Legal services providers should be required to publish information about price to help consumers navigate their way through the market, the Competition and Markets Authority (CMA) says today. The authority's long-awaited final report on the legal services market says people struggle to make informed choices because of a lack of transparency about price, service and quality.
Following a year-long study, the CMA concludes that the legal services sector is not working well for individual consumers and small businesses.
Extra disclosure, along with making available data held by regulators, would help the development of comparison sites and other intermediaries to allow customers to compare providers in one place, says the watchdog.
'Regulators should set a new minimum standard for disclosures on price and the service provided, and develop and disseminate best practice guidance,' the report adds. 'This should include a requirement for providers to publish relevant information about the prices consumers are likely to pay for legal services.'
The CMA also wants an enhanced 'consumer education hub' that will overhaul the existing Legal Choices website.
The competition watchdog also says the Ministry of Justice should look into extending the ombudsman scheme to customers of 'unauthorised providers'.
According to the report, clients are generally unaware of the regulatory status of their legal services provider and the implications of that provider for consumer protection.
The authority recommends that the MoJ reviews the regulatory framework (which the ministry has already pledged to do), under which representative bodies and regulators are effectively independent but not wholly discrete. The report concludes that the current system is 'not a major barrier to competition' but may not be sustainable in the long term.
It states that title-based regulation is 'insufficiently flexible' to apply proportionate, risk-based regulation and considers that regulators should be independent from government and representative bodies.
The CMA backs SRA plans to remove regulatory restrictions to allow solicitors to practise in unauthorised firms. The report concludes that solicitors and other professionals should be less tightly regulated than they currently are for lower risk activities, reducing the costs of regulation and encouraging different approaches and business models.
Rachel Merelie (pictured), acting executive director for markets and mergers, said: ‘You might not need a lawyer very often but when you do it will often be at a crucial point in your life – whether that’s buying a property, resolving a dispute or getting expert advice on financial and employment matters. So the transparency, affordability and accessibility shortcomings we have identified are a real concern.
‘Consumers who are equipped with the information they need to assess the services on offer and choose the best deal for them, will not just benefit personally but will also help drive competition, quality and innovation across the whole market. That means a better outcome for everyone and, importantly, fewer people will be discouraged from seeking the help they need.’
All the reaction can be read here.
CMA report: firms must publish price information
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