Regulators clash over pan-profession compensation fund
The Legal Services Board (LSB) consumer panel has hit back following the Law Society’s withering put-down of its proposal for a single, pan-profession compensation fund.
The consumer panel recommended the adoption of a “single financial protection regime” for all legal services providers, in its June report, Financial protection arrangements.
However, the proposal lacks sufficient “rigour” to be taken seriously, according to Des Hudson, chief executive of the Law Society.
In a highly critical statement this week, he said: “The panel fails to explain how a single scheme is achievable or how it would be administrated across multiple regulatory regimes.
“It also fails to provide sufficient evidence to substantiate its claim that it will be in consumers’ interests. It is quite surprising that the panel has not sought to explore these issues fully.”
In a letter to Chris Kenny, LSB chief executive, Hudson expressed disappointment at the panel’s “superficial analysis” of available information.
However, LSB consumer panel chair, Elisabeth Davies hit back: “Our report makes clear that a single financial protection regime should be fully scoped in order to assess the costs and benefits—we have not recommended that such a scheme should be set up immediately without first understanding the potential impacts.
“The sorts of issues that the Law Society raises are ones we would expect to see considered in such a scoping exercise, but it would not have been appropriate for the panel to set out a detailed blueprint at this stage.”
Davies added that the panel had published a paper and commissioned a series of focus groups on the risks consumers should bear.
