[1]Hayter: regulation could result in less choice and higher prices
The will-writing debate moved towards the end-game today after the Legal Services Consumer Panel launched its investigation into whether the industry should be regulated.
However, the Legal Services Board (LSB), which will make the final decision and requested the panel’s help, is currently trying to secure £110,000 in funding to undertake research that it says would provide “an important springboard for the panel’s investigation”.
The investigation aims to determine the precise extent of the problems unregulated will-writing causes, which the panel says will be “crucial in determining whether regulation or other solutions are needed”.
The kind of problems identified include: badly written wills containing drafting errors; the will company putting pressure on the consumer to name it as executor of the estate, and so take a percentage of the estate in fees upon death; the final price of the will being much higher than the advertised price; lost wills due to poor storage or will companies becoming insolvent; and fraudulent activity.
The panel will also consider whether existing consumer protections are capable of addressing any consumer harm or whether new solutions are needed, including what the advantages and disadvantages of various ways of regulating will-writing may be for consumers.
Panel chairwoman Dr Dianne Hayter said: “The case for regulating will-writers may rest on whether there are abuses across the industry or just a few rogues who can be dealt with under existing laws. Finding evidence of badly written wills and underhand sales practices will be crucial to establishing this. Regulation could result in less choice and higher prices for consumers, so the panel will only recommend this step if there is convincing evidence that will-writing businesses are failing consumers.”
The panel estimates that unregulated will-writing companies have around 7% of the market (solicitors still dominate) but both the LSB and the panel believe that original consumer research is needed to build a clear picture of what is currently happening in practice. This would include a mystery or shadow shopping exercise to look at issues such as:
- How consumers shop around for wills;
- What the consumer experience is like buying a will;
- How the quality of wills produced varies between distribution channels;
- How common cross-selling of other services is when buying a will; and
- How firms selling wills approach the service and their marketing and selling techniques.
In his letter formally requesting the panel’s help, LSB chief executive Chris Kenny said the cost of this research is likely to be in the region of £150,000. The LSB is committing £40,000 towards it but “we need to secure further financial support from partners who share our enthusiasm to make this happen – we do not have the budge to fund the research alone”. To this end, Mr Kenny said the LSB has approached “several organisations”.
The panel is requesting submissions via its website (click ) by 15 December.