According to Legal Futures, The Solicitors Regulation Authority (SRA) received complaints in 2008 about the way some conveyancing law firms were advertising their prices. Which has ultimately led to new practice guidance on the advertising of conveyancing and pricing.
If you are represented by the Law Society and regulated by the SRA are you compliant with the new practice note? It covers off issues like sundry costs, postage and charging for professional indemnitiy insurance contributions.
Apparently the SRA wrote to 15 conveyancing firms at the time to complain about their use of “headline prices”, which the SRA said contravened the requirement in rule 7.02 of the Code of Conduct. Potentially misleading cost information may arise where an attractive rate is advertised to consumers, without making it clear that additional charges may be later “bolted on”. The SRA also suspected that some firms were referring to items as disbursements when they are not.
The Code of Conduct says that prices should be clearly expressed and in particular should be clear whether disbursements and VAT are included.
Research done by Legal Futures, the website of Neil Rose, has found that in 2008 some of the firms complained to the Law Society saying that the SRA was disproportionate in its interpretation of the rule.
The firms argued that consumers were used to headline prices in other sectors and that restricting their use would give licensed conveyancers a commercial advantage. This in turn led to an online survey by The Law Socieity and also questions in the annual law firm omnibus survey to better understand solicitors’ view on the subject. The finding was that the majority of solicitors neither used nor supported the use of headline prices for conveyancing services. It was also found that a small minority of respondents advertise their costs excluding all disbursements and a larger minority exclude non-standard disbursements. However over half of respondents thought advertising excluding all disbursements would contravene rule 7 and 21% of online respondents said quoting costs exclusive of non-standard disbursements only would contravene rule 7. In conclusion, most solicitors said the SRA should clarify the advertising requirements under rule 7.
According to Legal Futures, this has led the Law Society to issue guidance last week on “headline pricing”. The society’s practice note — which is targeted at conveyancers in particular — was issued because “some solicitors are unclear as to what must be included in headline prices”. The report considered by Law Society’s rules and ethics committee expressed the view that the findings did not support lobbying the SRA to change its interpretation of 7.02, and that advertising prices exclusive of any disbursements is contrary to 7.02. This is not reflected in the practice note. The committee suggested that the SRA consider reviewing its guidance and that work begin on the practice note, including a clear explanation of what constituted a disbursement. Instead, the SRA provided examples of conduct which would not comply with rule 7, which have informed the practice note.
Irrespective of the backgroud issues most conveyancers operate within the remit caught by Law Society Practice Notes and they should consider the practice note which can be read here
Looking quickly at a number of solicitors on line quote engines many firms, large and small appear to fail to comply and it can only be time before consumer media sources query the lack of transparency on pricing.