Consumers, solicitors and will-writers have united to condemn the not to recommend to the government that estate administration become a regulated activity.
However, it has been welcomed by the Institute of Chartered Accountants in England and Wales (ICAEW), whose members often conduct this work.
Elisabeth Davies, chair of the Legal Services Consumer Panel – whose research underpinned the LSB’s work and which recommended that this work should be regulated – said it was “very disappointing”.
She added: “While unregulated businesses may currently have a small market share, the damage they can cause to beneficiaries – either through fraud or poor service – is potentially huge. Dealing with an estate can involve life-changing amounts of money, but this decision will leave people without a safety net should things go wrong, and at a time when they are feeling at their most vulnerable.
“Fast progress is now needed on self-regulation and measures must be taken to reduce fraud. Having taken this decision, the LSB must work with the Legal Ombudsman on an accelerated timetable to create the voluntary jurisdiction built into the Legal Services Act. If consumers are to be protected, voluntary jurisdiction quickly needs to move off the drawing board and into reality.”
Law Society president Lucy Scott-Moncrieff said the omission “risks consumers losing everything”. She explained: “We submitted evidence to the LSB of people who have been prosecuted for running off with estates, among other problems that have been caused by unregulated people doing this work.
“At the moment unregulated individuals are charged with distributing considerable sums of money. It is becoming more difficult to assist consumers to identify reputable service providers. The evidence hints at many more cases where beneficiaries do not obtain what they should.”
Paul Sharpe, chairman of the Institute of Professional Willwriters, added: “There is a huge risk for consumers because this process involves handling money and assets belonging to a deceased person. These sums can often amount to hundreds of thousands of pounds and are susceptible to loss due to fraud or theft.
“We will continue to work to prove this conclusion is wrong and will continue to campaign for estate administration to be regulated.”
In a statement, the ICAEW said: “The announcement by the LSB confirms that accountancy firms can continue to provide a wide range of services including estate administration to the general public. Lots of firms from the largest to the smallest on the high street offer these kinds of services, as well as accountancy, and common sense has prevailed.
“ICAEW has been working behind the scenes on members behalf to ensure that the LSB is aware of the work that ICAEW chartered accountants do in this area and we are pleased that the LSB has listened and responded to our feedback.”