Greater transparency on price, service and quality is required in the legal services market to help the public and small businesses, the Competition and Market Authority (CMA) has said in a major report.
The CMA’s 500-page final report into the provision of legal services, Legal services market study, finds that the sector is not working well for individuals and small businesses. This is partly due to a lack of transparency in the sector, which leaves consumers in the dark when choosing a lawyer, it says. It calls for law firms and other legal services providers to disclose more data on the price and service provided so that comparison websites and other intermediaries can inform consumers when they choose a provider. This would include publishing prices for particular services online. It also suggests providers should engage with feedback platforms so that consumers can see the reviews of previous clients.
The CMA suggests regulators should be independent of government and representative bodies, and be risk-based leading to a reduction in number of regulators. It calls on the Ministry of Justice to extend the remit of the legal ombudsman to include unauthorised providers. It backs the SRA’s plans, announced in June, to allow solicitors to practise in unauthorised firms and calls for less stringent regulation of low risk activities so that different business models can be developed.
Rachel Merelie, acting executive director for markets and mergers, said: “The transparency, affordability and accessibility shortcomings we have identified are a real concern.
“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.”
Paul Philip, chief executive of the Solicitors Regulation Authority (SRA), said: “We welcome the final CMA report on its review of the legal market.
“The report makes a good case for regulation that is independent of both representation and government, echoing the SRA view that independent regulation is key for public confidence and will help increase public trust in the sector.” Philip said the report gave “impetus” to planned SRA changes, which include its controversial proposal to reduce the minimum professional indemnity premium.
The CMA’s proposals have been drawn up after consultation with the eight legal regulators, and implementation will be overseen by the Legal Services Board.
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