Will-writing regulation: explore other options first, argues OFT
The Office of Fair Trading (OFT) is opposing the regulation of will-writers, saying it may well be disproportionate and unnecessary.
It has also emerged that the OFT is working with the Solicitors Regulation Authority (SRA) and Institute of Professional Will-writers (IPW) to improve advice to consumers on executor services.
Meanwhile, banks have called for their in-house will-writing services to be exempt from any new regulation, arguing that they provide just as good a service as solicitors’ firms.
In its response to the Legal Services Consumer Panel’s call for evidence on will-writing regulation, the OFT said it did not consider that enough evidence currently exists to justify such a move, warning that regulating a profession can raise costs, limit entry and restrict competition and consumer choice, “while potentially having very little benefit to consumers”.
As a result, the OFT, along with the SRA, has provided to assess the consumer experience of will-writing services. “As a general rule, we believe that unless there is evidence that regulation does, or would, avert consumer detriment, regulation should be treated with a degree of scepticism.”
The response, submitted by legal services team leader Mark Pratt, added: “The OFT would also encourage the consideration of alternative solutions to regulation, such as the use of consumer codes, consumer education programmes and better use of existing consumer protection legislation.” He pointed to the IPW, which last year saw the OFT’s consumer codes approval scheme, and noted that “bait advertising” is outlawed by the Unfair Commercial Practices Directive.
Further, he revealed that the OFT has recently worked with the SRA and the IPW to improve transparency on the fees charged for executor services and to provide advice to consumers on the necessity of these services. “This work should significantly reduce the number of consumers signing up to expensive executor services unawares or that it is not appropriate to their needs,” he said.
Mr Pratt concluded: “The OFT believes that many of the concerns regarding the behaviour of non-lawyer will-writers can be addressed by existing tools such as consumer codes and the enforcement of consumer protection legislation. It appears that regulation may largely duplicate existing mechanisms which can already be used to raise quality standards in this market. In these circumstances, unless research shows strong evidence of consumer detriment, the regulation of non-lawyer will-writers is likely to be disproportionate and potentially unnecessary.”
He added that if it is decided that current consumer protection tools are insufficient and some form of regulation is necessary, “the OFT would support, where possible, the use of existing structures to address the concerns identified”.
In its response, the British Bankers Association (BBA) estimated that banks write about 5% of all wills and said there was no “substantial evidence of consumer harm resulting from the will-writing service that banks offer”. It argued: “We do not believe that it is always necessary to use a qualified professional to prepare a will… A bank’s own in-house unit could produce just as satisfactory a service as a firm of solicitors regulated by the Solicitors Regulation Authority.”
There has been some focus on banks writing wills and stipulating that they are named as executor, but the BBA said this was not compulsory and that banks will renounce their appointment if requested by the beneficiary or if the service is not suited to the estate.
It added that banks should not be placed in the same category as unregulated will-writers as they are subject to regulation in general and customers can access the Financial Ombudsman Service.
The consumer panel received 23 case studies from the public as part of its call for evidence, eight of which related to problems with solicitors and the rest with will-writers. Legal Futures reported last month that the Legal Services Board will on whether to introduce regulation until 2012.
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