Are your publicised charges transparent?
Contained within the Solicitors Code of Conduct are specific rules and regulations as to how the Solicitors Regulation Authority (SRA) allow solicitors to publicise their charges to clients. For example, Outcome 8.2 of the Code states that publicity relating to your firms charges must be clearly expressed, and must state whether disbursements and VAT are included in the quoted amount. The Law Society have consequently updated the practice note giving advice on how to publicise transparent charges to avoid breaching any such rule.
The Law Society advise that the practice note should be ‘read by all solicitors who publicise their charges’ and that ‘it is particularly relevant for solicitors carrying out conveyancing work’.
The SRA take the view that solicitors must not mislead prospective clients through ‘headline’ prices which fail to fully represent the full charge for their service. For example, cost information should not be misleading through later additional charges, or where items are described as disbursements when they are not.
The Law Society stress that headline prices should be presented in a way which enables full cost information and charges breakdowns where appropriate. A failure to provide the appropriate level of detail in charges could lead to a failure to treat your client fairly, which would breach Outcome 1.1 of the SRA Code.
The practice note provides specific information on all the various costs which should be defined with clear and accurate information. This includes:
- Fixed and estimated charges
- Free, discounted and pro bono work
- VAT and disbursements
- Referral fees
It is hard to imagine many firms operating the unwholesome practice of advertising a low headline price at the outset, but putting forward a higher charge after the service. The practice note, however, is strained towards conveyancers who trade in such a competitive market, with ever increasing pricing competition, that costs are often not wholly transparent.
As a result, The Law Society believe that solicitors and conveyancers should be weary of trying to entangle more prospective clients by quoting a lower figure than the one they charge.
The practice note appears to have been updated specifically with the amendment on how the cost of new online conveyancing portal, Veyo, can be passed onto the client. The Law Society appears to be taking the eye-opening stance that Veyo should not be charged as a disbursement but as an administration charge:
“SRA’s advice is that your firm’s overheads should not be described as disbursements in your advertisements (IB 8.8). These elements should not be included as additional charges that are passed on to your clients. Examples include:
- Annual subscription costs and transaction fees for using online solutions to manage business processes, for example Veyo, the online conveyancing portal. This would not preclude such costs being passed on to clients, for example through an administration charge (as opposed to as a disbursement)”
Practice notes are not legal advice issued by The Law Society and are not intended as the only standard of good practice a solicitor can follow. The Practice Note does, however, represent The Law Society’s view of acceptable practice for publicising solicitors’ charges, and accordingly it’s a recommended read for any solicitor or conveyancer.