Justice Committee questions LSB leadership amid regulatory criticism
The Justice Committee has questioned Monisha Shah, the Government’s preferred candidate for Chair of the Legal Services Board (LSB), during a pre-appointment hearing focused on regulatory performance, sector challenges, and leadership priorities.
The hearing, held on 25 March 2026, examined Ms Shah’s suitability for the role at a time when the LSB faces scrutiny over its oversight of legal regulators and wider concerns about the effectiveness of the legal services framework.
Ms. Shah, who does not come from a legal background, outlined her experience in regulation, governance, and public service. She highlighted previous roles with organisations including the Office for Students, Ofcom, and the Advertising Standards Authority, as well as her position as Chair of the King’s Counsel Selection Panel.
Committee members raised questions about how she would manage potential conflicts of interest between her current responsibilities and the LSB role. Ms Shah stated that established processes for recusal and conflict management were robust and that she would step down from roles where necessary if conflicts arose.
The Committee also examined the LSB’s oversight function, particularly in light of recent criticism of a “light-touch” regulatory approach. Ms Shah acknowledged concerns about regulatory effectiveness and emphasised the need for oversight to be more risk-based, evidence-led, and focused on preventing harm to consumers.
She referred to recent enforcement action taken by the LSB against regulators and noted that such measures indicate the Board’s willingness to act. However, she also stated that enforcement typically occurs after harm has already taken place, highlighting the importance of earlier intervention and improved market monitoring.
The discussion addressed high-profile regulatory failures, including cases involving collapsed law firms. Ms Shah said there were lessons to be learned regarding the speed of intervention, financial oversight and the monitoring of rapidly growing firms with complex ownership structures.
Committee members further explored broader challenges facing the legal sector, including unmet legal need, court backlogs, and pressures on legal aid. Ms Shah noted that while these issues are influenced by government policy, the LSB has a role in contributing to the wider debate and ensuring regulatory objectives are met.
The hearing also considered the impact of an ongoing public bodies review of the LSB. Ms Shah said the review presents an opportunity to assess the organisation’s future direction and ensure its oversight role remains effective and proportionate.
If appointed, Ms Shah indicated she would begin with a period of engagement with stakeholders across the sector to build an evidence-based understanding of priorities before setting strategic direction.