LSB demands regulators deliver “real change in outcomes for consumers”

Phillips: Building on the progress made so far

The Legal Services Board (LSB) has today demanded further action from regulators to deliver “real change in outcomes” as it publishes a draft statutory policy statement on empowering consumers.

This will include demanding that they and those they regulate publish more information to help consumers shop around and tighten up compliance with existing rules.

The LSB said it expected regulators to have regard to performance data – such as error rates as well as complaints, and customer “feedback, ratings and reviews” – in improving information for consumers about law firm quality.

The oversight regulator said there was a “longstanding issue” in the legal services market that too many consumers “do not engage effectively”.

“We consider that consumers need information about the price, quality and service of legal providers, as well as information on regulation and redress, so that they are best equipped to shop around and make effective choices.”

Both in its market study in 2016 and follow-up review last year, the Competition and Markets Authority (CMA) found that the market “was not working in the interests of consumers”, particularly individuals and small businesses.

It said greater transparency was needed and charged the LSB with co-ordinating and overseeing progress. This year it has published research on quality indicators and also the outcome of work with its public panel on choosing lawyers.

Despite “some positive market developments and new regulatory arrangements since 2016”, the LSB said it was “clear that further action is needed from the regulators to deliver real change in outcomes for consumers”.

The statement – which is now subject to consultation – will ramp up the pressure on the regulators once finalised.

Given the diversity of the legal services market, both in terms of providers and the needs of consumers, the LSB described its wording as “high level” and based on “general expectations, principles and specific expectations” to provide a “flexible framework” for regulators.

However, the statement will be issued under section 49 of the Legal Services Act and the LSB must have regard to it when considering applications from regulators for rule changes and also assessing their performance.

“We acknowledge that several regulators have already put in place regulatory arrangements to improve transparency of price, service and quality information.

“It is apparent, however, that compliance with these existing arrangements is deficient in some areas, or that providers are meeting the letter, rather than the spirit, of the requirements.

“We therefore propose to set a general expectation that regulators should tighten up on compliance with their regulatory arrangements and we will hold them to account in doing this.”

On the issue of quality, the draft statement requires regulators to have to regard to “quantitative data on a provider’s performance” – such as complaints data, success rates and error rates – along with customer feedback, ratings and reviews”.

The statement said regulators were expected to ensure that information was available in “at least one single location online”, pushing the case for centralised digital registers.

This should include contact details, descriptions of services and indemnity insurance information, together with disciplinary records, sanctions and decisions published by the Legal Ombudsman.

On price transparency, the statement said regulators were expected to produce “useful information” to enable effective consumer choice, including information about ranges of costs for different stages of cases and disbursements.

Regulators will also expected to put in place an “effective programme of activity” to increase understanding of a citizen’s legal rights and duties, and make “meaningful contributions to cross-sector initiatives, such as Legal Choices”, the regulators’ joint consumer-facing information website.

This will put more pressure on the Bar Standards Board, which decided to cease funding Legal Choices in 2019.

The LSB has previously hinted that regulators could be forced to fund the site.

LSB chair Helen Phillips said: “For too long, too many people and small businesses who need legal support have been unable to navigate the legal services market and get the help they need.

“We want to work with the regulators to build on the progress made so far and make it easier for consumers to make informed and effective choices when choosing a legal services provider.”

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