… as consumer panel calls on LSB to regulate probate and estate administration services

Davies: vital to introduce a mechanism to ensure that professional advisors handle things properly

Probate and estate administration services should become reserved legal activities, the Legal Services Consumer Panel (LSCP) has recommended.

The panel, which last year said , said the main reasons are the risk of fraud and the “potential severity of financial and emotional harm” that consumers can suffer as a result of overcharging and poor service.

In its submission to the Legal Services Board’s call for evidence on the issue, the LSCP said the main benefits of regulation would be opening up avenues of redress, through the Legal Ombudsman for poor service and through financial protection arrangements in cases of fraud.

The LSB’s current investigation into whether to make will-writing, probate and estate administration reserved activities was sparked by the panel’s investigation into will-writing last year.

The LSCP, which drew on several evidence sources – including the LSB’s newly released YouGov survey – actually found the case for reserving probate to be weak, but for reasons of consumer confusion and overlap with the other two areas said it too should be regulated.

Elisabeth Davies, chairwoman of the consumer panel, said: “Dealing with someone’s finances after their death is an important responsibility and takes place at a time when loved ones are grieving. It’s vital to introduce a mechanism to ensure that professional advisors handle things properly, progress the paperwork speedily and charge a fair price for the work.

“Although most people are happy with the service they get, all too often estates end up taking many months or even years to finalise, and costs spiral out of control. Beneficiaries are in a poor bargaining position, often feeling powerless to prevent these problems, especially when lawyers are named as executors in the will. The important safeguard of allowing complaints to the Legal Ombudsman would compensate consumers suffering poor service and also deter malpractice.”

The panel identified six groups of problems: fraudulent activity linked to the administration of the estate; service issues, and particularly delay and poor communication; excessive, escalating or unclear costs; poor sales practices – “there was less evidence of poor sales practice than in our will-writing report, although consumers could be more vulnerable to being taken in by bad deals when they are grieving”; quality issues, with anecdotal evidence that one-third of probate applications are rejected mostly due to sloppiness; and consumer confusion as most clients assume the work is regulated.

The panel said there is no justification to create a monopoly for solicitors or other existing authorised persons if the work is reserved. “Any business wishing to offer probate and estate administration services should be able to do so as long as they can satisfy the regulatory requirements.”

The regime should reflect the risks to consumers, it continued. “For example, it is not necessary to set entry requirements based around technical competence due to the administrative nature of the work, which is commonly done successfully by lay persons.

“However, based on the risk of fraud, it is sensible to authorise firms and carry out appropriate checks, such as for criminal records and bankruptcy. In addition, it may be appropriate to require businesses to nominate a head of legal practice and head of finance and administration.”

Among other issues it said should be explored are the rules on professional executors renouncing their appointments, and further steps to simplify the probate application process “and thus make getting professional help less necessary”.



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