Do you agree that guidance with outcomes is the right approach to take to assist regulators to pursue the new regulatory objective alongside the others in section 1 of the Act?
Yes. As observed in the LSB’s consultation paper, there was considerable confusion during the passage of the Economic Crime and Corporate Transparency Act 2023 (ECCTA) about the implications of the new economic crime regulatory objective. In particular, the objective was misconstrued as introducing new requirements directly on legal professionals to ‘police’ economic crime, when its purpose was in fact to clear up uncertainty about the role of regulators.
As we noted at the time, the new regulatory objective clarifies and crystallises, for the avoidance of doubt, what can already be inferred from the existing regulatory objectives of legal sector regulators. This is that promoting the prevention and detection of economic crime is implicit in other objectives set out in section 1 of the Legal Services Act 2007:
- to protect and promote the public interest;
- to support the constitutional principle of the rule of law; and
- to promote and maintain adherence to professional standards.
The new objective therefore resolves any lingering doubt that identifying and preventing the involvement, unwitting or otherwise, of lawyers in economic crime falls within the appropriate remit of legal sector regulators.
To read the submission in full, click on the link below.
