Consumer panel urges more fixed fees and SRA fining powers


Chambers: Very concerned about the lack of quality indicators

More use of fixed fees and an increase in the Solicitors Regulation Authority’s (SRA) fining powers are among recommendations made today by the Legal Services Consumer Panel.

It also called for urgent work on indicators to help consumers understand the quality of legal services providers’ services when deciding who to instruct.

The panel’s consumer impact report – last published in 2014 – is designed to provide an overview of the impact on consumers of the legal services reforms, and of progress towards implementing the Competition and Markets Authority’s (CMA) 2016 recommendations for improved competition in the market.

Last month, the CMA confirmed that later this year it would return to review the progress made since its report.

The report noted the panel’s own research showing a consistent increase in the availability and take-up of fixed-fee arrangements.

With the dwindling availability of legal aid, the panel said it was “even more important that consumers can plan and predict in advance the cost of procuring services”.

It continued: “Fixed fees facilitate this. Therefore, we urge regulators to promote and encourage fixed-fee arrangements where appropriate.”

The SRA has long complained about the disparity between its power to fine traditional firms and those working for them without having to refer them to a disciplinary tribunal – which is capped at £2,000 – and the limit for alternative business structures, which is £250m for a firm and £50m for an individual.

The report said the panel was concerned that the former power was “inadequate for effective deterrence”.

However, fining powers beyond £10,000 can only be changed via primary legislation, it said, urging the Legal Services Board to “support the SRA’s resolve to increase its fining powers”.

In her introduction to the report, panel chair Sarah Chambers said the 2014 report outlined the “pleasing progress” that had been made on choice and perceptions of value for money in legal services.

“But we expressed concern that regulators had not embedded consumer vulnerability in their work, that too few dissatisfied customers were seeking redress, and that there was an unacceptable absence of quality indicators.

“It is dispiriting that, despite repeated pleas from us to make progress in these areas, and a lengthy and evidence-rich report from the CMA in 2016 making similar points, we find ourselves having to repeat the same messages.”

While consumers were shopping around a little more and there has been “some progress” with price transparency, she said “we are still very concerned about the lack of quality indicators, that vulnerable consumers on low incomes are having even more difficulty accessing legal services, and that over a third of dissatisfied customers are still choosing not to seek redress”.

But Ms Chambers said there were positive signs too, such as greater collaboration among the legal regulators to make progress on quality indicators, “perhaps invigorated” by the CMA’s return to the fray.

“They are also talking more about how to address the issues of vulnerability, particularly in view of the problems caused by the reductions in legal aid and other free sources of advice. Innovations using digital legal services have the potential to help in this as in other areas.”

The report noted there was “a persistent dearth of evidence about the technical quality of legal work”; where there was evidence – such as asylum advice and criminal advocacy – “we know that concerns persist about the quality of advocacy and progress to address the issues highlighted”.

It argued that in general the sector has “a very long way to go in empowering consumers to compare the quality of legal services providers”, thereby hampering competition.

Greater use of regulatory information, such as complaints data and enforcement action, “could provide consumers with signals about service and advice quality”, it said, calling too for Legal Ombudsman decisions to be published in full.

Ms Chambers called on all the regulators to work together “to establish a common quality indicator framework to address both service and technical quality, as a matter of urgency”.

Other issues raised the report included the need for more innovation, “as well as focused support and prioritisation of innovation that facilitates access to justice for those on low income or with other difficulties”.

It said that black, Asian and minority ethnic (BAME) consumers are “generally less empowered and experiencing a less positive or satisfactory service” and regulators needed to address this.

The panel reiterated its support for full independence between regulatory and representative bodies.

The time it took to resolve interference by the Law Society into the SRA – which ultimately led to an unprecedented public censure – and then for the LSB to draw up new internal governance rules “calls into question how nimble regulation is at tackling serious breaches”, the report said.

“There will continue to be strains, if not problems, until there is full independence between the regulatory and representative bodies. This is an area the panel will highlight to the CMA when it returns to reassess the sector.”




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