A ‘Consumer Welfare Index’ that will measure the effectiveness of the legal services reforms is to be developed by the Legal Services Consumer Panel, it announced today (30 March).

Publishing its first business plan, the panel – which advises the Legal Services Board – said it would also be looking at ways to ensure that price comparison websites develop in the legal market in a positive way for consumers.

The index will consist of “a basket of indicators that, taken together and tracked over time, could act as reliable proxies” for whether the reforms are producing positive benefits for consumers.

The aim to maintain a focus on the long-term goals of the reforms “and avoid the risk of this vision being lost in the daily grind of regulation”. The index will be compiled using a mixture of published data and original research.

The business plan lists four other main priorities for the year ahead:

• Completing the market investigation into referral arrangements;
• Ensuring the right safeguards are in place to support the launch of alternative business structures;
• Examining the credibility of the new breed of price comparison websites in the legal services market; and
• Promoting good practice in consumer engagement among regulators.

Recent Legal Services Board research indicated that consumers would like to see price comparison websites in the legal market, and the panel said it views such sites as “a positive development”.

But it continued: “However, in some sectors, concerns have been raised about businesses ‘gaming’ the sites and a lack of transparency about how these services operate. Regulators have needed to take a closer look in order to ensure a fair playing field and restore consumer confidence.

“The consumer panel is keen to ensure that the new breed of comparison websites in legal services do not fall into the same traps. We will draw up a set of good practice standards building on experience from other arenas and assess the extent to which the services meet the needs of users.”

Tags: Legal Services Consumer Panel, price comparison, referral fees