The Legal Services Board (LSB) has said it expects frontline regulators to introduce compulsory “minimum disclosures” by law firms on price, service, redress and regulatory status.
In its response to the Competition and Market Authority (CMA) market study of legal services, the LSB agreed with the CMA that “the market cannot be expected to mend itself” without regulatory action.
The LSB said action was needed to deliver a “step change in standards of transparency” by law firms to help consumers understand the price and service they receive.
We reported last month that the regulators are considering pilots of how greater transparency could work.
The oversight regulator said another “high-level outcome” it would pursue would be helping to create a “dynamic intermediary market”, by ensuring that information was freely available to comparison websites and others.
The use of “independent feedback platforms” would be promoted to help consumers find out more about the quality of service being provided, as well as better information for consumers at the start of the process, when they were identifying their legal needs and the different types of providers.
The LSB also said it expected the frontline regulators to work together to “explore the feasibility of a single digital register” for all lawyers.
Evidence that the legal services market was moving in the right direction would include surveys showing more shopping around by consumers, that more law firms were publishing their prices and that there were fewer complaints to the Legal Ombudsman about lack of transparency.
The oversight regulator said its “default approach” was to prefer outcomes-focused approaches, but “a level of prescription may be required for sound regulatory reasons”, such as to prevent “gaming” by providers or to promote consistency.
“Again, this issue is most likely to be a consideration in relation to minimum disclosures by providers at the pre-engagement stage.”
The LSB said the frontline regulators had agreed to “work towards” the publication of action plans by the CMA’s June 30 deadline.
“We will not be seeking to second-guess policy decisions made by individual regulators, but will instead focus on how decisions were arrived at and the reasoning and evidence used.”
On the basis that action plans were published by 30 June, the LSB said assessments of their sufficiency would follow over the summer.
Neil Buckley, chief executive of the LSB, said the CMA study was the result of “long-standing concerns” about the legal services market in England and Wales.
“The LSB has long been clear that there is a need to increase competition in the market and a major part of achieving this will be to ensure there is better information available for consumers in relation to price, quality, redress and regulation. The conclusions reached by the CMA are in line with the LSB’s own.”
Mr Buckely said the oversight regulator was encouraged by the “collective goodwill and early progress” made by the regulators since the CMA report was published in December.
It emerged in January that the Solicitors Regulation Authority (SRA) had started work on plans to require law firms to publish fees for services such as divorce, wills or conveyancing, and intends to launch a consultation on the new rules this summer.