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The Solicitors Regulation Authority (SRA) is considering whether to make data on complaints and insurance claims against law firms available to consumers as “possible indicators of quality”, it has revealed.
It may also introduce logos to denote to consumers that firms are regulated and to indicate that their clients would have access to the SRA’s compensation fund.
In a supportive response to the Competition & Market Authority’s interim report on legal services, the SRA agreed that the market was not functioning as effectively as it could.
It acknowledged that there were risks in publishing information about complaints and claims, such as how well the data could be contextualised so that consumers could understand it, “unintended market consequences”, firms not categorising complaints correctly or deterring consumers from complaining so as to report a lower number of complaints, and diversity implications.
It said: “Our current view is that these risks are not insurmountable, but we will need to work through them carefully and engage with our stakeholders and those we regulate before coming to a final decision.”
The SRA is looking at a single digital register bringing together the basic information it provides online on law firms with the enforcement action that can be found on a different part of its website. Any other indicators it chooses to publish will likely to added to this.
The SRA said the similar issues around greater price transparency were also not insurmountable. It said the first main barrier to such transparency was that “many providers of legal services are small businesses, who find it difficult to absorb risk. This results in reluctance to offer fixed fees to consumers and accept that sometimes a matter will unexpectedly require more work than will be paid for by the fixed fee (even though the reverse will also be true, in that some matters will cost less than the fee to resolve)”.
The other barrier was the limited extent to which consumers shop around, meaning “firms can get away with charging different prices to different consumers”.
Further, the legal regulators have commissioned joint research into how lawyers deliver initial client care.
“The focus of the research will be good practice from different areas of the legal services market, and will help us to understand more clearly how information about price and service can be made transparent and accessible for consumers.”
With the SRA backing the inclusion of information about unregulated providers on the Legal Choices website – the information hub for the public run by all the legal regulators – it said the logos could be one way to help consumers understand what to expect from a solicitor and what protection they would enjoy as a result.
The regulator agreed with the CMA that the title ‘lawyer’ should not be protected. “It is simply one of many names available for use in this sector. Others include legal adviser, legal specialist or [type of law e.g. conveyancing] specialist…
“We are not aware of any evidence of consumer detriment being caused by its use. Protecting ‘lawyer’ without evidence of harm would simply extend the reach of regulation and restrict competition. It would therefore also be contrary to the government’s current deregulatory direction of travel.”
The SRA supported the growth of comparison websites in the legal market, describing them as “the single best way to enable consumers to compare legal services providers. Regulators could assist in the short-term and act as a catalyst for more comparison websites by providing more accessible information on their websites. This is our aim in creating a single digital register of firms and individuals containing information that we feel acts as indicators of quality”.
Unsurprisingly, the SRA also welcomed the CMA’s support for the legal regulators having “full independence” from the providers they regulate.
It noted: “Many of the rules we enforce were inherited from the Law Society, and reflect the conflict that organisation experienced, and continues to experience, when asked to regulate and represent the same community. Overly prescriptive and restrictive rules can create unnecessary barriers to entry and inhibit competition.”
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