The shake-up, the biggest for the legal services industry in a decade, aims to make obtaining legal advice as easy as “buying a tin of beans”. A draft Legal Services Bill published by Lord Falconer of Thoroton will create steps for law firms to be run and owned by outside companies and even floated on the Stock Exchange.

It would create an independent Office for Legal Complaints and set up a regulatory board for all who provide legal services. There will be strict tests to ensure that people who own law firms are fit to do so. The reforms will enable solicitors or barristers to set up in partnership with each other and with other professionals, such as accountants, estate agents, bankers or surveyors.

Several companies, including the Co-op and the AA, have said that they will set up legal services when the Bill is passed.

Publishing the draft Bill, Lord Falconer said that house-buyers would be able to obtain all their professional services from one place. He added that the Bill provided a watershed for the way in which legal services were offered, ensuring “21st-century legal services for 21st-century consumers”.

The changes would take much of the stress out of events such as buying a house or dealing with the death of a relative because of the “huge chain” of professionals involved, he said. The Bill was trying to make legal services match the demands of the market, while ensuring that consumers were protected. “Properly regulated, providing proper protection for the consumer, why shouldn’t the consumer get all his or her services in one place?”

The draft Bill is based on a White Paper that was published last year. The final Bill is likely to be introduced by the autumn. Introducing the White Paper, Bridget Prentice, the Constitutional Affairs Minister, said: “I don’t see why consumers should not be able to get legal services as easily as they can buy a tin of beans.”

The draft Bill draws on recommendations by Sir David Clementi, the former Deputy Governor of the Bank of England. An umbrella Legal Services Board (LSB) would replace a “maze” of regulators, and ensure that unregulated bodies, such as claims management companies, are covered.

The new Office for Legal Complaints would cost £23 million with the total new regulatory system costing £67 million, compared with £63 million for the currrent system.

“The consumer wants one place to go (with a complaint) and he or she wants redress,” Lord Falconer said. “I am extremely concerned that complaints are handled properly.” The new office would be a separate, independent body, paid for by the legal profession.

The Law Society and the Bar Council, the professional bodies of solicitors and barristers in England and Wales, would remain regulators of their members, dealing with complaints of misconduct.

Kevin Martin, President of the Law Society, said that solicitors were broadly in favour of the changes, but added: “We are concerned it might be overbearing and might seek to interfere too much, and we are going to look at the legislation in great detail.”

Mr Martin said that opening up the market to allow other kinds of companies to offer legal advice was welcome, provided that they complied with the same high standards of consumer protection as law firms. “It should improve consumer choice, but . . . we are very concerned that the regulation of these entities is proportionate and that there is a level playing field,” he said.

Stephen Hockman, QC, the Chairman of the Bar Council, welcomed the Government’s “consultative approach” and the plan for the Bill to designate the council a “frontline regulator” of professional conduct. He added that the Legal Services Board should not able to “second-guess the legitimate decisions” of a regulator such as the Bar Council or “act in a way that is disproportionate”.

He said: “There is a clear danger that those who currently gain effective redress from a frontline regulator (Bar, Law Society) will see a poorer service” Nick Stace, of Which?, the consumer organisation, said: “We hope this signals a radical transformation of the complaints procedure and a change of culture in the legal profession. Consumers have complained to us time and again about the poor or even negligent service they’ve received from solicitors. They also tend to think that complaining is a total waste of time and money because they have no chance against the legal profession.”

Eddie Ryan, the managing director of Co-operative Legal Services, said that it was an “important step in improving legal services for consumers”.

THE REFORMS

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