Time to rethink reserved activities?

A report from Stephen Mayson and Olivia Marley of the College of Law’s Policy Services Institute has examined the historical origins of reserved activities, the bedrock or ‘inner core’ of legal services reserved to lawyers.  Their paper suggests a number of reasons why it is time to consider from first principles why we the need for reserved activities.  In particular:

  1. There has been little, if any, consideration by Parliament of the justifications for each reserved activity suggesting that there is no clear public interest rationale for the reserved activities.
  2. Some of the monopolies have clearly arisen as a result of what we academics like to refer to as ‘historical contingencies’ but what might more pithily be described as right stitch ups.  Mayson and Marley are at their most entertaining pointing out how barristers got their advocacy monopoly by claiming to be more gentlemanly than attorneys and the conveyancing monopoly was granted to sweet a taxation pill being thrust down lawyers’ throats by the then Prime Minister.
  3. There is an uncertain boundary between regulated activity (immigration and insolvency work and ‘claims management’ are all regulated activities but are not reserved activity under the Legal Services Act).

The paper also suggested, to me at least, that public knowledge about reserved activities must close to non-existent.  The complexity of the reserved activities precludes this– hands up anyone who can define “reserved instrument activities”, for instance.  (And please go and stand at the back of the too cool for school queue).  As does the number of professionals who can claim rights in certain circumstances – barristers, solicitors, patent attorneys, trade mark agents, licensed conveyancers, legal executives, law costs draftsmen, public notaries and some accountants.

On one level, the need to think through the justifications for these monopolies has to be right.  At a time when the Legal Services Board is beginning to decide some issues relevant to reservation (such as the need to regulate will-writers), conceptualising which services are ‘core’ and need to be ‘reserved’ is intuitively a useful exercise.  It may also lead to some interesting, and not entirely predictable places.  Take rights of audience for example.  The seriousness of the activity; its place at the pinnacle of legal practice, culturally and quite possibly professionally; the risk that bad advocates do serious harm to a client, all suggest a need for regulation, but do they suggest a need for reservation?  Are alternative approaches to regulation better?  One might even argue that of all the reserved activities advocacy is the one where reservation is least justified: because the judges supervise practice in their court rooms the need for protection in the public interest is weakened considerably.  That, plus the adversarial nature of proceedings, where parties – to an extent at least – police each other, might provide protection enough.

The arguments surrounding reservation also depend on other contextual issues.  Could one argue, against current trend in thinking on legal services, that one could deregulate advocacy but require the separation of litigation and advocacy or (in a more mixed version: that advocacy need only be regulated or reserved where the litigation and advocacy function was not separated by a disinterested referral relationship).    Contextual issues include the knowledge and capacity for choice of the clients (which include the difference between lay and expert clients).  Such capacity may be changed by more sophisticated lawyer comparator sites and expert intermediation.

Yet for all the benefit in considering the fundamental questions behind reserved activity, there is one very large problem with the endeavour.  There is, I suspect, a significant lack of data on which to base judgments about the issues posed by any fundamental rethinking of reservation.  We know very little about the impact of monopoly on quality and price in professional services.  Positions in the debates around these issues are largely likely to be driven by ideology and self-interest.   We know some things which are relevant: there is evidence, for instance, to suggest that specialisation is more important than professional qualification in non-reserved activities, and I would suggest that this is a finding which is likely to hold true in reserved work too, but a lot will depend on the economic incentives and structures affecting how such activites are provided.  If the Legal Services Act is to lead to profound change in the nature of legal service organisations then such structures and incentives are likely to change, and change quickly.  A good time, then to start thinking about such activities, but perhaps a little premature to be taking decisions on them.

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