Consumer panel questions Law Society reaction to single compensation fund proposal

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1 July 2013

Davies: frustrated over lack of data

The Legal Services Consumer Panel has questioned the Law Society’s strong reaction to its recommendation that the possibility of a single compensation fund across the legal profession be explored, including whether the society has actually read all of its work on the issue.

In a letter to the Legal Services Board that sought to dismantle the panel’s recent report, the Law Society concluded that it does not contribute “materially” to the debate.

Chancery Lane criticised the lack of detail in the proposal, but the panel’s chairwoman, Elisabeth Davies, told Legal Futures that the report “makes clear” that a single financial protection regime should be fully scoped in order to assess the costs and benefits.

“We have not recommended that such a scheme should be set up immediately without first understanding the potential impacts,” she said.

“The sorts of issues that the Law Society raises are ones we would expect to see considered in such a scoping exercise, but it would not have been appropriate for the panel to set out a detailed blueprint at this stage. Our analysis suggests there is sufficient merit in a single regime to explore this further and we note that the Council for Licensed Conveyancers has already of this suggestion.”

Ms Davies also disputed the Law Society’s assertion that the panel has not considered the appropriate level of risk that consumers should bear.

She said: “In addition to the report on financial protection arrangements, we published a separate paper on the division of risk and responsibility between providers and consumers, and commissioned a series of focus groups with consumers on the topic to find out their views.

“We concluded that the current level of protection is generally right, and that consumers should not, for example, be forced to seek their own insurance cover. Since the Law Society’s letter does not reference this paper, it is unclear whether they have read it.”

Ms Davies said the panel shared the society’s frustration about the lack of hard data – having raised it in the report – which was why some of its recommendations related to data collection, transparency of arrangements and key performance indicators.

“We are pleased that the Law Society supports many of the features that the panel sees as good practice in a consumer protection system and look forward to working with them and others to bring their own and other regimes up to scratch.”

The panel has found support from the Legal Ombudsman. Chief Ombudsman Adam Sampson said: “The current consumer protection mechanisms across the legal sector are cumbersome and complicated. We have seen first hand the delay and cost that ensues in needing to negotiate different sets of funds – it isn’t easy for us at the ombudsman let alone for individual consumers waiting for some form of justice to be done.

“We welcome the calls from the consumer panel and the chair of the Council for Licensed Conveyancers for something to be done to simplify the current system, without losing any of the key protections offered by any individual scheme.”

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