CMA: Review starting later this year
Law firms, chambers and other legal services providers could be forced to sign up to comparison websites so that clients can let others know about the quality of service they received.
Their internal complaints records could also be made public under ideas floated by the Legal Services Board (LSB).
The oversight regulator is gearing up for the Competition and Markets Authority’s (CMA) expected review later this year of the progress made on its December 2016 report on the legal market.
Transparency was a core part of the CMA’s recommendations, one of which called for regulators to promote the use of independent feedback platforms to help consumers to understand the quality of service offered by competing providers.
A paper before last month’s meeting of the LSB said that while there has been good progress in some areas, such as increased price transparency, “there has been limited progress on promotion of feedback platforms and on quality indicators”.
It said: “Since consumers are often unable to assess the technical quality of work, even after the event, they largely rely on regulators to ensure legal work is competent… There is generally little existing data on the technical quality of work that could be made publicly available.”
While, longer term, the LSB’s work on ongoing competence may be the answer, “in the shorter term our focus is on improving signals on service quality”.
The paper suggested two ways this could be done. First was mandating the use of a public facility for customers to leave feedback on the quality of service they received.
The LSB explained: “The core outcome we want to achieve is that consumers can easily access information on service quality to help them choose between providers.
“It is possible to envisage various ways this could be achieved. Customer feedback websites are one example, but the available evidence is that consumer usage remains low and law firms are still not embracing them.
“In its final market study report the CMA considered, but decided against, mandating use by providers of comparison websites, since it was keen to see how the comparison sector developed. However, it noted that the ‘apparent lack of willingness [by law firms] to engage with comparison platforms may inhibit their widespread use and subsequent regulatory action may be necessary’.
“Given the market has not developed as hoped, there may be merit in revisiting this proposal, which could help these services gain a critical mass of users.”
The LSB said a variant on this would be to require providers to signpost to a comparison website but without an obligation to be a ‘member’ of one, while there may also be role for the Legal Choices website run by the legal regulators.
The second idea was for regulator to publish first-tier complaints data naming providers, as this could act as another quality indicator – this is strongly supported [1] by the Legal Services Consumer Panel. These are the complaints firms resolve without having to involve the Legal Ombudsman.
The paper said the LSB “may wish to revisit this issue, although in the executive’s view the regulators identified some good policy reasons not to pursue this now”.
Further, proposals by the Legal Ombudsman [2] to publish its full decisions, as well as annual reviews of the most complained-about lawyers and firms – “could result in significantly more data on complaints at the second-tier being put into the public domain”.
The LSB said it would initially wish to explore these two ideas with the legal regulators and the CMA before developing fully worked through proposals.
Ahead of the CMA review, it is working with the LSB and Ministry of Justice to research how effective the price transparency rules that came into force in December 2018 have been.
The LSB added that the CMA would review the case for extending access to redress for consumers using unregulated businesses.
Though it said the Ministry of Justice conducted an unpublished “light-touch review” of this after the CMA report and decided not to take any action, possible government proposals on consumer protection coming out in the spring could change this.