Consumers need better information about legal services, says CMA

Consumers need better information about legal services to help them shop around, a regulatory body said on Thursday.

The Competition and Markets Authority said there was not enough information available on price, quality and service to those looking for legal information to choose the right option, such as when buying a property, resolving a dispute or getting expert advice on financial and employment matters.

Currently only 22% of people compare services before appointing a lawyer, while around £11–£12bn a year is spent by consumers on legal services in England and Wales, on commercial, employment and family law, conveyancing, wills and probate.

Rachel Merelie, acting executive director for markets and mergers at the CMA, said: “Consumers who are equipped with the information they need to assess the services on offer and choose the best deal for them, will not just benefit personally but will also help drive competition, quality and innovation across the whole market. That means a better outcome for everyone and, importantly, fewer people will be discouraged from seeking the help they need.”

After a year-long study, the CMA has set out measures in order to tackle the oversight in the industry, which includes a requirement on providers to display information on price, service, redress and regulatory status to help customers, such as online, as currently only 17% of firms do.

In November 2015, the government said it would look into removing barriers for alternative business models in legal services, and on making legal service regulators independent from their representative bodies.

It said: “This will create a fairer, more balanced regulatory regime for England and Wales that encourages competition, making it easier for businesses such as supermarkets and estate agents among others, to offer legal services like conveyancing, probate and litigation.”

The CMA recommended that regulators work with consumer groups such as the Legal Services Consumer Panel, Citizens Advice, Which?, and the Federation of Small Businesses.

It said that the current Legal Choices website needed to be revamped and the need for price comparison websites, while legal service providers would be encouraged to give feedback and review platforms.

The watchdog also recommended that the Ministry of Justice look at whether to extend protection from existing redress schemes to customers using ‘unauthorised’ providers and to make the current framework more flexible to target those most in need.

The study considered the impact of legal services regulation on competition and found that while the current system is not a major barrier, it may not be sustainable in the long term.

Particularly, the framework is “not sufficiently flexible to apply proportionate risk-based regulation which reflects differences across legal services which could harm competition”.

The CMA said it will evaluate the impact of its recommendations in three years’ time.