Divisional Court dismisses claim by accountants’ regulatory body to regulate legal services

05/03/19

The Divisional Court, Leggatt LJ and Mrs Justice Andrews DBE, today dismissed a complex judicial review on ten grounds brought by the Institute of Chartered Accountants in England and Wales (the “ICAEW”).

The ICAEW is a designated regulator in the areas of audit, insolvency and investment business.  It is already an approved regulator and licensing authority under the Legal Services Act (the “Act”) for probate activities.

The ICAEW applied to be designated as both an “approved regulator” and a “licensing authority” in respect of the exercise of rights of audience, the conduct of litigation, notarial services, reserved legal activities and the administration of oaths.  It relied on the Act as setting out a new regime for the regulation of legal services, and the opening up of the legal services market.  Its application was granted by the Legal Services Board. 

However, the Lord Chancellor decided not to approve the ICAEW’s application, relying on a range of issues raised by the ICAEW’s application itself.  The ICAEW brought a judicial review against the Lord Chancellor’s decision challenging each reason relied on by the Lord Chancellor, and alleging that it displayed two “serious errors of law”: that the Lord Chancellor had applied the wrong legal test to his decision (which required him to follow rules set down by the Legal Services Board) and that the Lord Chancellor’s judgment had undermined the purpose of the Act, which was to encourage competition. 

Following the hearing before the Divisional Court, each of the numerous grounds of challenge brought by the ICAEW were dismissed.  In particular, the Court dismissed the two alleged serious errors of law, and found that the Lord Chancellor was entitled to reach the decision that he did for the reasons that he gave. 

The Court held that the Lord Chancellor had not individually considered the position in respect of the administration of oaths.  As such, this element of the decision was quashed and remitted for reconsideration.

The Lord Chancellor was held to be entitled to 80% of his costs.

The judgment is here.