The Institute of Chartered Accountants in England and Wales (ICAEW) has lost its appeal over extending legal services regulatory work after its application against the Lord Chancellor’s earlier refusal was turned down.
In 2016, the world leading professional body that promotes, develops and supports over 180,000 chartered accountants and students, applied to become a regulator of five further restricted legal activities – on top of probate services.
The ICAEW are seeking to widen its powers by extending their remit to include rights of audience and conduct of litigation. They wanted accountants and lawyers to play by the same set of rules and have an equal chance of succeeding. Currently accountants are at a disadvantage to lawyers due to not having professional privilege and are not able to carry out cases in court.
Even with the backing of the Legal Services Board (LSB) and the Competition and Markets Authority (CMA), the then Lord Chancellor, David Lidington turned down the application.
The institute felt Lidington’s decision was unlawful and should be overturned so took the case to judicial review.
Lidington outlined his decision in a letter which included five reasons with the following headings; governance and independence; the Lord Chief Justice’s objections; taxation services; notarial services; and complementary activities.
The decision was challenged by ICAEW but the judges at judicial review disagreed with their claims.
Duncan Wiggets, ICAEW executive director of professional standards commented on the judgement. He pointed out that the LSB had made a very clear to the former Lord Chancellor that ICAEW should be approved to regulate all five reserved legal services. He said: “The current lord chancellor will now need to re-take that decision, and we very much hope that he will seize the opportunity to extend choice in the market, in keeping with the spirit and intention of the Legal Services Act 2007.
“The decision to allow ICAEW to regulate probate in 2014 has already seen hundreds of ICAEW firms enter this market, widening access to justice for a greater number of consumers through these multi-disciplinary practices.
He added: “The Legal Services Act was meant to open up the market for the provision of legal services to increase competition, leading to improvements in quality and helping drive down costs.
“It encouraged non-traditional legal services regulators to become part of the regulatory framework so that other professional services firms might enter the legal services market and our application was welcomed by the CMA.
‘The former Lord Chancellor’s decision has set that back. The government now needs to consider whether changes are needed to the Act to ensure that it delivers the more competitive market it promised.”
Even though ICAEW is a non-legal body, in 2014, The LSB approved their application which gave them the power to regulate probate services and license Alternative Business Structures (ABS).
In 2014, Dorset-based Hope Shaw legal firm was given the all-clear to expand its small business and individual accounting provision by becoming the first sole practitioner to be given authorisation to provide probate services to clients.
Accountancy firm, Kingston Smith also became the first ABS accountancy firm to be given a licence by the ICAEW to carry out probate work.
Since ICAEW has gained the power to regulate probate, many accountancy firms have gained the accreditation to offer these additional services – with over 300 firms accredited as at the end of 2018.
To become accredited for probate services is a difficult task but clearly it opens up doors for more work. Elaine Griffiths, head of regulatory practice at ICAEW said: “the application process is rigorous and often includes additional training, probate work offers firms a real business opportunity. Combining inheritance tax planning and probate services enables firms to position themselves as a one-stop-shop for business advisory services.”
For more information on ICAEW’s Probate Financial and Annual Reports click here.
As a professional Will writer, what do you think of the decision?
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