A new statutory objective to identify and prevent economic crime would put the responsibility of legal services regulators ’beyond doubt’, the oversight regulator has told MPs. The Legal Services Board was submitting evidence to the House of Commons Public Bill Committee on the Economic Crime and Corporate Transparency Bill, currently undergoing line-by-line scrutiny.

Section 155 of the measure would add a new regulatory objective to the Legal Services Act 2007.

The super regulator said it supports the change as the current position is sometimes unclear. While 'it is possible to infer from the existing regulatory objectives in the act' that regulators have a duty to fight economic crime, the lack of explicit reference in the current rules 'has contributed to a position where the eight legal services regulators are taking different interpretations of the extent to which they should proactively focus on economic crime'.

For example, 'some regulators are far more ready than others' to pursue proactive measures against money laundering, the LSB said. 'The proposed objective would put beyond doubt that identifying and preventing the involvement of legal professionals in economic crime is within the remit of legal services regulators, including the LSB.'

The LSB also expressed its support for the bill's measure extending the fining powers of the Solicitors Regulatory Authority.

In other developments in the bill last week, security minister Tom Tugendhat MP refused to accept an amendment that would have given judges the power to dismiss legal cases found to be examples of strategic lawsuits against public participation. The bill is the wrong vehicle for a so-called anti-SLAPP law, the minister said, indicating that the Ministry of Justice will work on legislation to address the problem as a whole.

Meanwhile, an amendment to give the Office for Professional Body Anti-Money Laundering Supervision new powers and duties was  withdrawn. Another proposed clause, barring the appointment as a director of any person convicted under the National Minimum Wage Act, was voted down by nine votes to seven. 

Committee scrutiny of the bill resumes on Tuesday. 

 

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