Last week the SRA announced it would proceed with controversial proposals to require firms to publish pricing information on their websites. Michael Lonergan, policy adviser, provides a summary of the changes as they affect small firms and what the Law Society plans to do to help members adapt to the changes.
How did we get here?
The Competition and Markets Authority (CMA) in 2016 recommended the SRA and other legal front-line regulators to improve the information for individual and small business clients in the legal services market. Last year the SRA consulted on proposals to deliver on this. The intention behind these changes is to help clients understand the legal services available, and their prices, without the need to formally consult a firm. The CMA argues that this would help clients to shop around, compare providers, and drive lower prices in the legal services market.
The Law Society responded strongly against these proposals. We commissioned consumer behaviour research - the first of its kind in the legal sector - to show that simply putting information on websites might do little to actually help consumers, and could be misleading. And therefore this would burden members with additional regulation to little end. Over 80 others responded, with overwhelming opposition to the changes.
On 14 June the SRA announced that it had decided to proceed with most of its proposals, with some small but significant moderations in response to our concerns and other respondents. On the same day the SRA also announced its decisions on reforming the SRA Handbook, covered by my colleague here.
Price and service information
The single biggest change is the new requirement for law firms to publish price and service information on their websites for clients in certain areas of law. Where a firm doesn’t have a website, it must make the information available on request.
|Individual customers||Business customers|
|Residential conveyancing||Debt recovery up to £100,000|
|Employment tribunal claims for unfair or wrongful dismissal||Employment tribunal claims for unfair or wrongful dismissal|
|Immigration (excluding asylum)||Licensing applications for business premises|
|Probate (where property and assets are within the UK and uncontested)|
|Motoring offences (summary only and dealt with at a single hearing)|
The SRA decided not to proceed with transparency rules for will writing, family law, and personal injury services, but will issue guidance on the latter two areas to get firms to be more transparent.
This information must include things such as:
- The total cost, or if not practicable, the average or range of costs
- The basis for charges - e.g. hourly rates or fixed fees
- The experience and qualifications of those carrying out the work, and those supervising
Challenging yes, but keep this in mind …
While this will pose a challenge for small firms in particular, there are a few points to note here:
- The SRA is clear that its changes are focused on transparency of prices, and not forcing adoption of certain pricing models like fixed fees. Quote: ‘our rules will not stipulate which type of pricing or charging model firms should use.’
- The SRA has also stated that the changes are ‘broad enough to provide firms with flexibility in how they publish their prices, whilst being clear enough to make sure consumers get a good upfront indication of the cost’ [emphasis added].
- Also ‘our rules will allow firms who do not know the total cost of a service to provide the information they do know, for example the average or range of costs’
- The rules will ‘nable firms to provide prices based on a standard case and make it clear what additional services would incur additional fees’.
Firms must abide by the existing obligation to give clients the best possible information on costs, however the SRA seems to indicate the approach it will take on the issues will be flexible.
How to complain
All firms, regardless of client or area of law, will also need to provide information about their complaints procedure, including how to make a complaint to the Legal Ombudsman and to the SRA.
New digital badge
Firms will also need to display a new digital ‘regulated by the SRA’ badge on their websites. This badge will allow clients to validate if a firm is authentic. Clicking the badge will take a user to the SRA webpage spelling out the client protections you get when using a regulated law firm. The original proposal was that firms publish all of this information - e.g. level of PII cover, Compensation Fund access - so this is a small improvement.
All changes set out above are intended to come into force in December.
Digital register - during 2019
The SRA will also create a new digital register of firms and individual solicitors. This is intended to help clients and other solicitors validate who they are dealing with. This will bring together information currently spread across different registers, and entries will include information on disciplinary or enforcement action, conditions on a PC or authorisation, areas of practice and date of authorisation.
No publishing of complaints data
In response to our concerns the SRA has decided not to publish complaints data on individual firms, as it originally proposed. It said that publishing complaints data without meaningful context could be of little use or misleading and could affect smaller firms’ reputations among clients. This is a welcome change.
What happens next?
The announced changes will require firms to make significant changes to the way they operate and promote themselves to clients. We know these will provide challenges, particularly for small firms.
We’re planning to offer a range of resources for members to help with compliance with these new untested measures. We will develop guidance, for example a Practice Note, and look at further ways we can help. We will continue to engage with the SRA on the implementation details. Keep an eye out in the coming weeks for a more detailed assessment of the changes in the form of a members briefing, and a webinar running in mid-July.