The Law Society responded to the Competition and Markets Authority's report this morning by stressing that the drive for deregulation must not undermine consumer protection.
President Robert Bourns welcomed the competition watchdog’s decision not to conduct a full market investigation into the legal sector.
But he added: ’It is astonishing that some of the CMA’s recommendations prioritise deregulation over consumer protection. If solicitors were to offer legal services from unregulated companies, as suggested by the CMA, then their clients would no longer enjoy a raft of protections - from confidentiality to compensation - offered by every solicitor in a solicitor firm. These deregulatory changes would undermine consumer protections and erode trust in the legal system.’
When surveyed by the Law Society in 2016, said Bourns, 77% of consumers said the businesses in which solicitors work should be regulated; and 97% said advice from a solicitor should be confidential and not disclosable to third parties.
’The Society has a responsibility to make sure that the legal sector works in the best interests of each one of us - regardless of wealth, ethnicity or gender,’ he added. 'Our concerns are wider than the CMA’s.’
The Society also cited this year’s Lexis Nexis Bellwether report, which found that clients’ two highest priorities are that their lawyer has a clear understanding of their needs and that they are efficient. Research from YouGov has shown that reputation is the most important factor in choosing a legal services provider.
On publishing more information, Bourns said helping clients make informed choices about what best meets their needs is at the heart of every solicitor’s practice.
'We work constantly with the profession to provide ever more useful and accessible information about the many services they offer,’ he said, alluding to the ’transparency toolkit’ published by Chancery Lane this month. ’Regulation can be a blunt instrument. Where possible - particularly in a market like legal services with many different types of providers, clients and services - solutions driven by consumer demand are more flexible and less costly than regulation. Public education in identifying legal problems, which the Society promotes, also plays a significant role in empowering people to make the right choices.’
On the CMA’s recommendation for another review of regulation (already pledged by the government) the Society reiterated its opposition. Said Bourns: ’As the UK faces one of the biggest constitutional challenges in living memory, uncertainty for business should be reduced, not increased. For this reason we believe it would be unwise to review regulation of the legal sector at this time, nor is there demand from consumers or the profession for such reforms.
’English law is one of our greatest exports and underpins the domestic economy. It is crucial that we maintain confidence in all our markets - in particular the legal market - to provide the firmest possible foundation for Brexit negotiations.’
Oversight regulator the Legal Services Board, which has called for a single legal services regulator (and its own abolition), was predictably more enthusiastic. Chairman Sir Michael Pitt said: 'The legal services sector is not working well enough for consumers and small businesses and the current regulatory framework is unsustainable in the long run. The dual focus on market transparency and structural reform is essential. In particular we are pleased that there are recommendations to the Ministry of Justice for action on regulatory independence and the need for wider reform of the Legal Services Act. These are central elements of our own vision for the future.’
Though the report states that the current regulatory framework is not a major barrier to competition, the Solicitors Regulation Authority claimed it will add impetus to its own reform programme - which includes allowing solicitors to practise in unregulated businesses - and bolster its vigorous lobbying campaign for full separation from the Law Society. Chief executive Paul Philip said: ’I am pleased that the CMA has strongly endorsed our reform proposals, which will help to tackle unmet need and support members of the public and small businesses to access legal services.
’The report makes a good case for regulation that is independent of both representation and government, echoing the SRA view that independent regulation is key for public confidence and will help increase public trust in the sector.’
Profession reacts: 'Astonishing' that CMA downgrades consumer protection - Law Society
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