CMA’s final report demands the publishing of price information and other transparency measures

By Lee Dixon In Legal News

The final report from the Competition and Markets Authority (CMA) into the legal profession has called on firms to help consumers navigate the market.

The CMA’s final report will not have surprised many in the legal profession but its messages were clear and consistent with those from regulators and other legal bodies in the last 12 months: legal service providers must go further to provide a transparent and competitive marketplace for consumers.

The report, published on the 15th December, analysed a legal services market totalling an estimated £11-£12 billion across England and Wales. It stated:

“Overall, we have found that the legal services sector is not working well for individual consumers and small businesses . . . Consumers find it hard to make informed choices because there is very little transparency about price, service and quality.”

It continued:

“This lack of transparency weakens competition between providers and means that some consumers do not obtain legal advice when they would benefit from it.”

The report, which is the culmination of a year-long study into the legal market has highlighted a number of failings within the industry, including price, service details and data relating to firms’ client satisfaction.

To combat this issue the CMA has suggested that the disclosure of prices for specified services be published more widely and that data held by regulators should be shared with comparison sites and other intermediaries to aid customers in comparing providers.

While it was admitted that not all services were amenable to fixed prices, the report asserted that in more commoditised services such as conveyancing and wills, the impact of fixed fees among many stakeholders had been positive and that this should be adopted more widely.

In addition, the CMA has also urged the Ministry of Justice to extend the Legal Ombudsman to cater for the clients of “unauthorised providers”, as many consumers do not have the knowledge or understanding of the industry to question the regulatory status or qualifications of their legal service provider when they purchase a service.

Step change
According to the report, a “step change in standards of transparency” is needed to enable clients to understand the price and service they receive. In order to better serve those who require legal services, greater choice and competition is needed “given the concerns about access to legal advice and a lack of low-cost alternatives for the provision of advice.”

The recommendations within the report included calling upon regulators to promote independent feedback platforms to assist consumers in gauging service quality. Within the report, The Law Superstore was referenced in relation to the aversion of many legal service providers to publish consumer feedback or utilise review mechanisms.

Acting executive director for markets and mergers, Rachel Merelie, 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.”

In response to the CMA’s final report, The Law Superstore’s CEO, Matthew Briggs, said: “We support the CMA wholeheartedly in driving change in the legal profession. These figures show that we are a long way from consumers getting access to the right support, at a fair price and that needs to change. Why should the British public continue to miss out?

“There are many progressive firms who are already being clear and transparent about costs and service levels.  As the CMA concludes, these leaders show things can be done differently and better.  We believe consumers have the right to understand how much a straightforward legal service should cost and what they will get for the money they spend.”

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