Making lawyers publish “average” prices will energise consumers, says panel

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25 July 2016

Davies: Shouldn't providers of services be able to give clients a range of prices?

Davies: Shouldn’t providers of services be able to give clients a range of prices?

The Legal Services Consumer Panel said last week that it was “not blind to the challenges of increased price transparency”, but insisted that making lawyers publish “average” prices could be the catalyst for making consumers ask more questions about cost.

Responding to criticisms of its proposal, panel chair Elisabeth Davies said there must also be scope “to improve estimation processes and improve communication with clients to ensure that any “wild variations between estimates and actuals are well understood”.

After all, she pointed out, “providers of legal services run businesses dependent on this information”.

The panel’s long-running complaint about the lack of price transparency in the legal market was backed up earlier this month by the interim report of the Competition and Markets Authority (CMA), which said it was inhibiting consumers from shopping around.

Further, 26% of complaints that reach the Legal Ombudsman are about costs issues, while research shows that the perception of high cost acts as a barrier to accessing legal advice.

Writing on the panel’s website, Ms Davies said: “Since we published our report on open data, we’ve heard numerous arguments against price transparency and we’ve heard about the challenges of pricing legal services. Our tracker survey continues to show that fixed fees are on the increase, because this is what consumers want.

“We know fixed fees cannot be offered in all cases, but shouldn’t providers of services be able to give clients a range of prices, using previous experience and professional expertise to cost appropriately?”

She continued: “Information provision may not start out perfectly. We have to be pragmatic. We recognise that it won’t be feasible to publish prices in the same way for every area of law. And we accept that the average cost is not an indicator of actual price. But it’s a start and it could be the catalyst needed for consumers to make detailed enquiries about cost.”

Ms Davies acknowledged that there was “no single blueprint for information provision” and that the information has be contextualised to make it meaningful.

“Regulators and businesses must do more to understand consumers,” she wrote. “They must research which information consumers prioritise and concerted effort must be applied to presenting this information in the most effective way.

“And then businesses or regulators using information must go back and evaluate – did it work? For all consumers? Or just a specific segment or group of consumers?

It is hard to argue against the need for regulatory intervention when the market is simply not responding to consumer needs. Without intervention this information will not get into the public domain, and the ability of consumers to shop around, compare, and truly drive competition will continue to be curtailed.

“The panel will continue to engage with the CMA to ensure that the final remedies it proposes offer lasting change in the sector.”

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