Chambers: ICAEW ignoring letter and spirit of the CMA’s report
The Legal Services Consumer Panel has strongly criticised the “insufficient” plans of the second largest probate regulator to introduce new requirements on publishing prices.
The Institute of Chartered Accountants in England and Wales (ICAEW) issued a consultation in July [1] that said it would not force its firms providing probate services to publish their fees – unlike the other legal regulators.
It regulates 280 probate practices and many individual accountants who handle probate work, and said the voluntary approach to improving price transparency was “proportionate to the size and composition” of the firms involved.
In the panel’s response to the consultation, chair Sarah Chambers said: “The panel has considered the ICAEW’s plans and finds them insufficient. The proposals are out of step with comparable regulators, specifically those regulating probate services.
“It is equally concerning that these proposals do not give effect to the letter or spirit of the CMA’s [Competition and Market Authority] recommendations. The proposals are also out of touch with the reality and needs of consumers of probate services.”
Research showed that only 27% of consumers shopped around for legal services, and it was just 16% for probate services: “This suggests that there is even more of a need for targeted action… for regulators of probate services.”
That probate was the third most-used legal service by consumers “bolsters the argument for ensuring that these sectors operate as efficiently as possible, and in consumers’ interest”.
Ms Chambers said: “Against the backdrop of all the evidence noted above, it is therefore disappointing that ICAEW, the second largest regulator of probate providers in England and Wales, is proposing to rely on guidance in place of mandatory rules to address the chronic lack of information hindering effective competition.
“We do not believe that this approach aligns with the letter and spirit of the CMA’s recommendation which calls on regulators to ‘require providers to publish information on price, services, redress and regulatory status’.
“Guidance has little legal or regulatory weight in comparison to rules. The widespread absence of price transparency, and the continuing handicap this poses to the demand side and competition, warrant robust regulatory intervention. Without direct intervention, providers will not be incentivised to take action.”
She also complained that the ICAEW had not addressed the need for quality measures sufficiently.
“There is no real information around developing or publishing quality proxies, even though the CMA and the Panel both highlighted the need for quality information to sit alongside pricing information,” she said.
Ms Chambers said it was also “difficult to be reassured” by the ICAEW saying that it would conduct a review after 12 months, and that if it found insufficient voluntary compliance, it would then give ‘serious consideration’ to making the requirements compulsory.