BRITISH PROFESSIONS TODAY: THE STATE OF ... - Property Week

2.3 Regulated self-regulation
Regulatory structures are becoming more and more
blurred in today’s global, fragmented society. In the past
concrete self-regulation has been a defining characteristic
of a profession; now regulation is referred to in “layers”
and degrees (Kaye 2006). One speaks of a “regulatory
landscape” involving not only actors such as state institutions
(eg ministries, departments, agencies, supra-national bodies
such as the EU, international bodies such as the WTO)
and non-state institutions (eg firms, committees, associations,
and networks) but also economic (eg the market) and social
conditions (eg norms, cognitive frames, technologies).
Regulation can take many forms and can be done via various
instruments and techniques, including but not limited to rules
(national or international), monitoring, sanctioning, trust, the
interaction of rational actors in the market, or the structuring
of social forces (Black 2002). These new processes of
regulation have been termed “regulated self-regulation”
(Kaye 2006), or “meta-regulation” (Scott 2004), both of
which refer to the “decentred” understanding of regulation
deemed necessary in the 21st century (Black 2002).
How has this process developed in Britain? Particularly in
the past decade, the paradigm of professional self-regulation
has been called into question with significant reforming
pressures. The main impetus for British government’s recent
reforms has been the Office of Fair Trading’s (OFT) 2001
report, Competition in the Professions. The basis of the
report was a consultation exercise that allowed 93
professional bodies across a whole sector to identify possible
restrictions on competition. The report identified restrictions
arising from law, professional rules, or other sources, and
challenged those responsible to remove the restrictions
unless they could be clearly identified as benefiting customers.
The government was called to address those restrictions
originating in statute; eg to remove the exclusion of
professional rules from the Chapter I prohibition which
existed at the time. The majority of restrictions, however,
were found to originate with self-regulatory organisations
(SROs), who were called upon to either remove or justify
them. 8 Professional bodies were given twelve months to do
so, with the OFT threatening to use competition enforcement
powers if rules appearing to infringe UK competition law were
not addressed.
Many of the OFT’s identified restrictions were addressed
by professional bodies, such as restrictions on comparative
advertising and restrictions on direct access to the
professional. The OFT also found the professions’ arguments
on behalf of certain other restrictions persuasive. However,
some significant restrictions remained unaddressed. This was
the key motivation for the government’s independent reviews
of regulatory reform in specific professions (for example, the
Smith Reports 2002-2005 for the medical profession, the
Clementi Report 2004 for legal professionals, and the Morris
Report 2005 for actuaries), as well as professions taking action
themselves to pre-empt similar reviews (such as the Carsberg
Report 2005 for surveyors). As Phillip Collins, Chairman of
the OFT, explains:
“ The OFT’s experience has been that
the professions, when confronted with
well articulated arguments, have often
responded to the plausible threat of
enforcement by amending their rules
as requested.”
(Collins 2006, footnote 31 corresponding to section 4.7).
8 “Where restrictions on competition exist, or are proposed, in
relation to a profession, the onus should be on the defenders or
the proponents (eg the Government in the case of some new
form of regulation) to show why the restrictions are essential
and proportionate to achieve their principal purpose, such as
the protection of the consumers, while not unduly restricting competition.
Where the professions maintain self-regulatory powers, competition
agencies can seek to ensure that such powers are subject to independent
oversight by infl uencing Government decisions on the regulatory
framework” (Collins 2006; 8.5).
British Professions Today: The State of the Sector © Spada Limited 2009 13