LSB and consumer panel back OFT call for simpler legal regulation

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21 January 2013


Davies: a good complaints process isn’t an optional extra

The Legal Services Board (LSB) and Legal Services Consumer Panel have thrown their weight behind Friday’s Office of Fair Trading report that urged continuing simplification of the regulatory regime for lawyers, particularly around complaints.

The LSB said the report confirmed its own findings that there is more to do to ensure clear communication to consumers, which led to the LSB issuing regulator-by-regulator action plans for improvements. It “also contains a more fundamental message about the need for continued simplification of the regulatory regime”.

The LSB said: “On both alternative business structure approvals and education and training, it highlights concerns that regulatory requirements are over-elaborate and, potentially, getting in the way of innovation and growth. It also highlights the problems of regulatory inconsistency and complexity caused by the existence of reserved activities.”

LSB chief executive Chris Kenny said the report was “a timely reminder that much more needs to be done to modernise legal services market and make it more consumer friendly”.

“This is an issue already identified by the LSB and we have signalled in our draft business plan for 2013/14 that we will be commencing work on the cost and complexity of regulation generally. We will also be looking to hold regulators to account as they move towards regulating by clear outcomes rather than elaborately detailed rules.

“It is also why we will be underlining the need for solutions which allow more diverse routes of entry to the legal services market as a whole – not just its current professions – through the education and training review.”

Elisabeth Davies, chair of the consumer panel, said: “This report chimes with the panel’s own findings on complaints-handling that show far too many consumers do not complain to their lawyer because they are confused about what to do and believe they won’t get a fair hearing. This is not helped when signposting rules designed to break down these barriers are seemingly ignored by so many law firms.

“A good complaints process isn’t an optional extra – it’s vital for consumer confidence in the profession as a whole, makes good business sense and is critical for raising standards. The OFT rightly wants consumers to drive competition by voting with their feet when buying legal services, but they won’t do this unless they are confident that the complaints system will protect them if things go wrong.”

The Chief Legal Ombudsman, Adam Sampson, said its own research had also drawn similar conclusions about why many dissatisfied legal service users do not complain. “For instance we found that consumers often believe they won’t get a fair hearing or that lawyers aren’t signposting customers to the Legal Ombudsman.”

He welcomed the estimate in the report that the introduction of the Legal Ombudsman has reduced the cost of complaints handling in the legal services sector by around £18m per annum, or 51%.

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