Improvements Are Happening In The Legal Sector

The Legal Services Consumer Panel has recommended that there are more use of fixed-fees and an increase in the Solicitor Regulation Authority’s fining powers as well as a comparison style website giving customers an indication of service each firm provides.

These recommendations have come on the back of the Competition and Markets Authority’s (CMA) 2016 report calling for improved competition in the legal market.

The CMA report and the panel’s findings both agreed that there was an increase in the availability and take-up of fixed-fee arrangements.

This the panel has partly attributed to the fall in legal aid. This, the Panel has said:

“[It is] even more important that consumers can plan and predict in advance the cost of procuring services.”

It continued:

“Fixed-fees facilitate this. Therefore, we urge regulators to promote and encourage fixed-fee arrangements where appropriate.”

With regards to the SRA, there has always seemed to be a difference between the powers it has to fine traditional law firms and those working for them without the need to refer to a disciplinary tribunal, and those who work for alternative business structures.

The fines vary greatly in size, with a £2,000 cap for traditional firms. This is a far cry from the £250m for a firm and £50m for an individual who are working in an alternative business structure.

The report said the panel was concerned that the former power was “inadequate for effective deterrence”.

According to the report, the only way to alter fining powers over £10,000, is to change primary legislation. It then urged the Legal Services Board (LSB) to “support the SRA’s resolve to increase its fining powers.”

Sarah Chamber, Panel Chair said the 2014 report outlined the “pleasing progress” that had been made on choice and perceptions of value for money in legal services.

“But we expressed concern that regulators had not embedded consumer vulnerability in their work, that too few dissatisfied customers were seeking redress, and that there was an unacceptable absence of quality indicators.

“It is dispiriting that, despite repeated pleas from us to make progress in these areas, and a lengthy and evidence-rich report from the CMA in 2016 making similar points, we find ourselves having to repeat the same messages.”

She touched upon the fact that people were indeed shopping around a little more often which is “some progress”, however more can be done.

Sarah Chambers added:

“We are still very concerned about the lack of quality indicators, that vulnerable consumers on low incomes are having even more difficulty accessing legal services, and that over a third of dissatisfied customers are still choosing not to seek redress”.

There have been some improvements regarding quality indicators, and these started to pick up the pace as the imminent return of the CMA was becoming more apparent.

Sarah Chambers commented:

“They are also talking more about how to address the issues of vulnerability, particularly in view of the problems caused by the reductions in legal aid and other free sources of advice. Innovations using digital legal services have the potential to help in this as in other areas.”

It’s clear that more steps can be taken to ensure the legal sector becomes more transparent and provides consumers with lots of information to help them make an informed decision about who they’d like to represent them.

There is certainly more to come, so watch this space.

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