20 Jul


CRL regrets that CILEX has announced that it intends to review the arrangements for the regulation of its members. This follows a previous statement by CILEX on 12 July 2022 to which CRL felt obliged to reply (https://cilexregulation.org.uk/message-from-your-regulator/). As CILEX acknowledges, its plans do not alter the existing regulatory arrangements including the need to comply with CRL’s Code of Conduct. CRL’s rules remain in full effect and will continue to do so for the foreseeable future.


In CRL’s view, CILEX’s actions are not compliant with the requirements of the Legal Services Act 2007 and the relevant delegated legislation. Its objectives are those of a representative body. CRL rejects the opinions expressed in CILEX’s Kenny Review. There is no basis to suggest, as it does, that CRL has “viability challenges” and will have a higher unit cost than other regulators. The cost to those CILEX represents is, in any event, only one element of the public interest for which CRL is responsible.


CRL’s financial position remains robust. Our last audited accounts show our highest ever levels of reserves, and we intend to hold the PCF at its current rate for this year, notwithstanding inflationary pressures. In order to preserve our strong financial position, we have notified CILEX of our intention to hold our reserves independently following the identification of CILEX’s rapidly deteriorating financial position.


We are disappointed that throughout its attempts to advance its chosen approach CILEX has failed to engage in meaningful consultation either with us or the regulated community. We agree that there is merit in considering changes to the current regulatory arrangements and based on 10 years’ experience we have previously announced that we will be moving shortly to consult on properly considered proposals. It is also a shame that Mr Kenny made no serious attempt to engage with us as the independent regulator in his review and it is not surprising, therefore, that his report contains several unsubstantiated assertions, and is in places just wrong.


CRL Chair, Jonathan Rees, said:


“We regret the announcement by CILEX to open negotiations on a transfer of regulatory responsibility to the SRA. Our position is that CILEX does not have the power to undertake this action. It is our role as regulatory body to decide independently of CILEX whether changes to the existing regulatory arrangements are needed. The course on which the CILEX Board has embarked is an unhelpful and costly distraction from tackling the real issues facing CILEX Fellows and consumers. We have done all we can to avoid a public dispute which we believe causes concern to those we regulate and disrupts our work. We have a positive agenda to improve regulation, and reduce costs, and will be bringing forward proposals after the summer. In the meantime, we will continue to do our job whilst we consider a further response, including possible legal action, to CILEX’s announcement.”


20 July 2022