ABS era dawns as Society appointed approved regulator

The Scottish Government has formally authorised the Law Society of Scotland as a regulator of licensed legal services providers in Scotland, under the Legal Services (Scotland) Act 2010.

The move will finally enable solicitors and non-solicitors to be permitted to set up businesses together to provide legal and other business services in Scotland.

In terms of the Act these new types of businesses would be required to be majority owned (at least 51%) by "regulated professionals". They could mean Scottish solicitors setting up in partnership with other specialists such as surveyors, accountants or architects, promoting existing senior, non-solicitor staff to partner level, or seeking external capital.

Who qualifies as a "regulated professional" is set out in regulations made in 2012. All licensed providers would require at least one solicitor to be employed in the business, with a solicitor acting as head of legal services. 

The Society is currently building the policies and processes that will support the approved regulatory scheme, which is due to launch in 2022.

At the same time the Scottish Legal Complaints Commission becomes responsible for handling complaints about the way the Society carries out its functions as an approved regulator. It will also be the body that handles complaints about legal services provided by the new forms of practice.

Ken Dalling, President of the Law Society of Scotland, commented: "Today’s announcement marks a significant step towards opening up the legal services market in Scotland to permit these new types of businesses.

"It has taken significant effort to get to this stage and we are working on the policies and processes needed to support the new regulatory framework. It will ensure licensed providers operate to high professional standards and that there are robust consumer protections in place, as there are for clients of solicitor firms."

The function of investigating and determining these complaints has been delegated to the SLCC by Scottish Ministers. The SLCC will notify its decision on whether or not to uphold the complaint to the complainer and Approved Regulator. It will also share that decision with Scottish Ministers, who, where a complaint is upheld, will decide on any sanctions to be applied.

Neil Stevenson, chief executive of the Scottish Legal Complaints Commission, said: "We are proud that Scottish ministers have once again put their faith in the SLCC to deliver effective complaints systems, and to take on new duties to oversee the work of legal services regulators. When issues are raised through new 'approved regulator' complaints the SLCC will now have a role in looking at competition in the sector, access to justice, and diversity, as well as determining if approved regulators are acting in the public interest and the interests of justice.

"While broader reform, currently being consulted upon, may look at embedding these functions further within a new regulatory system, in this case the Law Society is voluntarily bringing itself within the SLCC's and ministers' remit through its elective choice to become an approved regulator."

He added that the SLCC would "work hard to implement our new extended remit in a proportionate and effective manner".