Consumer protection review

What are we trying to do

We have launched a review of our overall approach to protecting consumers who place their trust in regulated law firms – our consumer protection review.

Who needs to know

We want to hear from a range of consumers and their representatives, as well as solicitors and those in the legal sector, on their views as to what is the best approach to appropriately protecting consumers.

What's going on

Over the last decade, our approach to protecting consumers has generally worked well.

Yet the legal landscape looks like it’s changing. Recently we have had to step in more often to deal with failing firms. This includes a recent increase in big firm failures, including Axiom Ince, where the scale of the impact on consumers is much greater.

Shifting risks could potentially lead to significant consumer detriment, so we are doing a comprehensive review of consumer protection.

Consumers are at the heart of this review and we are looking at two main areas:

1. Managing risks: What we can do to reduce the risk that consumers suffer harm in the first place. For instance, can we improve our monitoring processes, or would there be benefits to tightening up our rules around firms holding client money?
2. The safety net: Our Compensation Fund can make good consumers losses when money has gone missing. This could be, for instance, due to a solicitor's dishonesty or the collapse of a firm. How affordable will such protections be over the long term if risks are increasing?

In considering changes to our approach, we will need to get the balance right. For instance, bolstering or even maintaining the current level of consumer protection might not be in the public interest if it is unsustainable. It could lead to large increases in prices or reduced choice for consumers.

We have not put forward proposals at this stage. We want to hear from as wide a range of stakeholders as possible to help develop our approach and will be doing in-depth research direct with consumers.