CMA: Eight years since original recommendations
The Competition & Markets Authority (CMA) has been urged to step in and accelerate the “painfully slow” progress legal regulators are making in developing quality indicators for legal services.
The Legal Services Consumer Panel has taken the unusual step of writing to the CMA to express its frustration at how little has been done since the CMA first identified their need in its 2016 legal services market study, and reinforced in its 2020 follow-up report.
Chair Sarah Chambers noted that, in its new investigation into providers of will-writing, online divorce and pre-paid probate services, announced last July, the CMA highlighted complaints about lack of price transparency, mis-selling, inadequate quality of service, inadequate communication with customers amongst other concerns.
“It is our strong view that the complaints emanating in these areas of law are symptomatic of the problems identified in 2016 and 2020 which persist in this sector,” she wrote.
“Until robust regulation addresses these fundamental failures in transparency, these issues will continue to arise across the entire legal sector and the most vulnerable consumers will continue to suffer the consequences.
“We would therefore suggest that the CMA consider revisiting the review, to look at the recommendations made in 2020 that have yet to be implemented, including (but not limited to) the issue of quality indicators.”
Ms Chambers explained that, while “some tangible progress” has been made on price transparency and service information, “very little has been done to ensure that consumers have access to quality indicators”, despite the panel’s insistence that these were “co-dependent”.
“Information on price is rarely efficient or optimal without quality indicators. Without information on quality, price transparency could perpetuate consumers’ misconception that price equates or correlates with quality, with some consumers assuming that higher priced services are better.”
Ms Chambers acknowledged that, back in 2020, the panel had agreed with the CMA and the Legal Services Board (LSB) that the frontline regulators were in the best position to decide the scope, focus and extent of quality indicators.
“However, we also noted that the long history of inaction and cultural resistance to change justified a pro-active and probably prescriptive intervention… As we feared, progress on this has been painfully slow.”
She said most legal consumers were still in the same position with respect to quality indicators as they were when the CMA first made its recommendations.
“We are disappointed that none of the legal services regulators can identify a single quality indicator that has been published for consumers’ benefit since 2016.”
Last June, the Solicitors Regulation Authority, Council for Licensed Conveyancers and CILEx Regulation published research on quality indicators, some 16 months after it was completed.
Ms Chambers said: “It is unclear if the pilots will materialise into indicators that help consumers to identify and choose the right service provider for their needs. To our knowledge, there has been no timeline or action plan to implement the learnings from the pilot, though we note that some providers are now beginning to engage with review sites.
“Beyond digital comparison tools [ie, comparison websites] and the consumer reviews that may be found within them, we are unaware of any other quality indicator being actively explored by the approved regulators.”
She also expressed the panel’s concerns about the delays inherent in the LSB’s approach, which was to create a policy statement on consumer empowerment – published in April 2022 – that set out the expectation on all legal services regulators to act in this area.
“Following the policy statement, frontline regulators raised concerns about how to contextualise quality indicators. This was frustrating for the panel because we had been discussing contextualisation since 2018, and learnings are available from other sectors.”
Nonetheless, the LSB asked the panel for formal advice on this, which it provided in November 2022.
The LSB subsequently stipulated that it expected to see progress on meeting the statement by autumn this year.
But Ms Chambers considered it “highly unlikely that by September 2024 we will see the development of a consistent, comprehensive and comparable set of quality indicators that consumers need to be able to make informed choices in this market”.
The preparatory work needed to make satisfactory quality indicators available this year has “barely begun”, she noted.
The panel has suggested that, in addition to comparison websites and consumer reviews, consumers should have access to law firms’ own complaints data and full decisions by the Legal Ombudsman.
We reported just last week that the panel has called on the ombudsman to move more quickly on this.
It has also called on the bigger regulators to conduct mystery shopping research “in one or two high-risk areas”, and the smaller regulators to look at specific measures that would work for their parts of the profession.
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