LSB eyes legal expenses insurance expansion and “approved” products

Phillips: Collaboration is key

A future where most households have a legal expenses insurance policy to access a wide range of legal services, and there are approved ‘simple legal products’ in the market, has been sketched out by the Legal Services Board (LSB).

However, it suggested putting its mooted review of the reserved legal activities on hold.

Informed by its recent review of the first 10 years of the Legal Services Act reforms, he LSB has issued a consultation on a draft 10-year strategy for the legal sector, with a particular focus on the role of regulation, as well as its draft 2021/22 business plan.

The strategy identified reshaping legal services to better meet the needs of society as “the golden thread” running through its strategy for the sector, with three overall goals of achieving fairer outcomes, stronger confidence and better services.

The oversight regulator said the types of outcomes it would expect to see in 10 years’ time included “greatly reduced” unmet legal need, a strong publicly funded safety net reinforced by a strong third sector and sustainable provider base, and legal expenses insurance policies or other mechanisms enabling households to access a wide range legal services free at the point of need.

The LSB envisaged simplified law and citizens using alternatives to court-based mechanisms to resolve disputes as the norm, as well as it being easy to compare the cost and quality of different legal services providers, with legal services routinely delivered using trusted technology which enables consumers to have more choice in how they access legal services.

These goals sat alongside broader aims such as healthy competition and a culture of innovation across the market, and legal professional being as diverse as the communities they serve.

The idea of ‘simple legal products’, drawing on the principles behind ‘simple financial products’ developed by the Sargeant review 10 years ago, came out of concern that while consumers use lawyers for the most serious issues they face, “the sector too often fails to meet their low-value, basic legal needs”.

The LSB explained: “The essence of idea is to develop a small range of easy to understand and easy to compare standardised products that would meet people’s basic needs. These would ‘do what they say on the tin’.

“The starting point would be to define the features of each product (such as a simple will or uncontested divorce). Providers would be able to market these services with a ‘simple legal products’ badge.

“In return, they could be asked to commit to certain conditions, like offering fixed fees and listing these services on digital comparison tools.

“These products would not meet everyone’s needs, but they could meet the needs of many consumers underserved by the market.”

Exploring the potential of both legal expenses insurance and simple legal products were among the new areas of work the LSB plans to embark on next year.

It is also looking to make the case for a legal support strategy for small businesses, informed by research, and developing a strategic approach to understanding vulnerability among clients and better measurement of outcomes.

Other ambitions of note included encouraging law firms to allow consumers to pay by instalments or use credit, and that the market – rather than commercial providers – should develop comparison tools. “In the absence of this, it may be necessary for regulators to support consumers directly.”

Though earlier this year the LSB identified changes to the list of reserved activities that only authorised lawyers can do as one way legal regulation could be flexed to help the profession recover from the Covid-19 crisis, the business plan said it was not minded to embark on a statutory review of them yet.

“Our initial view is that now is not the right time for such a review, but that there is value in mapping what is happening in the unregulated sector and considering the implications of technological change for the scope of regulation.”

It does, however, plan to explore use of the LSB’s ‘voluntary arrangements’ powers under the Legal Services Act 2007, which could include giving advice on best regulatory practice, or the contents of codes of practice – subject to the Ministry of Justice taking forward its idea of creating a register of unregulated providers of legal services and giving their clients access to redress if things go wrong.

The LSB added that a statutory review of the reserved legal activities would require extra funding. As it is, the LSB has proposed a 4.4% increase (or £175,000) in its budget for 2021/22 to £4.1m.

This equates to approximately £1 on practising certificate fees per authorised person across the regulated legal professions. “Adjusting for inflation, this will bring us in line with our budget in 2017-18 and remains considerably lower than when we were established.”

LSB chair Dr Helen Phillips said collaboration across the sector was required: “By collaborating, we can ensure that citizens who need legal help can easily compare services and choose a provider that meets their needs and suits their budget.

“We can create a more diverse legal services sector that is trusted by everyone and build a market that supports innovation and commands public confidence. Together, we can reshape legal services to better meet the needs of society.”

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