Regulation is the key
1 Feb 10
ICAS was invited to give evidence to the Scottish Parliament’s Justice Committee at the start of last month on the proposed Legal Services (Scotland) Bill
Vivienne Muir, ICAS executive director, regulation and compliance, and regulation and compliance project director Charlotte Barbour, both appeared in front of the committee on 5 January convened by Bill Aitken MSP, shadow cabinet secretary for justice.
ICAS had already made a written submission to the Justice Committee stating its support for moves to facilitate the creation of multi-disciplinary practices, so that a multidisciplinary service including legal and financial advice could be obtained by consumers from a single firm.
ICAS stated that its charter requires it to work in the public interest, and said it considers the public interest in this instance to be the availability of high-quality legal and other professional services that provide value for money.
Speaking to the committee, Vivienne Muir said: “Certainly, we are in favour of the bill. However, its success will depend on the regulatory approach. If we could build our existing processes into a regulatory approach for different types of licensed providers, that would be beneficial and cost effective.
“We will have to enter some form of memorandum of understanding with the other professions so that we understand where we have to work together and share information.”
ICAS has recommended that consideration be given to using an adapted version of the existing regulatory regimes in place, to keep costs to a minimum. It has cited its regulated non-member model, whereby a solicitor could be a principal in a firm of chartered accountants.
In such a scenario, ICAS said the entity’s regulation would be provided by the Institute’s existing regime and individual regulation of the solicitor would be by the Law Society of Scotland – both extant regulatory functions.
Further tailoring of the scheme would be required, but this would broaden choice in the professional services market and could be undertaken at a minimal cost.
ICAS said it was a model that had served the accountancy profession well and said it could be adapted to the legal profession at far less cost than the current proposals, which would require a new regulatory scheme.
Vivienne Muir said: “ICAS operates a fairly comprehensive regulatory approach for its members. Our chartered accountant firms comprise non-members as well as chartered accountants.
“In order to bring those non-members into the regulatory structure, they can become regulated non-members — there are contractual arrangements under which non-members come to the regulatory fore.
“The advantage is that when we go out to a firm we can monitor the whole firm, as opposed to looking just at our members.
We are therefore bringing non-members into the regulatory framework.
“It is a simple way of doing things and means that we can go out and assess the firm for quality and competence. The method has worked well for the accountancy profession.”
Asked by committee member Cathie Craigie, MSP for Cumbernauld and Kilsyth, about the need to reconcile the differences between solicitors and accountants, Vivienne Muir said: “Conflict has to be dealt with by each of the institutes.
“We all have codes of practice and ethical guides that deal with our own conflicts of interest. The regulation of individual professions will continue.
“We have to sit down and see whether, from an entity and licensed provider perspective, there are any potential conflicts that we have to address, but that could be done by way of a memorandum of understanding.
“We have already had some discussions with the Law Society on that quite sensible approach.”
Following the hearing, Charlotte Barbour said: “ICAS is proud to contribute to the process of legislation and hope that our contribution will help shape that legislation to maximise its benefit to all parties concerned.”
A full transcript of the meeting is available from www.scottish.parliament.uk and you can watch proceedings at www.holyrood.tv