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Small Firms Division

Price and service transparency - SRA consults

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In late September, the SRA opened its three month consultation on improving the availability of information for consumers. Michael Lonergan, policy adviser, gives an overview of the consultation and encourages members to share their views on it.

27 September was a big day in regulatory developments. That morning the Solicitors Regulation Authority (SRA) released two major consultations that could particularly impact on smaller firms - one on the second phase of its handbook reforms, and another on its price and service transparency reforms, the subject of this article.

The consultation is formally called Looking to the Future: better information, more choice. The Law Society will be responding to the consultation on behalf of members, and we are keen to hear any views on the proposals so that we can develop a truly representative response.

Firms to publish more information

The SRA’s main focus is on firms publishing more information on websites. The SRA’s view is that consumers need to understand the cost of a service before they engage with a firm, so they can easily shop around and compare providers. The SRA also believes that the lack of upfront price information may be a barrier to consumers engaging in the legal services market.

The Law Society doesn’t agree with the SRA’s views. We know that solicitors understand their clients’ needs best, and do a lot of work to ensure clients get the right information at the right time. The Law Society works to help solicitors improve the way they provide client information, so regulation is unnecessary and may in fact be detrimental.

Price and service information

The SRA proposes that firms be required to publish price and service information on their websites, in three to four areas of law for individual consumers, and two for small business customers. The areas of law would be selected from the list below:

individual consumersSmall business customers

Residential conveyancing (sale, purchase, and remortgage)

Employment tribunal

Undefended divorce and financial disputes arising out of divorce

Debt recovery

Drafting of a will

Licensing applications in relation to business premises

Probate/Estate administration

 

Drafting of a lasting Power of Attorney

 

Motoring offences

 

Employment tribunal

 

Personal injury claimant

 

For each area of law, firms would have to publish price information in line with a set of price transparency principles.  For example:

  • the total costs should be shown where practicable;
  • where overall costs aren’t known, any known costs should be displayed such as hourly rates or fixed fees for certain elements;
  • if hourly rates are displayed, then average costs should be quoted.

 For the same areas of law, the SRA would also require firms to publish service information, such as a description of the services offered, indicative timescales, and the staff delivering the services.

We know that publishing price and service information before a solicitor has even talked with a client can be difficult, and may not even be meaningful for consumers whose needs are all different. The proposals may be particularly challenging for smaller firms, who cannot “commoditise” their services as easily as larger firms to provide average prices and absorb cost overruns.

We’re keen to hear views on these issues to help us to develop a response on behalf of members.

Regulatory status and protections

Firms will also have to show on their website that they are regulated by the SRA, by using a digital badge that links to the new digital register (see below). Firms would also have to publish how to make a complaint and details of their PII cover.

The SRA to publish more information

The SRA also plans to open up access to its own data in two ways.

The first is through a digital register, which collates in one place the firm and solicitor information currently spread across different SRA registers, such as basic regulatory information and enforcement actions.

The second is by the SRA publishing complaints information separately from the register about individual firms.

The SRA thinks that publishing this information will help consumers to better understand solicitors, and encourage the growth of price comparison websites in the legal sector.

Solicitors in unregulated entities to provide information

The final area is unregulated firms. The SRA proposes that solicitors in such firms be required to inform clients that they do not have the same requirements to hold PII, and that the client cannot make a claim on the Compensation Fund.

We know our members work every day to provide their clients with the best quality information. This good work means regulation is not needed to ensure consumers get the right information - it’s already happening. We therefore don’t think the proposals will result in the changes to consumers’ behaviour the SRA is looking for, and can see a number of challenges and risks for smaller firms. For example, there is a risk that complaints information damages the reputation of smaller firms more than larger firms.

We encourage you all to read the consultation and share your views as we develop a response on behalf of all members.

If you’d like to share your views or have any questions, get in touch at Michael.Lonergan@lawsociety.org.uk

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About the Small firms Division

Your Small Firms Division is dedicated to meeting the needs of all smaller legal businesses, including sole practitioners.

See our 2016/17 Engagement Programme