Regulatory Guides: An Overview

The Legal Services Commission publishes regulatory guides or practice notes to set out the factors we take into account in exercising our regulatory responsibilities in grey areas where it is uncertain how a lawyer’s professional obligations apply, most relevantly our responsibilities:

  • to mediate consumer disputes including costs disputes between lawyers and their clients; and
  • to decide after investigating a lawyer’s conduct if it is inconsistent with his or her professional obligations and whether to commence disciplinary proceedings.

This is no more than lawyers and users of legal services are entitled to expect of a transparent and accountable regulator. We hope and intend that the guides will help lawyers to avoid complaints, help promote adherence to high professional standards and help prevent non-compliance, especially inadvertent non-compliance by that vast majority of lawyers who want to do the right thing.

We write the guides in plain English, with as little technicality as possible, so that they can be readily understood by lawyers and users of legal services alike.

Note

Publishing regulatory guides of this kind is a new idea in the legal services context but our counterpart regulators in other industry sectors have been doing it for years. The Australian Securities and Investment Commission, the Financial Ombudsman Service and the Telecommunications Industry Ombudsman, for example, all publish guidance in the form of Regulatory Guides (ASIC), Practice Notes and Guidelines (FOS) or Position Statements (TIO).

We have two fundamental and overlapping purposes at the Legal Services Commission:

  • to provide users of legal services an independent, timely, fair and reasonable means of redress for complaints; and
  • to promote, monitor and enforce high standards of conduct in the provision of legal services, including when it is justified by the evidence after investigation and the public interest by commencing disciplinary proceedings.

We believe we have a role as a regulator of leadership and guidance, not just of policing and punishing (see Note 1 below). We are not shy about commencing disciplinary proceedings but we believe we best achieve our purposes by taking a preventative and ethical capacity building approach whenever we reasonably can in preference to a punitive or ‘gotcha’ approach. We undertake our regulatory responsibilities accordingly. The guides reflect these beliefs.

Furthermore the regulation of the provision of legal services consistent with trends in regulation more generally is becoming increasingly ‘firm about outcomes, flexible about means’. It is putting increasing emphasis on broadly stated, high level principles which spell out the policy outcomes legislators and regulators are seeking to achieve and less on detailed prescriptive rules which describe exactly how lawyers should conduct themselves.

There is nothing entirely new about this. Many of a lawyer’s most fundamental professional obligations have always been expressed as broadly stated principles, whether in legislation, the common law or the conduct rules that are promulgated by lawyers’ professional bodies.(see Note 2 below)

Principles-based (or outcomes-based) regulation has distinct advantages, not least that it gives lawyers more flexibility than they have had in the past to decide how best to achieve any given broadly stated outcome in the many and varied circumstances of their own particular law practices.

But it has a downside also, not least that it is not always obvious how a broadly stated principle applies in any given factual circumstance. Thus the greater flexibility comes at the price of greater uncertainty, not least from a lawyer’s point of view uncertainty whether we as regulators understand and apply a broadly stated principle in the same way they do.

The guides will set out for the benefit of lawyers and users of legal services alike the factors we will take into account in exercising our responsibilities in such circumstances. This is no more than they are entitled to expect of a transparent and accountable regulator.

Note
  1. We agree with Lord Hunt’s comments to this effect in his recent and comprehensive review of the regulation of legal services in England and Wales, The Hunt Review of the Regulation of Legal Services, October 2009, at pp.77-78.
  2. The High Court observed many years ago now, in Clyne v NSW Bar Association (1960) CLR 186 at 200, that ‘the rules which govern the conduct of members of a body of professional men [sic]… may… be divided roughly into two classes.  In the one class stand those rules which are mainly conventional in character [and which] are designed primarily to regulate the conduct of members of the profession in their relations with one another.  Many of these rules are reduced to writing, and they are from time to time interpreted, and perhaps modified… by resolutions of the governing body of the profession…  Rules of the other class are not merely conventional in character. They are fundamental. They are for the most part not to be found in writing. It is not necessary that they be reduced to writing, because they rest essentially on nothing more and nothing less than a generally accepted standard of common decency and common fairness.’ The Queensland Court of Appeal commented to similar effect in Council of Queensland Law Society v Roche [2003] QCA 469, including at paragraph 32, for example, that the ‘major criteria which ultimately inform the professionalism of the law are integrity, and as concomitants, honesty and reasonableness.’ This is as it should be. Ken Crispin QC quotes Sir Gerard Brennan as saying, wisely, that ‘if ethics were reduced to rules, a spiritless compliance would soon be replaced by skilful evasion’ (in Stephen Parker and Charles Sampford, Legal Ethics and Legal Practice, Oxford, 1995, at p.176).

We will develop the guides in consultation with the professional bodies and in close and direct consultation with the lawyers whose conduct we seek to influence. Similarly, and having regard to the resources we have available to us from time to time, we will consult with users of legal services also.

We want in particular to consult the users of legal services who are least able to give voice to their legitimate interests themselves: the typically one-off users of legal services who go to lawyers to help them buy or sell their family home or about family law, deceased estate and personal injury matters at often critical moments in their lives. We want to learn from what they tell us and develop an informed capacity to analyse issues from their point of view (see Note 1 Below).

We will use traditional consultation techniques such as seeking comments on consultation drafts and discussion papers. We will also use survey techniques to help us identify issues and test out ideas. We will use both quantitative and qualitative methods including on-line surveys and facilitated focus groups (see Note 2 below). We will be methodologically sound, and engage experts as appropriate to help us design our survey methods and interpret and analyse the results.

Note
  1. It will not be easy to consult meaningfully with users of legal services given the absence in the legal services sector of any counterparts to the consumer advocacy organisations such as Consumer Credit Legal Services or the Australian Communications Consumer Action Network which exist in other industry sectors. It can be done, however - see Note 2 below.
  2. The Legal Services Consumer Panel for England and Wales has commissioned research including facilitated focus groups of legal consumers.

We hope and intend that the guides will be persuasive but they are not, nor can they ever be binding. The Commission is responsible for promoting, monitoring and enforcing standards of conduct in the provision of legal services, not for setting them. The standards are set in laws enacted by parliaments, in the judgments of the disciplinary bodies and the courts and in the ‘conduct rules’ developed by the professional bodies (see Note below).

The guides are neither ‘rules’ nor a misguided attempt to ‘codify’ the rules which establish a lawyer’s professional obligations. They simply articulate the factors we take into account in exercising our responsibilities in circumstances where it is unclear how an obligation applies.

We recognise that the guides by their very nature deal with uncertainties, and matters that are yet to be judicially determined, and hence the likelihood that reasonable minds might differ. This hardly relieves us however of our responsibility to decide what action to take, if any, on complaints which involve matters of these kinds and our responsibility in particular to decide if there is a reasonable likelihood a disciplinary body will find the conduct subject to complaint to be unsatisfactory professional conduct or worse and whether it is in the public interest to initiate disciplinary proceedings.

So we have to form a view, and lawyers and users of legal services alike are entitled to know what it is. We will do our very best to get it right but it is always possible that the disciplinary bodies and the courts will tell us we have got it wrong. So be it: we will revise and update those guides accordingly.

Note

The ‘conduct rules’ (the Solicitors and the Barristers Rules) are made by the Queensland Law Society and the Bar Association of Queensland respectively and come into effect when they are ‘signed off’ by the Attorney-General - the Legal Profession Act 2007, Part 3.2 Divisions 2-5.