14 March 2012

LSB calls on consumers and indemnity insurers to help drive improvements in legal services

Regulators should empower consumers to drive improvements in the quality of legal services, while professional indemnity insurers could hand over firm-specific claims data to help target poorly performing practices, the Legal Services Board has suggested.

In a consultation issued yesterday on how regulators might prevent risks to, and improve, the quality of legal services, the LSB said consumer empowerment “has seen consumers drive change in markets through their shared commentary or feedback on services or brands such that a firm’s success depends on it engaging with empowered consumers”. Regulators could also use this information to target poorly performing practices.

It said a “truly independent reviewer” of the quality of service provided by law firms and chambers – providing consumers with ratings of lawyers – could assist with these goals.

A legal equivalent of Dr Foster – which provides comparative information on health and social care services – could be more than just a reference source for consumers, it suggested.

“A report that describes and rates the service outcomes can be instrumental in driving improvements to achieve or secure a good-quality reputation. If a trusted source, it is reasonable to suggest that this resource could become a legitimate trigger for targeted regulatory intervention.”

While recognising that various directories and websites already exist, the LSB cast doubt on the independence of some of them. “Ranking of firms by outcomes can be a powerful incentive to improve by increasing ranking to overtake competitors, but loses strength when unduly influenced by the very service providers it purports to rate.”

The LSB recognised that regulators already use a variety of methods to address some of the quality risks, including proactive entry and authorisation requirements as well as reactive investigation and enforcement. “To date, however, there has been little concerted work by regulators to reduce quality risks through better consumer empowerment – by providing consumers with data and tools to support choice, for instance.”

On PII, the LSB recognised that there may be data protection and confidentiality issues around insurers providing claims data to regulators, “but the common agenda of removing quality risks to consumers may be sufficient to prompt a debate to explore what options for data sharing and collaboration on profiling exist”.

The LSB is using the consultation to inform the development of a framework against which the regulators can identify and address quality risks in their specific market context.

LSB chairman David Edmonds said: “The importance of confidence in legal services to both individual consumers and the public interest at large makes maintaining standards of quality a compelling reason for regulation. We know that consumers expect safeguards for quality to exist, but evidence suggests that reality does not live up to those expectations.

“In setting out our approach to tackling risks to quality – as well as capturing the range of interventions that may be appropriate – we aim to ensure that this baseline is in place. It is clear that much more can be done to help consumers make informed decisions about which service is going to be best for them.”

 

By Legal Futures

Tags: Legal Services Board, price comparison, professional indemnity insurance, quality