OFT Response to Clementi Review

16/12/2004

The legal professions need reform to improve competition and choice for their customers, says the OFT in response to the Clementi Review of the regulatory framework for legal services in England and Wales.

The Clementi Review proposes options for reform that would make regulation less restrictive and more effective and the OFT supports the Review’s proposals for reform to allow new ways of delivering legal services to the public.

Thus Legal Disciplinary Practices (LDPs) could bring together lawyers from different professional bodies, such as barristers, solicitors and conveyancers to provide legal services.

This would allow:

• Barristers and solicitors to enter partnership with lawyers, who are members of professional bodies other than their own;

• Solicitors employed by non-solicitors to provide services to the public; and

• Clients to obtain litigation and advocacy services from the same firm.

Beyond LDPs, Multi-Disciplinary Practices (MDPs) would allow legal services to be supplied alongside other services such as accountancy and surveying, which could have further benefits for clients needing combinations of professional services (for example house-buyers and small businesses.)

Such practices could be owned by the professionals involved or by third parties, such as banks, motoring organisations or supermarkets.

Regulation should not obstruct new business structures that can enhance competition, efficiency, quality and choice both for professionals and the public. At the same time regulation must be effective and not vulnerable to anti-competitive distortion.

To this end the Clementi Review proposes possible alternative regulatory models. The OFT believes that whatever model is chosen it must include a mechanism for ensuring that regulatory rules are subject to thorough scrutiny to ensure that they are not anti-competitive.

It is also important that entry requirements for legal professions do not unnecessarily restrict the development new business structures.

The OFT believes, for example, that the current requirements for qualification as an employed barrister are too restrictive and need to be modified.

Full text of the OFT’s response

‘Competition in Professions’

‘Competition in Professions’