Legal Services Act 2007 - Essay Example

Legal Services Act 2007 Introduction: The Legal Services Act 2007 has been formed to regulate the legal delivery aiding profession through strong and effective measures as listed below: To preserve public interest in matters affecting law and legal practices To uphold the basis of the rule of law in all situations To ensure the expedition of swift judicial process and verdict delivery To render protective and safe the interests of consumers and users of legal services To maintain competitiveness in the profession with ethical practices To ensure an independent, robust , extensive and efficient legal system To impart public knowledge to citizens in matters of enforcing legal rights and responsibilities The professional principles that underpin this Act needs to be enforced in terms of the following: 1. The chosen person should act with independence and sincerity 2. The selected person should pursue and sustain the highest standards of work culture 3. The nominated person should perform in the best interests of clients 4. The chosen person should comply with his duty to court to protect freedom of interests of justice and fair play in the carriage of legal functions. 5. The preferred person needs to provide the highest degree of privacy and confidentiality in matters of client and such information should be used for protection of client and to serve his best interests and to maintain highest professional integrity and moral standards in this respect. According to this law, only authorized persons could carry out reserved legal activities as stipulated below: Imposition of "right of audience." 2. The carrying out of limitative processes 3. Reserve instruments that have to do with land regulations and real property measures 4. Probate activities and examination of the legal validity of wills and estate matters 5. Notary and certification matters 6. Admittance of "oaths." (Explanatory Notes to Legal Services, 2008). The aspect of authorised person is very important since only they are empowered to carry out authorised legal activities or functions. It is however a defence that the person was ignorant or unknowing about this matter, or did not know, and could not reasonably have been expected to know. In case of unauthorised carrying out of approved legal activities, the Incumbent shall be liable for monetary penalties as deemed necessary. The Act permits the carrying out of alternative business structure (ABS) by non-lawyers in the fields of professional, management and ownership roles. The new Act allows approved regulators who can authorise licensed bodies to offer specialised professional services. "The provisions of this Part have effect for the purpose of regulating the carrying on of reserved legal activities and other activities by licensed bodies." (Alternative business structures: Introductory, 2007, p.42). The Act widens the scope of enforcement of legal professional rights to authorised persons other than barristers and solicitors, however, no date is fixed for the coming into force of these provisions. This in effects means that even people who are holding non -legal professions, other than legal, could extend their services to include, within its jurisdiction, legal work also. This could be seen as the primary area of deficiency that causes concern for professionals and practioners alike, since non legal professionals may not be able to impart the highest standards of professional ethics as could legal professionals. Alternative Business Structures (ABS): The aspect of providing for Alternative Business Structures (ABS) facilitates licensing of innovative business structures in legal services. These will permit lawyers and non-lawyers to work together to carry out legal and other services. This Part of the Act sets out the arrangements for authorisation, by the Board, of licensing powers that be allowed framing rules and regulations, and, in the lack of an appropriate licensing authority, the Board can license ABS firms straightaway. It also makes conditions for the regulation of conduct of the Alternative Business Structure. "New business structures are expected to give legal providers greater flexibility to respond to market demands, within the UK and overseas. Licences will be conferred by licensing authorities, with various safeguards in place." (Explanatory notes to legal services: Alternative Business Structures). It was during Year 2001 that the Office of Fair Trading (OFT) recommended that the rules governing legal professions need to be revamped and overhauled especially in the areas of enforcing more competitive laws into it, and abandon its archaic and outdated legal systems. It was felt that legal systems in UK need to be thrown open to competition and new entrants need to be allowed to function as legal professions in this country. Further, it is seen that a Committee needs to be appointed by Government that could assess and conduct reviews of laws that impinge legal services in the country. Accordingly in 2003, the Committee submitted its report, which noted its concerns about current framework of legal professional services, aspects of handling complaints, and the need for seeking reforms in the areas of legal authority. The Committee's review has been exacerbated by the need for sectoral reforms in law practices, seen in the context of enfeebled and archaic laws that do not serve current issues adequately, nor mete out justice in its right sense. Background and rationale of LSA 2007: The Legal Service Act 2007 arouse due to the perceived shortcomings in the administration of legal jurisprudence in the United Kingdoms and ineffectiveness and inefficiency, and proper enforcement of laws in the legal system of this country. "It is true that in England and Wales we spend more per capita on legal aid than almost anywhere else in the world. Legal aid expenditure has gone from 1.5 billion in 1997 to nearly 2 billion today-extraordinary figures." (Publications and records: Legal aid reform, 2007). So it is seen that increased cost of legal services aid is a major issue in UK legal milieu, especially with regard to the fact that often legal costs far exceeds the benefits derived from them. Again it is also possible that clients may be put into the mercy of unscrupulous lawyers who would extract a lot for their services, whether they provide the desired results or not. In a bid to end the inconsistencies and ineffective implementation of laws, especially at the lower strata of legal aid, the Government has decided, in principle, to give effect to Legal Service Act 2007. While its intentions are indeed noble and heart-warming, it would assume implementation hopefully by Year 2010. The modus operandi of its operational deployment and other aspects need to be worked out in order that the smooth transition of this Act takes place by the end of this decade. It would be best if the LSA 2007 is first tested in a sample area, and its results observed, whether positive or negative, instead of being tested and proved a failure, in which a lot of money, efforts and time would go futile and squandered. Professed advantages of LSA 2007: The main perceived advantages of LSA 2007 could be seen in terms of the following: 1. It would discipline, lend a sense of purpose, directional thrust and rejuvenate the age old legal aid system in the United Kingdoms. 2. It would offer scope for legal and non-legal community members to work together in certain disciplines. Hitherto, only qualified and certified legal professionals could take up legal areas, but in the futuristic changed scenario, non legal persons could also work in certain delineated sectors. The Legal Services Act 2007 has come as a result of the DCA White paper entitled "The Future of legal services -Putting consumers first." This paper has raised serious concerns that the market is becomingly increasingly split up into smaller pieces. "In fact, the Government's view is that it is not one market but 'a range of increasingly fragmented and fast-moving market places, in which a wide spectrum of consumers is being supplied by an expanding range of different services, supplied by providers who may have nothing in common other than the fact that their services have some legal element' " (The legal services sector, 2005, p.12). Threats and challenges: There have been many complaints against members of the legal profession, including fraudulent conduct, but this is not the main concern. The significant need for reforms has emanated from the perceived lack of competitiveness among lawyers and the shortage of choices that consumers are able to exercise. . It is necessary that business skills need to be honed to provide cost-effective solutions to consumer issues. The several aspects that are being considered in the White paper have been: 1. It is the non-legal lawyers who are behind changes in the legal services 2. The major change agents would be the consumers and the competitive elements 3. It is now seen that the Act establishes the functionalities and processes of the Act that provides non-legal professionals in a commanding position. 4. By far the most important change that it envisages is fundamentally self-regulatory framework would give way to one that is controlled by outside control influences. The most important impact that LSA 2007 sought to implement is to clear the route for non- lawyers to work along with qualified lawyers in matters of client servicing. This would ensure that cases are taken up and contested expeditiously. The new business structure is mainly to be concerned upon how to address matters arising from perceived expansion of scope and depth of legal aid process. Again, it is seen that the fundamental aspect is the neo-professionalism and urgency in legal aid matters. However, it is not without attending risks and challenges. For one thing, it needs to be seen that the position of black and marginalized sections of the legal profession would be affected adversely, since they would need to begin their own practices, due to the scarcity of jobs that such rules may being about. This is because, many black lawyers had struggled to pass their professional courses and finally, they may find it even difficult to get jobs in non-black establishments. Given that entry to the number of institutions is limited due to new rules, the blacks would have no other recourse but to set up their own small firms. However, their contribution to the mainstream of legal business would be jeopardised, and they would need to set up private legal practice to survive. Main areas of usage: The main aspects of LSA 2007 are with regard to the following: The institution of an independent Office of Legal Complaints, (OLC) to the profession. In real terms this is expected to serve as a trouble shooter who would oversee a single window entry for legal consumers in England and Wales. The creation of the Legal Services Board to oversee approved regulators such as the Law Society, Bar Council and Council for Licensed Conveyances comprised mainly of representatives of consumers of legal services "The opportunity for new business structures within which legal services can be delivered by legal disciplinary practices (LDPs) and by alternative business structures (ABSs), the latter providing for non-lawyers to play a major role in the deliverance of legal services." (Leington, p.6). There are still many grey areas that need to be sorted out in terms of who would be within the ambit of authority to start up new business ventures and who would be outside this ambit. It is seem that many firms would now have to increase their proportion of non law management staff, and the package delivery would receive better visibility in the market place. It could be seen that advantages not withstanding, the major challenge would be in terms of the death of small law firms, whose business may pass on to new law firms with better and more professionally competent personnel. Thus the true worth of law firms would move away from specialized areas, but what economical and efficient package services would be available to now discerning and choosy consumers. The Compensation Act, 2006 has also introduced regulation for non-legally qualified people who provide advice and support, other than on a voluntary/no fee basis. (Leington, p.6). There are both perceived advantages and disadvantages in legal aid business reforms 2007. It is perceived that it could raise the bar for legal standards and client servicing, it could also be seen in terms of providing a one store shopping for dispute resolution, with a full range of client servicing tools. Since the current fad is to provide multiple legal solutions under one roof , the law firms now have to provide a gamut of services to discerning and erudite customers who are aware of the competitive stress in which law firms currently operate. Thus the password would be in terms of providing flexible legal solutions by law firms, taking into account the larger business interests. Firms that are more resourceful, efficient, alert and customer centric, willing to provide added services and who do not fear to tread into unknown legal terrains would be successful and would rule the roost. Other firms that cannot shrug off their conventional and staid values would be swiftly outclassed by competitors and may have to fold up the business. Thus it is sent that the main strengths of the new act could be in terms of widening the vistas of law and introducing an element of healthy competitiveness among law firms, such that they are able to provide better service to consumers. This could also reduce the high costs that are now attributed to litigation and usher in a standardized procedure in legal matters. It could also be seen in terms of providing better choice for consumers of legal services. This would have a lowering effect on the high rates being charged by lawyers from consumers and also reduce the many ways in which the poor and underprivileged clients of legal providers could possibly be exploited by unscrupulous lawyers. There would be greater choice being exercised by the public and they would be able to use their discretion and judgment in seeking law firms to represent their cases. Vulnerabilities of the LSA 2007: This could be seen in terms of the fact that non white and other minorities may been disadvantaged in that they would have to set up their own new law firms to cater to competitive elements since the supply would be greater than demand for the legal profession. This however, may not be applicable for probate issues for which professional lawyers are a must. Again small law firms may not be able to face the onslaught provided by the big firms which would grow exponentially. It could also be that small firms may not be able to provide a plethora of legal services, or package services, as a result of which they may be marginalized in the legal community. The costs of legal aid business could definitely go up, since now specialisation and catering to individual requirements would become necessary and expedient. New firms would be added to the lists and competitiveness would become more intense. The demands on the legal service aid would go up and small and marginal law firms would be adversely affected. Again, it is seen that the new laws favours the non legal professionals in that their services could be utilised in certain legal areas. Whether this would be at the cost of other competent and experienced law professionals is a major area of deficiencies, if mandatory reservations are placed for non legal professionals to be compulsorily inducted into management areas, this could affect the employment opportunities and career growth of others, which may ultimately lead to lesser qualified and experienced persons in the legal field. This would, paradoxically, decrease the standards of the profession and defeat the very implementation of the statute. It is seen that the main areas in which non legal professionals could render services to the consumers would be in the areas of: 1. Management - for offering technical advices on the setting up of companies, the legal formalities that are necessary for floating of companies, especially public limited ones, and the implications of binding laws on floatation of public funding of shares, etc. Even after floatation of companies is completed, it is necessary to comply with statutory requirements in order to proper accountability and regulatory services are provided for deployment and management of public funds. 2. Professional services : Aspects regarding professional services in the areas of investments, especially in stock markets, bonds and depository services, brokerage companies, or in bonds, mutual funds and other government and non government investments schemes. Professional services could also extend to offering specialized legal services in property investment matters, purchase, sale, leasing and dealing with private and public properties sin the UK and abroad. Legal personnel are in a position to offer advice and consultancy services in offshore investments and the risks and benefits involved in such kind of fund deployments, especially in global l investment markets. 3. According to the proposed Legal Services Act 2007, it is possible for the services of lawyers to join hands in the property portfolio management of clients, in guiding them to choose from wide range of services of property services. Conclusion: It could be seen that the main purpose of LSA has been to make legal access more convenient and economical for the professions as well as the consumers. The best way to ameliorate the risks and challenges that are posed by the new laws, in terms of both implementation and deployment would be in terms of using the new law on a test and selective basis in one particular preferred segment, and observe the results emanating from it. This would give sufficient and ample evidence how this new law could perform in a wider region. It could also be seen the Board should be empowered to monitor and oversee the functioning of the various sub departments and organisations on a regular and persistent manner, and enforce discipline and enforcement in law; if necessary the Board must also be empowered to make new guidelines meant to streamline the induction of the Act and also work with the member firms and the Government in ensuring the long term success and viability of this Law. Bibliography Alternative business structures: Introductory, Legal Services Act 2007, United Kingdom, 2007, retrieved 11 December 2008, . Explanatory notes to legal services: Alternative Business Structures, Crown, 2008, retrieved 11 December 2008, . Explanatory notes to legal services, Crown, 2008, retrieved 11 December 2008, . Leington, Patricia, The alt annual conference: The key provisions of the act, retrieved 11 December 2008, http://www.lawteacher.ac.uk/AnnualConf/Consilio-LegalServicesAct.pdf Publications and records: Legal aid reform, www.parliament.uk, 2008, retrieved 11 December 2008, http://www.publications.parliament.uk/pa/cm200607/cmhansrd/cm070509/halltext/70509h0009.htm The legal services sector, dca: Department for Constitutional Affairs, 2005, retrieved 11 December 2008, http://www.claimsregulation.gov.uk/pdfs/whitepaper.pdf Read More