sure that what they say and what we say is aligned.

It was not.

Clearly in this case, it was not, but there is a bigger conversation we would like to have with them about guidance.

Who takes precedence? Who is right?

This will have to be a five-second answer.

The five-second answer is: we are right. We are the regulator, and the standards that we will appeal to at the time at which we make decisions will be our principles and our guidance.

That is absolutely fine; I accept that. How do you make the Law Society behave?

That has to be a whole other session.

It probably is.

This is where the LSB can and does have a role. The LSB will bring us all together to make sure we are—

But it did not.

But we now have the Court of Appeal judgment, and Richard has already written to all of us, including the professional bodies, to come together and make sure we are aligned in what we say.

But that was clearly a four-year period of utter mayhem for everybody.

Order. I am sure we shall continue this discussion after the formal business. We will now close our proceedings this afternoon.