Regulating AI: Legal Services Board strategic approach

The Legal Services Board has set outs its pro-innovation approach to the regulation of artificial intelligence (AI) in the legal services sector (click here).

 The Legal Services Board is an independent body established under the Legal Services Act 2007 to regulate specific regulators of legal services (including Solicitors Regulatory Authority, Bar Standards Board, and Institute of Chartered Accountants in England and Wales). The Act establishes nine regulatory objectives including ‘including protecting and promoting the public interest, improving access to justice, and encouraging an independent, strong, diverse and effective legal profession’, which, the LSB explains, ‘ensure a clear focus on regulation in the public interest’. The LSB covers England and Wales only.

The LSB’s ‘focus as oversight regulator is outcomes-based rather than technology-specific – and as such the regulation of the use of AI falls within our consideration of the regulation of the wider use of technology and innovation and their impact in the sector’

Here we summarise the key points, focussing on new statutory guidance for the regulators it oversees, updates on how it assesses regulators’ performance, and plans for the year ahead.

The LSB’s new statutory guidance on technology and innovation

The LSB has produced statutory guidance for legal services regulators  it oversees on promoting the use of technology and innovation to improve access to legal services.  

The guidance sets three outcomes the LSB expects regulators to pursue when developing their own regulatory approaches to technology and innovation, including AI:

1. Outcome 1: Regulation enables the use of technology and innovation to support improved access to legal services and address unmet need.
2. Outcome 2: Regulation balances the benefits and risks, and the opportunities and costs, of technology and innovation for the greater benefit of consumers.
3. Outcome 3: Regulation actively fosters a regulatory environment that is open to technology providers and innovators.

The LSB explains that the “guidance is non-prescriptive and allows regulators to consider their approaches to meeting the outcomes in a way that is most appropriate to their regulated communities.” That means that regulators could, but aren’t required, to develop or publish their own AI-related guidance.

How the LSB assesses regulators’ performance

The LSB “monitors and assesses legal services regulators’ performance against the standards and characteristics set out in [its] Regulatory Performance Assessment Framework.”

In relation to technology and innovation, the framework includes the following characteristic that the LSB expects effective regulators to be able to demonstrate: 

‘Actively encourages innovation and innovators in the interests of improving access to services; identifies and mitigates risks appropriately without allowing them to become obstacles’ (Characteristic 13)

The LSB will seek assurance from regulators as to how they have taken account of the guidance in their regulatory approach to technology and innovation as prat of LSB’s annual performance assessments.  Also, the LSB will seek assurances from regulators that they have considered the LSB’s guidance outcomes, and seek specific information about their approaches to regulating the uses of technology or other innovations.

The LSB considers that individual regulators are best placed to assess posed by the use cases of technology and other innovations, including AI, within their regulated sectors and to put in place mitigation strategies in line with the LSB’s guidance outcomes.  Some of the regulators have already been active:

1. the SRA’s Risk Outlook Report on the use of artificial intelligence in the legal market (November 2023);
2. the Law Society’s guidance on generative AI – Generative AI: the essentials (November 2023);
3. the BSB’s Guidance on ChatGPT and safely and effectively navigating AI in legal practice (October 2023); and
4. the Bar Council’s Guidance for Barristers on generative AI - Considerations when using ChatGPT and Generative AI Software based on large language models (January 2024).

The LSB’s plans in relation to AI, technology and innovation over the next year.

The LSB intends to ‘remain proactive in responding to the use of AI across the legal sector and in monitoring legal services regulators in ensuring safe uses of AI that benefit legal services users’. Specific activities planned include:

1. building horizon scanning capabilities to detect opportunities and risks;
2. reviewing existing guidance on regulatory arrangements for education and training;
3. engagement with other regulators to understanding their capacity and capabilities to implement the UK government’s AI principles, and to consider how to share case-studies.

If you have any questions or would otherwise like to discuss any of the issues raised in this article, please contact Lucy Pegler, Tom Whittaker, Brian Wong or Liz Smith. For the latest updates on AI law, regulation, and governance, see our AI blog at: Burges Salmon blog (burges-salmon.com)