Written statement: Conclusion of the Independent Public Bodies Review of the Legal Services Board - July 13

Justice Minister (Sarah Sackman): I am announcing today the conclusion of the review of the Legal Services Board (LSB) as a public body, led by independent lead reviewer Richard Lloyd.

Independent Public Bodies Review of Legal Services Board(opens in a new tab)

It is important that departments regularly review their public bodies to provide assurance to both Government and the public that these bodies are operating effectively, that their functions remain useful and necessary, and that there is clear accountability without unnecessary duplication. In the context of legal services regulation, effective and proportionate oversight plays an important role in supporting high professional standards across the legal sector and maintaining public confidence in the legal system. This review considered the LSB's statutory remit, strategic clarity, governance and accountability arrangements, and organisational capability. The review's focus was on the operation of the LSB as a public body within the existing statutory framework established by the Legal Services Act 2007, rather than on wider legislative reform. That is a subject for another day.

The conclusions of the report are stark. The LSB has, in some respects, lost its way and must take steps to refocus on consumer protection and strategic oversight. Richard Lloyd's report recognises that there have been a series of regulatory failures across the system which have resulted in significant consumer detriment and are not acceptable. It concludes that decisive action is needed to address these shortcomings and identifies an opportunity to strengthen and support the legal services sector through a more collaborative and effective approach to regulation, supporting both public confidence and the sector's long-term success. The report identifies this as a critical moment for a reset, driving improvement and renewed focus across the system. It sets out an action-focused programme of recommendations aimed at strengthening oversight of the sector, improving clarity of priorities and accountability, and supporting a more effective, proportionate, outcomes-focused and risk-based approach to oversight and assurance, while maintaining the LSB's operational independence.

We recognise in the report's recommendations, which I have discussed with Richard Lloyd, a proactive role for the MoJ as the sponsoring department to provide clear and robust oversight of the legal services framework whilst respecting the LSB's independence. There are already indications of progress at the LSB under its newly appointed leadership, including organisational changes that are aligned with the direction of the review's recommendations. Going forward we will work with the LSB leadership to ensure their role is effective and that the LSA regime is delivering for consumers of legal services across the country.

The report highlights that consumer protection should remain at the centre of legal services regulation. That includes a greater emphasis on access to justice, effective redress, underserved consumers and emerging risks associated with technology and AI. It sets out recommendations on how the regulatory framework can evolve in a way that maintains public confidence, supports a strong and resilient legal sector, and ensures that lessons are learned and embedded across the system.

I am grateful to Richard for undertaking this review and for his careful consideration of these important issues. It is clear that prompt action is needed, and I will work with my officials and the LSB to consider the report's findings. I will set out the Government's response in due course.