There is “clear scope” for the legal regulators to “pool their resources and work together” on research and policy relating to consumers, a report has found.
The Legal Services Consumer Panel (LSCP) said all regulators should carry out regular research “to understand consumer experiences in the market” and there should be a common definition of consumer vulnerability.
The LSCP said the report, Consumer focused regulation in legal services, by London Economics, showed there was “ample room for improvement in the regulation of legal services” and regulators should invest more in consumer research, while collaborating on vulnerability.
The overall objective of the study, which drew on the experiences of the financial services and telecommunications sectors as well as legal services, was to develop a set of indicators to help regulators be “thorough and consistent in how they prioritise the interests of consumers” across all of their activities.
The indicators were grouped around six categories – governance, strategy, consumer research and engagement, policy development and implementation, their approach to consumer protection, and “responsive regulation”.
The LSCP said the Legal Services Board had incorporated the report into its regulatory performance framework sourcebook, so legal regulators could self-assess against the indicators and improve their performance.
Researchers said that, given the “often cross-cutting nature” of legal issues and emergence of new technology, there was “clear scope for regulators to pool their resources and work together on innovative research and policy design relating to consumers”.
Regulators should collaborate not only with each other but with consumer groups, which “may have valuable insights, research techniques or data that regulators do not have access to (including access to vulnerable or hard-to-reach consumers)”.
There was “an overall lack of consistent consumer research across the legal sector”, and only a few periodic consumer surveys, which reduced regulators’ ability to track consumer experiences over time, understand key trends and identify “emerging sources of potential harm”.
Differences in size and budget between regulators would impact “the scale of research that can be carried out”, with larger regulators having the capacity to carry out more extensive consumer research.
“However, given the critical importance of consumer insights in shaping the wider regulatory agenda, all regulators should make efforts to carry out periodic research to understand consumer experiences in the market.”
The research found no harmonised definition of consumer vulnerability across legal regulators.
Some, including the Solicitors Regulation Authority and the Bar Standards Board, had adopted a definition in line with the British Standard on inclusive service provision (BS 18477), which had also been adopted by the LSCP.
“A key benefit of the British Standard is that it focuses on identifying and accounting for risk factors – defined as circumstances which could contribute towards making a consumer vulnerable.
“One area of good practice would be for the remaining regulators to also adopt a definition of consumer vulnerability in accordance with the new British Standard.
“Having a harmonised definition of vulnerability across legal services will help to ensure that regulators are speaking the same language and that vulnerable consumers receive appropriate treatment.”
Sarah Chambers, chair of the LSCP, commented: “For many years, we have said that legal services regulators are not sufficiently consumer-focused.
“We have shared evidence of weaknesses and offered suggestions for improvements. Indeed, most of the findings and best practices highlighted in the report are examples we have noted in previous work.
“However, this is the first time that we have presented a single report showing regulators how to evidence or demonstrate the details of their focus on consumers.”