New Zealand Law Society accept proposed Independent Regulator

The New Zealand Law Society, in its response to the Independent Review on Regulating Lawyers in Aotearoa New Zealand (the Paterson Review [PDF]),  has accepted in principle the proposal to establish a new independent regulator.

The Review said that the New Zealand Law Society’s current structure (operating as both a regulator and membership body) was an outlier. This was in comparison with overseas legal regulatory systems and among professional regulators in different fields in New Zealand.

Regulatory functions can be a deterrent to lawyers accessing representative services

The New Zealand Law Society accept that its regulatory functions can be a deterrent to lawyers accessing its representative services. Chief Executive, Katie Rusbatch, said:

There can be particular difficulties in responding to health and wellbeing concerns raised by practitioners. As New Zealand’s population ages, an increasing cohort of lawyers are facing health issues which have varying degrees of impact on their law practices. Many of these practitioners require support.

The Review acknowledged that the representative body for the profession is also the regulator, which potentially deters lawyers from talking with the New Zealand Law Society about their concerns and seeking assistance and support. Separation of the representative function from the regulatory function will likely enable the representative body to have a stronger voice in support of lawyers.

Compelling Logic for ending the Conflict of Interest

New Zealand Law Society President, Frazer Barton, said:

In terms of structure, the Law Society is currently a regulator, as well as a membership body. Many believe this dual role doesn’t serve the interests of the public or the profession well, with the functions sometimes in conflict with each other. The Independent Review Report stated that there is a strong case for a new independent regulator – and I think there is a compelling logic to that.

Timeframe

Currently, there is no timeframe for any proposed split, as legislative change would be required. The New Zealand Law Society is now looking to government to indicate whether reform will be a legislative priority.

New Zealand Law Society v Law Society of Scotland

The Paterson Review in New Zealand mirrored the Roberton Review in Scotland in recommending an independent regulator for legal services.

However, the position of the New Zealand Law Society in relation to the Paterson Review is in stark contrast to the position of the Law Society of Scotland in relation to the Roberton Review.

The Law Society of Scotland does not want an independent regulator in Scotland. They see no conflict of interest:

Far from there being a conflict of interest in a single professional body approach, there is a coincidence of interest. This is why the professional body model is used by so many other professions at home and the world over.

Professor Stephen Mayson, who carried out the Independent Review of Legal Services Regulation in England & Wales, is critical of this argument:

It is, to my mind, telling that the Law Society of Scotland – contrary to the view of the CMA and current regulatory theory and best practice – denies the intrinsic conflict in embodying both regulatory and representative roles. Indeed, in its response to the Committee, it goes much further and asserts that there is “a coincidence of interest”. At the same time, it professes the ‘clear separation’ and ‘independence’ of its Regulatory Committee, while still welcoming the Bill’s proposals for even greater independence, transparency and accountability. And yet, throughout its submission to the Committee, it refers to ‘we’ and ‘us’ in relation to its position on the proposals in the Bill without ever separating the focus of its response into its respectively separate and independent positions as regulator and representative body.

This clear conflation of positions does indeed reinforce the ‘coincidence of interest’, but in a way that strongly suggests that, in submitting the Law Society’s response as a representative body and drawing no clear distinction between its regulatory and representative positions, the regulation of solicitors in Scotland is very much captured by and directed towards membership interests.

The Law Society of Scotland refer to their model being used by so many other professions the world over. However, this is a reference to something that is clearly historical. One that is now, in today’s modern world, completely out of touch. The much more enlightened New Zealand Law Society recognises this. They accept the position of being an outlier on the international stage:

The Panel calls the New Zealand regulatory model for lawyers an outlier, both by comparison with other legal regulatory regimes internationally and among professional regulators in New Zealand. However, as the Panel also acknowledges, there remains a mix of models internationally for regulation of legal services. In England and Wales, Ireland, Victoria, and Western Australia, the legal regulator is entirely separate from the profession’s membership body. Some of these jurisdictions have compulsory membership of representative bodies and they receive regulatory funding to deliver some services. In other jurisdictions, such as Queensland, New South Wales, South Australia and Tasmania, the regulatory and representative functions are joined but the complaints body is independent.

The Law Society of Scotland’s desire to remain an outlier is absent of any logic and is very disappointing. As I concluded in my response to the call for evidence on the Regulation of Legal Services (Scotland) Bill:

It will be a sad indictment for Scotland if we ignore the Roberton Review but in New Zealand they accept the Paterson Review.