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Use of fixed fees continues to rise but consumers still struggling to choose lawyer, survey finds

Davies: Regulators should be doing more to better equip consumers [1]

Davies: Regulators should be doing more to better equip consumers

Nearly half of consumer legal services are provided on a fixed-fee basis, new research has found – but it said consumers are still being hampered by a lack of information to help them choose the right lawyer.

The sixth annual tracker survey undertaken by the Legal Services Consumer Panel said there was “a clear gap between those consumers who are confident and knowledgeable and those who are not, with the consequences being lower levels of satisfaction and trust in legal services”.

It said that over the six years of the survey, carried out by YouGov, consumers had started shopping around for their services more, but the overall figure – one in four – remained small.

Reputation persisted as the most important factor when choosing a legal service provider, for areas such as conveyancing, price was just as important. Specialism, convenience and speed of delivery were the other three main choice factors.

In the first survey in 2011, around 38% of transactions were done on a fixed fee, a figure that has now grown to 48% – just 7% of consumers paid on an hourly rate. Recent Legal Services Board research, however, found that only 17% of providers actually publish their prices.

Some 5% were charged on a percentage-based fee and 11% a combination of charging methods.

With 17% paying nothing, the use of free services continued on a downward trend that the panel described as “worrying… particularly given that these are more frequently used by BME groups than those from a white background. They are also more frequently relied upon by younger users”.

The survey found that two-third of consumers surveyed paid themselves, up from 56% five years ago.

Trust in lawyers has declined over the years of the survey, from 47% to 42%, putting them on or near a par with accountants, shop assistants and ‘ordinary’ people, and way behind doctors and teachers. Those who had used lawyers before were more likely to trust them than those who had not.

The survey added: “There is a persistent trend of lower levels of confidence among BME groups, with only 37% trusting lawyers to tell the truth against 47% of white British. This figure drops further still with Indian (29%) and Black African (30%) having the lowest levels of trust within the BME group.”

Overall satisfaction with service remained high at 80% – although it tended to be higher where a service was delivered face to face, while value for money continued to lag behind at 61%. Satisfaction with the outcome has remained consistently high, this year at 85%.

The survey found there were gaps between the two – in conveyancing, for example, 91% of people were satisfied with the outcome, but 77% with the sevice.

Consumer panel chair Elisabeth Davies said: “Over the last six years we’ve seen some positive improvements, but we are at a stage now where we should all expect more. Regulators should be doing more to better equip consumers with the information they need about costs and quality to make informed choices.

“In what other market would we expect consumers to make a purchasing decision with such limited information on how much it will cost them?

“The recent CMA report [2] highlighted the negative impact of opaque pricing structures and costs across the market and the need to be able to demonstrate quality before purchase. Now is the time for all the approved regulators to take stock of what they can do to improve this situation and to commit to taking action. In the absence of effective information we’re not going to have effective competition.”

The panel has recently renewed its call [3] for regulators to force providers to publish average prices.

Meanwhile, the Legal Services Board has begun recruiting a replacement for Ms Davies, who is stepping down from the panel later this year.

She was an inaugural member of the panel from 2009 and became interim chair in August 2011, before being confirmed as permanent chair a year later. Her current term of office expires on 31 March 2017, and her departure date will depend on the start date and availability of the new chair.

The chair is paid an annual fee of £15,000 for at least 30 days work per year. Members are paid an annual fee of £3,380 for at least 13 days work per year.

Board chairman Sir Mike Pitt said: “Elisabeth’s drive and determination has seen the panel go from strength to strength, with its evidence-based philosophy enhancing its credibility with a wide range of stakeholders.

“I am delighted that Elisabeth will be continuing to make a positive contribution to public life with her new role on the board of the Parliamentary and Health Service Ombudsman.”