News & Views

What the Legal Services Consumer Panel's Call for a Single Regulator means for Firms and Practitioners

The Legal Services Consumer Panel has renewed its call for a single regulator to supersede the eight approved regulators that currently govern legal services in England and Wales.

In its July 2026 position paper, the Legal Services Consumer Panel (Panel) reiterated its call, after a similar call in 2017, for a single regulator to govern legal services in England and Wales. Current eight regulators are: the Solicitors Regulation Authority, the Bar Standards Board, the Council for Licensed Conveyancers, the Chartered Institute of Legal Executives, the Intellectual Property Regulation Board, the Institute of Chartered Accountants in England and Wales, the Faculty Office (Master of the Faculties, regulating Notaries), and the Costs Lawyer Standards Board.

For those of us who advise law firms and legal professionals on regulatory compliance and corporate strategy, this may not remain an abstract policy debate anymore. If the Government acts on even part of the Panel's agenda, the structural assumptions underpinning law firm governance, compensation arrangements, and complaints handling and regulatory compliance responsibilities will change fundamentally.

The Panel's Diagnosis

The Panel has concluded that the framework of eight approved regulators overseen by the Legal Services Board (LSB) is structurally incapable of protecting consumers, governing modern risks or improving access to justice. Its answer is not reform of the existing architecture but replacement of the system with a single, independent, risk-based regulator for all legal services in England and Wales.

The Panel discusses several failures to make its case:

• The Regulatory Information Service (RIS): The Competition and Markets Authority (CMA) recommended RIS in 2016 with the purpose of empowering consumers to make informed decisions. In the 10 years since CMA first called for RIS, only two tools that constitute the RIS’s delivery to date, ‘check a legal adviser’ and ‘choose a legal adviser’ are now live on the Legal Choices website. ‘A decade to reach beta is not a success story. It is a structural indictment. And the beta itself covers only regulated providers, draws on eight separate data systems, and sits on a platform most consumers have arguably never heard of’.

• Axiom Ince (2023): over £60 million missing from client account. The SRA's initial partial intervention allowed a further £36 million to be lost before full intervention, prompting the LSB's first-ever use of its Section 32 enforcement powers and a 270% rise in the SRA Compensation Fund levy.

• SSB Law (2024): collapse with debts exceeding £200 million, after more than 100 complaints were miscategorised across the artificial 'service/conduct' divide between the Legal Ombudsman and the SRA. The LSB formally censured the SRA in March 2026 and ordered it to publish mandatory performance targets.

• Mazur (2025–2026): two rounds of litigation - High Court and Court of Appeal - were needed to establish that unauthorised staff may perform litigation tasks under the supervision and responsibility of an authorised lawyer. ‘Eight regulators issued eight different guidance notes in response to the High Court judgment, with varying interpretations and different timelines. The Court of Appeal subsequently noted that supervision requirements are ‘a matter for the regulators’, precisely the outcome a coherent, unified framework should have delivered without two rounds of costly litigation’.

What the Panel Recommends

The Panel makes 10 recommendations. The headline items, being:

• a single regulator with specialist internal divisions replacing all eight frontline bodies;

• a regulatory perimeter redrawn around risk rather than professional title - expressly capturing AI tools, automated document services and digital platforms;

• abolition of the artificial service/conduct divide in complaints handling;

• establishing a single, universal compensation scheme for all consumers of legal services; and

• mandatory user-tested transparency standards for price, quality, and redress.

Drawbacks and Crosswinds Ahead

For all the coherence of the Panel’s diagnosis, the case for consolidation is not without its drawbacks.  A single body risks subordinating the distinct professional traditions - and the calibrated, title-specific oversight - that the present framework accommodates, substituting regulatory diversity for a monolith whose institutional priorities may not sit comfortably across the full spectrum of solicitors, barristers, notaries and the specialist professions. It would also remove the comparative discipline of an eight-regulator architecture overseen by the LSB, concentrating supervision in a single point of failure against which under-performance cannot readily be benchmarked.

The crosswinds are also considerable. Replacing the current settlement would require primary legislation to unpick the Legal Services Act 2007 - a demanding undertaking for which no government has yet shown sustained appetite, as the fate of the Panel’s identical 2017 call attests - and one that entrenched professional interests, from the Law Society and the Bar Council to CILEX and the smaller approved regulators, are expected to resist. Questions of funding remain unresolved too, not least who bears the cost of a universal compensation scheme and how cross-subsidy between professions of markedly different risk profiles is to be justified.

Practical Takeaways for Law Firms and Legal Practitioners

• Governance and risk frameworks will face sharper scrutiny now. The LSB's censure of the SRA and its first-ever use of Section 32 enforcement signal a more interventionist supervisory climate. Firms - particularly those pursuing acquisition-led growth or reliant on litigation funding - should expect heightened attention to financial resilience, and client account controls.

• First-tier complaints handling to get stricter scrutiny. 46% of complaints investigated by the Legal Ombudsman in 2023/24 revealed unreasonable first-tier handling. Expect regulators to demand robust complaints handling procedures.

• Get ahead on transparency. Price transparency without quality indicators is, in the Panel's phrase, half-transparency. Firms that build verifiable quality metrics, early on, will be well placed for any future mandatory standards.

• Supervision arrangements need documentary rigour. Post-Mazur, the delegation of litigation tasks to non-authorised staff is lawful only under genuine supervision and responsibility of an authorised person. Supervision frameworks should be written, current and auditable.

• Prepare for AI disclosure. The Panel calls for mandatory disclosure of AI use in service delivery and binding quality standards for automated tools. Practitioners deploying AI tools should consider implementing validation, version control and client-facing transparency, i.e., being clear on what they use AI for and when in their client engagements. They also need to be mindful to use such AI tools that will protect the client confidentiality.

• The corporate lens. Due diligence on law firm acquisitions, ABS investments and consolidator strategies would be well placed to price in structural regulatory change - transitional compliance costs, compensation scheme contributions and regulatory perimeter expansion. The Ofcom precedent cited by the Panel is instructive: from Green Paper to operational regulator in five years. Those advising on legal sector M&A may be better placed to treat that horizon as a live planning assumption and not a distant hypothesis.

For further information please email Raj Chavda or Phil Bowers or call 0151 906 1000.