A key chunk of the Law Society's regulatory powers – affecting solicitor investment managers – is to come under early government scrutiny with the launch of a review of the financial services industry.
Although the review was not mentioned in last week's Queen's Speech, The Lawyer understands Treasury minister Helen Liddell has already put one in motion.
The Law Society is one of a number of bodies authorised to regulate financial services under the regulatory regime set up by the 1986 Financial Services Act, and in its pre-election business manifesto the Labour Party pledged “to give the Securities and Investment Board direct responsibility for the regulatory regime covered by the 1986 Act”.
Chris Philipsborn, head of the Law Society's parliamentary unit, said the society was anticipating that a Green Paper would follow the review, and warned that there may even be time for legislation in this parliament.
“The fact that a bill on regulation was not in the Queen's Speech may have lulled some lawyers into a false sense of security,” he said.
Bob Butler, head of the Law Society's monitoring and investigation unit, said the society would oppose any move to strip it of its powers in this area.
“The Law Society regulates all aspects of solicitors' work; it would be a little stupid to create another body just for investment business,” he said.
The Association of Solicitor Investment Managers (Asim), which is made up of solicitors authorised by the Law Society to invest clients' money and has a membership of 50 firms, said it would join the Law Society in lobbying the Government against depriving the society of its regulatory powers.
“The regulation of solicitor investment managers has been a success – I am not aware of any financial scandals in this field concerning solicitors' practices,” said Asim director Richard Larner, of Ipswich firm Birketts.
A possible curtailment of the profession's freedom to regulate itself is just one of a whole series of measures planned by the new government, which includes a new Crime and Disorder Bill and a Competition Bill.
There was no mention in last week's Queen's speech, however, of the expected reforms which will come within the responsibility of the Lord Chancellor's Department – concerning legal aid, Lord Woolf's proposals and the promised establishment of an independent judicial appointments commission.
Before the election, however, Lord Irvine of Lairg, now the Lord Chancellor, promised a review of the civil justice system. It is expected to take about a year.
Richard Thomas, head of Clifford Chance's public policy unit, said the Queen's Speech had thrown up few surprises.
See story, page 3.