Law firms “must publish” fees for family and employment work

Chambers: Disappointed by slow progress with quality indicators

Law firms should have to publish their fees for family and employment work beyond unfair dismissal claims, Legal Services Consumer Panel (LSCP) has said.

The LSCP also said there was “an unacceptable lack of transparency” in plans by the Solicitors Regulation Authority (SRA) to cut law firm contributions to the Compensation Fund and asked to see evidence justifying the decision.

The SRA’s existing rules require law firms to publish costs information on their websites for certain categories of consumer-related work, including conveyancing, probate, immigration and employment tribunal claims for unfair dismissal.

Responding to the regulator’s consultation on its draft business plan and budget for 2023/4, LSCP chair Sarah Chambers said it was “of the strong opinion” that transparency measures “should now be extended to other pressing and important areas of law” where consumers were struggling, such as family and employment law.

The panel was “disappointed” by the slow progress made by the SRA in developing “quality indicators” which allow consumers to shop around, and “more effort” should be devoted to it – although the SRA published major research into this two days before her letter.

She said the panel would be writing to the Competition & Markets Authority (CMA) at the end of this year, “noting the slow progress on quality indicators seven years after the CMA’s first report and three years since the CMA’s last assessment”.

Referring to a paper published by the panel last year on standardising consumer information, she said: “Consumers’ ability to shop around and make informed decisions will continue to be hampered unless standardisation for the purposes of comparison is introduced by regulators and then monitored and evaluated effectively.

“And effective comparison can only be achieved if regulators work together to agree a format or template for pricing common services.”

Ms Chambers said it was “imperative that the SRA begins to consider the wider regulatory framework, and work with others to deliver not just the letter of the CMA recommendation, but the spirit of it too”.

On diversity and inclusion, the panel remained “frustrated with the lack of a clear vision, strategy and deliverables”, which left it “struggling to understand the extent to which progress has been made by the SRA on its diversity journey”.

She said the LSCP had “tracked back our responses to every business plan since 2017 and we have repeated the same concerns”.

Ms Chambers said there had been no “tangible outcomes” from SRA plans launched in 2020 to monitor diversity data, commission research and establish a group of experts.

“There appears to be few solutions and regulatory interventions to address long-standing issues. The business plan must include concrete commitments and targets to deliver tangible improvements to diversity and inclusion.”

On the budget for 2023/4, Ms Chambers said the panel was concerned about last year’s cuts in individual and firm contributions to the Compensation Fund and this year the SRA proposed to reduce contributions “even further”.

“There is an unacceptable lack of transparency around how the SRA can justifiably afford to offer this saving to firms.

“It is still unclear to us whether the SRA is expecting a significant reduction in claims, based on projections, or whether there are other drivers behind a lower projection.”

The LSCP had been calling for “several years” for data on claims paid and transparency on how the fund is managed and administered, and would continue to ask for it.

“We would like to see the rationale and evidence for making this reduction.”

In its response to the consultation, the Law Society said the SRA’s planned 11.7% budget hike was a “significant” increase.

“Given that many firms are facing inflationary pressures, it is vitally important that the SRA is focused on efficiency savings and costs are controlled to avoid unnecessary pressure on the practising certificate fee.”

The society generally welcomed the measures set out in the draft business plan, such as developing a “risk-based and effective approach” to anti-money laundering.

On technology, the society said the development of a sandbox by the SRA would be a “vital catalyst for technological innovation in our field” and agreed on the “pressing need for procurement standards for firms of all sizes”.

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