Supermarkets and banks would have to pass a "fit to own" test if they want to provide legal services in Scotland, under proposals published by the Scottish Government today.
Supermarkets and banks would have to pass a "fit to own" test if they want to provide legal services in Scotland, under proposals published by the Scottish Government today.
A consultation paper sets out ministers' plans for alternative business structures (ABS) for the legal profession.
The changes have been branded "Tesco law" in England and the paper today says there should be no restriction on the kind of organisation offering legal services.
Outside owners would also have to comply with a code of conduct.
The details of the "fit to own" test would be specified by the regulator, but the criteria would include honesty, integrity and reputation, as well as competence and capability and financial soundness.
"This a once-in-a-generation opportunity to create a more flexible and modern regulatory framework for Scotland's legal services," justice secretary Kenny MacAskill said today.
"A flourishing legal profession is a crucial part of the supportive environment for our business.
"The proposals put forward by the Law Society and Faculty of Advocates earlier this year made clear that the regulatory framework must be proportionate to the size and scope of the legal services market in Scotland.
"We want to avoid having too many bodies and unnecessary tiers of regulation.
"Instead we should concentrate on developing a robust system of regulation to protect the profession's core values and enshrine the profession's commitments to service, probity and excellence."
The proposals in the consultation paper today include that regulation of alternative business structures should apply to any other form of business where a legal professional is involved in providing legal services.
The alternative business structures will be regulated by an approved regulator, authorised by Scottish ministers, with the agreement of the Lord President.
But professionals within the new set-up will continue to be regulated by their own professional bodies.
The governance of the Law Society is also to be reviewed and the regulatory arrangements for the Faculty of Advocates are to be made clear.
The shake up was prompted after consumer group Which? submitted a super-complaint to the Office of Fair Trading (OFT) asserting that the current regulation of Scottish legal forms restricts choice to consumers and prevents the formation of alternative business structures (ABS).
"The consultation is an important step along the road to further liberalisation in Scotland's legal profession," said Richard Henderson, president of the Law Society of Scotland.
"The forthcoming Legal Profession Bill represents a huge opportunity to modernise legal services and boost the potential for legal businesses to thrive both at home and internationally, while retaining high standards and promoting access to justice."
