Prices: Asymmeteries of information
Rule changes which would mean that law firms regulated by CILEx Regulation Ltd (CRL) would be the first required to publish price and service information for all legal services have been put to the Legal Services Board (LSB).
Firms would also have to link their websites to that of the Legal Ombudsman (LeO), to give consumers easier access to its decisions.
The application to the LSB said the changes would “help address asymmetries of information between firms and the public” and help people make “better informed choices about legal services”.
They would lead to “better and increased publication” of transparency information, including about price.
“These changes will hopefully improve the issue that legal services are seen as unaffordable by both consumers and small businesses [defined as having up to 10 employees and a net turnover of less than £1m] and lead to more consumers feeling able to access legal services.”
The requirement to link to LeO’s website would “enhance the awareness of the additional benefits and protections that these services, and CRL firms, can provide to the consumer”.
As we reported in June, the move could be a precursor to similar action taken by the other legal regulators as they look to comply with LSB requirements to improve transparency.
CRL currently regulates 61 law firms, of which 21 are CILEX authorised entities. Of these 12 do not need to publish any transparency information because of the nature of the work they provide.
The remaining 40 are CILEX-ACCA probate entities – CRL took over regulation of these firms from the Association of Chartered Certified Accountants in 2022.
CRL’s transparency rules currently extend only to firms providing conveyancing, probate and immigration services.
Under the new rules, firms would have to display information ‘prominently’ and in way that was “clear and accessible”, using a font size no smaller than 11.
They would enable consumers to “access and compare a wider choice of providers than they do now”, which should help “increase competition in provision of legal services”.
Firms without websites would have include all the information in a ‘consumer information leaflet’ which they must make available on request and provide to CRL.
The regulator said that responses to a consultation confirmed that the rule changes had the backing of the firms it regulated.
“All the responses from our firms supported the extension of the rules to all legal services provided to consumers and did not foresee any issues with interpretation, the consumer information leaflet and publication of a link to the Legal Ombudsman decision data page.”
The Legal Services Consumer Panel, in its response, said the rule changes demonstrated that CILEx Regulation was “taking this area seriously”, though there was “still room for further progress”.
It suggested that the consumer information leaflets should also be provided by law firms with websites and CRL should consider “new policy interventions to improve information about the quality of legal services for consumers”.
The Council for Licensed Conveyancers’ (CLC) response agreed that extending the rules to all practices areas would “end differential treatment of consumers”.
It suggested that firms without websites should give consumers information leaflets without needing to be asked.
The CLC questioned whether including a link to LeO’s website on firms’ websites would “result in differential provision of information to consumers depending on whether they are digitally excluded or not, and if so, whether this provision will inadvertently perpetuate information asymmetry for those consumers who are digitally excluded”.
CRL said it was collaborating on research to gain a better understanding of digital exclusion.
“This will feed into iterative development of our work to improve provision of information for consumers.”
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