Closed Consultation

Looking to the future: better information, more choice

14 June 2018

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This summary explains the changes we will introduce following our consultation, which seek to increase transparency in the legal services market.

What is our Looking to the Future programme?

We need to make sure we are keeping pace with a fast-changing legal services market. In 2014 we started our Looking to the Future reform programme, which is designed to make sure we are meeting the needs of the public in whose interest we work by regulating solicitors and law firms in the right way.

We want to make:

  • our rules focus on what matters – high professional standards
  • it easier for the public to access legal services
  • it easier for solicitors and firms to do business.

Our proposals

We split our proposed changes across four major consultations.

We have consulted on:

Why is more information needed?

In December 2016, the Competition and Markets Authority said that a lack of clear information is making it difficult for the public and small businesses to access legal services and make informed choices. This contributes to the fact that only around one in ten people use a regulated professional when they have a legal problem and weakens competition in the sector.
Our research has found that increasing numbers of people want to shop around when choosing a legal service provider, but they find themselves frustrated by the lack of easy-to-access information available on key factors such as quality, price and protections.

What we have done: our Better information proposals

We have developed our proposals through two main stages.

In October 2016, we put forward a discussion paper about what could be done to help people make more informed decisions when choosing legal services.

In September 2017, we formally consulted on proposals to:

  • require firms to publish their prices, limited initially to a select number of legal services
  • In those areas where they are publishing price, also require firms to publish a description of the services they offer
  • require firms to make information on our regulatory protections available - this includes introducing a digital badge that verifies that a firm is regulated by us
  • publish the data we already collect on first-tier complaints made against firms we regulate and their areas of practice
  • build a digital register that holds our key regulatory data about solicitors and firms we regulate in one place and make this available to the public
  • require solicitors working in non-Legal Services Act regulated firms to inform clients that they are not subject to the SRA requirements for compulsory professional indemnity insurance.

Responding to feedback

During our consultation, we engaged with around 21,000 people through a range of channels, including events, focus groups and online. We also had 80 formal consultation responses.

The public and consumer representatives generally supported our reforms to make better information available about legal services available. There was also general support from the profession for some of our measures to improve transparency, in particular our proposals to help the public better understand who we regulate, and the protections regulated firms bring. However, some respondents raised practical implications of publishing some data – especially in relation to price and complaints. Complexity and context was a particular concern.

We also commissioned two pieces of research to inform our approach:

  • Price transparency in the legal services market – this found that the majority of solicitors do not advertise prices, despite evidence that customers are willing to shop around. It also showed that customers are more likely to make 'good financial decisions' when pricing information is more readily available.
  • Better information in the legal services market – this showed that people want access to information about legal service providers and the protections they have in place. Through online trials it demonstrated that people are more likely select a provider carrying a ‘Regulated by the SRA’ digital badge.

This - and other research - has confirmed that people’s priority when choosing a law firm is reputation, followed by price.

In most areas, we are planning to continue with our proposals. However, we have responded to feedback by amending aspects of our approach.

Publishing first-tier complaints data is the one significant area where we have changed our plans. Mindful of concerns that, without appropriate context, complaints data could be difficult to understand for the public, we will not go ahead with our proposals.

What will change

Publication of prices

  • From December 2018, we will require all regulated firms to publish information on the prices they charge, and what these cover, for the following services.
    • For the public: conveyancing, probate, motoring offences, employment tribunals (claims for unfair or wrongful dismissal) and immigration (excluding asylum).
    • For small businesses: debt recovery (up to £100k), employment tribunals (defending claims for unfair or wrongful dismissal) and licensing applications for business premises.
  • Firms who do not know the total cost of a service can provide the information they do know, for example the average cost or range of costs. Firms will also be required to make clear what the price given on their website includes and does not include.

SRA digital badge

  • We will develop an SRA digital badge which regulated firms will display on their website, to show that they are regulated by us, and the protections that brings.
  • Through the badge we will provide a secure click-through to an SRA page which confirms that the firm is regulated by us and explains the protections this provides to customers. There will also be access to the digital register from this page.
  • Responding to feedback in the consultation we will promote the digital badge and register to those seeking to use legal services to make sure people understand what it means.

Digital register

  • We will build on our popular Law Firm Search facility to develop a digital register, providing information on the solicitors and firms we regulate, including the areas of law in which they practise.

Clarity on protections for individual solicitors working in other businesses

  • We will require solicitors working on a freelance basis or in businesses that are not regulated by us, or another legal regulator, to be clear with prospective service users about the protections in place.
  • That means that before they begin working with a client, they will need to explain their insurance arrangements position and be clear that their client will not be eligible to submit a claim to the SRA Compensation Fund if things go wrong.

Complaints information

  • From December 2018, we will require firms to publish details of their internal complaints procedure on their website and how a complaint can be made to the Legal Ombudsman or the SRA.
  • We will not be taking forward our proposals regarding publishing of specific firm data on first tier complaints.
  • Instead, we will focus on encouraging firms to handle complaints well and use the learning from complaints to improve their service standards. We will also publish overall data on complaint levels on an annual basis, as well as conducting wider research into the issue.

Next steps

  • Our approach, including new rules, will be submitted to the Legal Services Board (LSB) approval this summer.
  • We will not be able to confirm exact timing for implementation until the LSB decision. Yet we recognise that solicitors and firms will need time to prepare for these new rules.
  • In our CMA action plan, we committed to bringing transparency requirements into force by the end of 2018. Subject to LSB approval, we therefore expect to introduce our requirements regarding firms publishing prices, service information and details of how to make a complaint, from December 2018.
  • The remaining Better Information reforms will be introduced during 2019.
  • With this in mind we will work closely with the profession to help them understand the changes which may require solicitors and firms to do things differently, as well as highlighting opportunities for them to work in different ways.
  • As part of our wider ‘Looking to the Future’ reform programme, we have also published our decisions around our Handbook reform consultation. This will also need approval from the LSB.

Introduction

  1. This paper is the culmination of our work which began in May 2014 with the publication of our policy statement, Approach to regulation and its reform (which we subsequently refined and expanded upon in November 2015). In that position paper, we explained that one of our two key purposes are to protect users of legal services. This is due to the vast difference in knowledge and understanding of legal services that exists between the public and legal professionals. This puts the consumer at a disadvantage when selecting services.
  2. We began to consider how we could increase transparency in the legal services market. Our objective is that people should have the information they need to make informed choices about the purchase of legal services.
  3. Alongside this work, we began our Looking to the Future reform programme. One of the key aims of this programme is to provide consumers with a greater choice in how they access legal services. This will primarily be achieved through enabling solicitors to deliver unreserved legal services to the public through an organisation that is not regulated by a Legal Services Act (LSA) regulator. To be empowered to realise the full benefits of these changes, consumers need the right information to understand the full range of choices available to them.
  4. Our transparency reforms will ensure that members of the public and small businesses have the information they need about firms, the services they offer, the prices they charge and the protections they have in place. We acknowledge that these reforms will not provide everything consumers need and so we are doing other work to help people make wise choices, such as through the joint regulators Legal Choices website.
  5. We have been clear from the outset that we hope our new transparency requirements will act as a catalyst and that the market will respond by providing better information across the whole of the legal services market. We will use our post implementation evaluations to help us decide whether our requirements have been effective and whether any adjustments are needed. We will monitor the effects of our changes using the impact evaluation framework designed for us by the Centre for Strategy and Evaluation Services. 1
  6. The final rules that have been approved by our Board. These are subject to approval by the Legal Services Board (LSB), but we are publishing them now so all interested parties to see what we have changed in response to the consultation. We also want to give firms as much time as possible to prepare for the new rules. The LSB approval process may lead to changes to the rules and we will keep stakeholders updated. We are currently working on the basis that the new SRA Transparency Rules will come into force during December 2018. This will give firms time to prepare whilst making sure we meet the commitment we made in our CMA action plan to introduce our new publication requirements before the end of 2018. The SRA Roll, Registers and Publication Regulations (relating to our digital register) will come into force during 2019.

How did we get here?

From initial objective to Transparency Rules

  1. In October 2016, we published a discussion paper, Regulatory data and consumer choice in legal services. That discussion paper set out the case for intervening in the legal services market to increase transparency. It also set out the types of data we were considering making available to consumers.
  2. The Competition and Markets Authority (CMA) published its legal services market study in December 2016. The CMA concluded in its report that the legal services sector is not working well for individual consumers and small businesses.2 It stated that people find it hard to make informed choices because there is very little transparency, particularly on price, quality and service. This lack of transparency means that some consumers do not obtain legal advice when they would benefit from it and weakens competition between providers.
  3. The CMA made several recommendations, including some to us. Our consultation in September 2017 responded to that report and taking account of the feedback we received to our discussion paper, set out how we would seek to address the concerns raised. The changes we will make will help the public and small businesses to access better information in order to compare different providers and make informed choices about which provider will best meet their needs. We expect this to include comparing recommended providers, to get a good understanding of how they compare on price and service.
  4. We have worked with other frontline legal services regulators in developing our new requirements to ensure a consistent approach wherever possible. This will help when comparing different types of legal services provider.
  5. We see this work as a first step. Intermediaries, including comparison websites and consumer representative organisations, will play a key role in providing better information to consumers of legal services. We will continue to engage with them during the implementation of our reforms.

How did we gather views on these proposals?

  1. Through this work we have engaged with a wide range of stakeholders, including consumers, consumer representative bodies, comparison websites, small firms and sole practitioners. We have received a lot of support and positive feedback with some stakeholders expressing the view that these reforms are long overdue. We have also heard from people who feel we should be going further. And from others who are concerned about the impact of our reforms on firms, both in terms of an increased burden and the potential to unfairly disadvantage some firms if people do not understand the context behind the information. We have carefully listened to all of the views expressed and they have been key in forming our final positions. Our reforms set out to tackle the lack of transparency in the legal services market in a proportionate and effective way.
  2. Our formal consultation, Better information, more choice, closed in December 2017. We received a total of 80 formal responses from a range of respondents including consumer representative bodies, law societies, solicitors, law firms, sole practitioners, other legal professionals and data re-users such as comparison websites. A detailed analysis of responses is published alongside this document. We have also published all responses unless the respondent requested otherwise.
  3. We have engaged with people in other ways. Through events, workshops and focus groups with members of the public, small businesses, consumers, consumer representative bodies, comparison websites, small firms and sole practitioners, we engaged with more than 2,000 people. More than 19,000 people engaged with our consultation through Twitter polls, Periscope sessions or our digital content. We also conducted in-depth interviews with firms who already publish price information to understand their experience and help inform our thinking.
  4. We have carefully listened to all of the views expressed and they have shaped our decisions. Examples of areas where we have responded to feedback include:
    • Putting our price transparency requirements into rules rather than guidance to make it clear what are mandatory requirements.
    • Providing consumers with details of our professional indemnity insurance requirements and Compensation Fund through our new digital badge rather than asking firms to publish this information on their websites.
    • Including areas of practice within the digital register.
    • Moving away from plans to publish first tier complaints data.
  5. We want to thank everyone who has taken the time to engage with us on our proposals and are grateful for all the feedback and comments we have received.

Research

  1. We reference some of the important research that has been undertaken on the consumer experience of the legal services market. To support our decision making we commissioned further research with thousands of potential users focused on their preferences and decision making. We have tested potential reforms to make sure they are targeted, proportionate and effective. This research tells us that people value having the right information at the right time when choosing and using legal services. 85 percent of consumers say they want information before choosing a legal services provider. Cost and quality information are most commonly sought by consumers. 27 percent of people wanted information on regulatory protections. 3
  2. We have sought to learn from other markets and regulators. We have noted the high level of transparency in other markets and the role regulators have played in bringing this about. When information is provided to consumers, this has led to an increase in the quality of services purchased, or a reduction in prices.
  3. We also know from research that we commissioned jointly with the Legal Ombudsman (LeO) that the three most important things to users of legal services are:
    • regular communication about progress
    • clear information about costs
    • information about the legal process. 4
  4. Our changes will address the second and third of these points.

How did we consider the impact of these changes?

  1. We have explored the impact of our final policy positions in our Impact Assessment. In it, we consider the additional impacts raised through consultation responses, ongoing stakeholder engagement and additional research. We have assessed potential benefits and risks.
  2. We are committed to reviewing the impact of our changes on an ongoing basis. However, we are aware that it is very difficult to predict the impacts of changes aimed at influencing consumer behaviour. We will monitor the impacts as they materialise in line with our impact evaluation framework and act as and when necessary.

Asking firms to make more information available to consumers

  1. Our consultation set out proposals to require firms to make more information available to consumers. These included firms publishing on their websites:
    • Price information and a description of their services (limited initially to a select number of services).
    • Information about the SRA Compensation Fund and that they hold professional indemnity insurance (PII) to the minimum terms and conditions (MTCs).
    • Their complaints procedures and how and when a complaint can be escalated to the LeO.
  2. Below we set out our approach to each of these proposals following our consideration of the responses we received to our consultation, feedback from stakeholders and the research we have undertaken.

Price and description of services

  1. We proposed to require firms to publish price information and a description of their services for certain legal services. In the consultation we set out the legal services we were considering, and asked for views on those, as well as suggestions for other areas we should consider.
  2. We made it clear that rather than requiring firms to publish price information for all of the services listed, we would choose a smaller number once we had considered responses to the consultation.
  3. Annexed to our consultation were the proposed draft SRA Roll, Register and Publication Regulations. We also annexed draft guidance on price and service transparency. We explained that we intended that within this guidance, we would set out the principles of price publication and define the legal services in which price publication would be mandatory.

What did people say?

  1. A minority of respondents supported our proposal, including consumer groups, some law firms, comparison website providers and representative groups. Those who did stated that the areas we suggested were commonly used by the public and small businesses and that they could see the benefit to these groups of more information being made available.
  2. A majority of respondents, primarily firms, individual solicitors and law societies, did not agree with our proposals. The most commonly cited reasons were:
    • Legal services are by nature bespoke services which cannot be commoditised. An accurate price estimate cannot be given before the solicitor has spoken to the client to understand the type of service the client needs. Some respondents suggested that price information would have to be heavily caveated, which would cause confusion to consumers.
    • Consumers do not have enough knowledge of the type of service they need and will therefore focus on simply getting the cheapest possible service for them. This will drive competition on price alone, leading to a lowering of standards as firms cut corners.
    • Regulated firms will be at a disadvantage compared to non-SRA regulated firms as they will not have to comply with any price transparency requirements.
    • The market is best placed to address any transparency issues and there is not a strong enough evidence base for regulatory intervention. The cost of compliance with new rules will ultimately be borne by consumers.
  3. Some respondents, including law firms and some law societies, argued that we should not require firms that mainly do work in the specified areas for corporate or wealthy clients to publish price information.
  4. Most respondents did not have any detailed comments about the draft rules. However, some respondents were concerned that, since much of the price publication requirements were mandatory, they should be contained within rules, rather than guidance.

What are we going to do?

  1. We will mandate that firms, on their websites, publish price information and a description of services for certain legal services. Firms that do not have a website will need to provide the same information on request. Individual self-employed solicitors (freelance solicitors) will also need to comply with these requirements. We will provide support and guidance to firms and freelance solicitors as they seek to implement our requirements.
  2. We have carefully considered the concerns raised in response to our consultation. However, we agree with the CMA that there is a strong enough evidence base for regulatory intervention to make the legal services market work better for consumers. In reaching this decision, we have taken into account a number of factors. 63 percent of adults and 83 percent of small businesses see legal services as unaffordable. 5 When people deal with legal issues without the help of a solicitor, this is often the reason. 6 We believe that increased price information will help to overcome this.
  3. Only 27 percent of people shop around when purchasing legal services. 7 Part of the reason for this is that there is very little information easily available. Only 18 percent of firms publish price information. This is despite the fact that 83 percent of firms have a website and 6 percent are in the process of developing one. 8
  4. Consumers in our research expressed a clear appetite for searching the market when purchasing legal services, with 66 percent saying they considered more than one solicitor when instructing conveyancing work and 71 percent spending more than an hour researching options. However, the majority said that price information was not readily available, and only 15 percent were able to get price information without having to contact a solicitor directly for a specific quote or approaching a third party. 9
  5. Many respondents, including law firms and law societies, raised concerns about the feasibility of giving an accurate estimate before speaking to a client given the bespoke nature of legal services. We consider that our requirements are broad enough to provide firms with flexibility in how they publish their prices, whilst being clear enough to make sure consumers will receive a good upfront indication of the cost of a legal service. Our rules will allow firms who do not know the total cost of a service to provide the information they do know, for example the average cost or range of costs. Firms will also be required to make clear what the price given on their website includes. This will enable firms to provide prices based on a standard case and make it clear what additional services would incur additional fees. Our rules will not stipulate which type of pricing or charging model a firm should use.
  6. We understand the concerns of respondents about the risk of driving competition on price alone. Research has shown that price is the second most important factor when choosing a provider - reputation being the most important. 10

    However, our research also shows that only a small minority choose the cheapest provider. In a survey of 1,000 legal service users we commissioned, only six percent of participants said they chose a provider because it was the cheapest. 11

  7. We envisage that our price transparency requirements will enable consumers to compare a number of firms who could deliver the legal service they are looking to purchase and select the one that best suits their needs based on balancing the cost of that service with other factors that matter to them. This may be information about quality, who works in the firm, areas of specialism, location, etc. We would therefore encourage firms to consider what other information they could publish about their services to help consumers make an informed choice.
  8. We know that consumers can save a lot of money by searching the market when choosing a provider. Research commissioned by the LSB asked firms to price a standardised scenario. The findings show the same service being quoted at costs between 17 percent and more than 400 percent of Average Weekly Earnings in the UK.12 Price and service publication could help address these differences, whilst providing an opportunity for firms who do want to charge higher fees to be clear about the service they are offering for that additional money.
  9. We do recognise that non-SRA regulated providers will not have to comply with our price requirements. Our view is that firms who are transparent about their prices will be at a competitive advantage over firms who are not, and our transparency requirements will therefore place SRA regulated firms in a great position to compete in the legal services market.
  10. We understand that some firms are concerned about the burden of publishing this information. We will produce guidance for firms, providing examples of ways in which they can comply with our requirements to reduce the burden on them. However, we do not agree that our requirements represent a pure burden to firms. Our research shows that consumers want and value this information and would like to be able to more effectively shop around when purchasing legal services. This means that publishing transparent information about price and service provides firms with an opportunity to be more competitive in the legal services market and therefore attract new clients.
  11. The areas we will mandate publication in are listed in the table below, along with a short summary of why we have decided to proceed with that area. In general, we have chosen services in which we believe firms can fairly easily predict the activities that will need to be carried out and so fix or estimate prices.
Area Why we will proceed with this area
Residential conveyancing
  • This is an area which can be relatively commoditised. The work is reasonably standardised for most transactions.
  • Price publication is common for this service, with around 13 percent of firms currently publishing prices.
  • Respondents to the consultation who did support mandating price publication commonly cited residential conveyancing as a good area to start with.
  • Working with other regulators, we hope that price transparency requirements will cover the whole of the regulated market.
Probate
  • Information suggests that it is an area where price competition could be improved and where there are currently significant and unexplained differences in prices quoted for the same work.
  • Working with other regulators, we hope that price transparency requirements will cover the whole of the regulated market.
Motoring offences
  • This is an area where many consumers are likely to be making distress purchases with little knowledge of either the process or what to expect.
Employment tribunal (employer)
  • Services in this area can often be distress purchases.
  • Small businesses are cost sensitive and more knowledge of the upfront cost of a case proceeding to tribunal (and what it entails) gives an opportunity to make an informed choice on how to proceed with an employment matter.
Employment tribunal (employee)
  • Access to price and service information about employment tribunals should also be provided to employees.
  • The upfront cost of taking a case to tribunal can be significant. Access to more price and service information can help an individual assess the merits of taking their matter forward or take alternative action. More knowledge of the process leads to more informed decisions.
  • Individuals will often be making a distress purchase when seeking these services.
Licensing applications
  • This is a common issue for small businesses and an area which can be relatively commoditised.
Debt recovery
  • Services in this area can (and often are) commoditised.
  • This is a legal problem for many small businesses that they do not currently seek legal help for. More price information can lead to more businesses seeking this type of legal service.
Immigration (not including asylum)
  • We did not include this area within our consultation, but asked respondents if there were any areas they felt were missing. A number of stakeholders asked us to consider immigration given the vulnerability of clients. Stakeholders also raised concerns about unexplained differences in prices for the same work.
  • Excluding asylum, immigration matters are commonly privately funded.
  • Working with other regulators, we hope that price transparency requirements will soon cover the whole of the regulated market.
  1. Although firms will only be required to publish price and a description of services in these areas, we encourage firms to publish price and service information for additional legal services if they are able to do so.
  2. In our consultation we suggested other areas that might be suitable for price publication, in addition to the ones that are listed above. However, we made it clear that we would choose a smaller number of areas once we considered the feedback we received. Introducing price transparency rules in a small number of areas makes it easier to refine our requirements as we learn how they work in practise for firms and for consumers.
  3. In deciding which legal services we would take forward initially, we needed to consider which areas we thought would make the biggest impact. Some areas (such as motoring offences) are distress purchases that are relatively commoditised, making it more straightforward for firms to publish the cost of services. Other areas offered the greatest opportunity to work with other legal services regulators to introduce consistent price transparency requirements to cover the whole regulated market. In particular, we are working closely with The Council for Licensed Conveyancers, the Chartered Institute of Legal Executives and the Office of the Immigration Services Commissioner. The legal services offered by the firms that these organisations regulate gave us the opportunity to work towards consistent requirements in relation to conveyancing, probate and immigration for all regulated firms offering these services. This was a key factor in selecting these services.
  4. We also considered the prevalence of price information in different areas. In 2017 we conducted a survey of firms we regulate to find out more about their attitude towards publishing price. The most common areas of law that firms do publish price information in are family/matrimonial (this includes divorce), where 32 percent of respondents said they publish price information. Similarly, for the area of wills, trust and tax planning, 28 percent of respondents said they publish price information. We recognise that there is room for improvement in these figures but compared to the figures for the areas we have chosen to proceed with (for example, 2 percent for motoring offences), there is a relatively high level of transparency in these areas already. 13 We therefore decided to wait to see how the market develops in relation to price publication for divorce and will writing.
  5. In personal injury matters it is very common to either use a damages-based agreement or a conditional fee agreement. While we recognise that consumers of these services would also benefit from more price transparency, we think that a greater understanding of the process and what it involves would have a higher impact on these people and help them in choosing a legal services provider.
  6. We will issue guidance for both divorce and personal injury matters on how firms can be more transparent. This guidance will encourage price transparency in these areas, but also focus on providing clear and accessible information to consumers on the legal process they are going through and help them to understand their options. We are keen to work with stakeholders in these areas to develop this guidance.
  7. We think that both divorce and personal injury are legal services that are well suited for this approach. For example, people who seek legal advice for these issues tend to be vulnerable and have little knowledge of how the legal process they are undergoing works or what it entails. 14
  8. As set out in our November 2015 policy statement, we recognise that not everyone requires the same level of protection and we need to target our regulation where appropriate. We believe our price publication requirements will most clearly assist individual consumers and small businesses. Corporate clients are not at the same disadvantage in terms of information asymmetry and are unlikely to use comparison information in the same way when choosing a legal services provider.
  9. We have therefore given careful thought to how to frame our requirements. Our requirement to publish price and service information only applies where a firm publishes as part of their usual business that they provide the relevant service. This includes all forms of advertising, signposting and marketing, such as any mention of offering the service on the firm's website, in a window display or any other type of marketing they undertake.
  10. We have decided that the price publication will apply to firms that specialise in providing the relevant service to wealthier individuals or business clients. Appropriate price and service information will also help these clients make informed choices, for example about whether they would like a basic or a high-end service. Firms may choose to explain their particular specialism, expertise, experience and service that they provide in order to distinguish themselves.
  11. Many respondents said that a price publication requirement will only be useful if firms are required to display the information prominently on their websites. We know that consumers do not spend much time searching for price information on a website so are less likely to engage with a firm if they cannot find price information easily. 15 Research also tells us that people make better choices when presented with accessible information, ie on a firm's homepage rather than somewhere on the website they need to search for. 16
  12. We will require firms to make the price information and description of services clear and accessible and publish the information in a prominent place on their website. We will not prescribe exactly where on a firm's website the information must be published. We believe that this is a matter of judgment for each individual firm. Those that provide price information in the clearest and most accessible way are more likely to be chosen by consumers than those who do not.
  13. We agree with the views of many respondents that it is right that we move mandatory requirements into our rules. We have decided to split the rules into two separate sets. One set will cover the publication requirements for firms (the Transparency Rules), and the other will set out the rules relating to our digital register (SRA Roll, Registers and Publication Regulations).
  14. We will monitor compliance with the rules and any breaches will be dealt with in accordance with our Enforcement Strategy. We want to be clear that we will investigate complaints of non-compliance and of misleading information.

Regulatory status, protections and a digital badge

  1. We think it is important that we make it as easy as possible for people to understand what kind of legal services provider they are engaging and what kind of protections they have, including in the rare event of something going wrong.
  2. We proposed that firms should be required to publish on their websites:
    • that the firm is regulated by us. To do this, we proposed developing an SRA regulated logo which will also operate as a digital badge
    • that consumers may be eligible to submit a claim to the Compensation Fund, and to promote visibility of the Compensation Fund by using a SRA Compensation Fund logo
    • that the firm has PII and that it complies with our MTCs (including the amount of the minimum level of cover), the contact details of their insurer (or insurers if more than one) and the territorial coverage of the insurance
    • details of the firm's internal complaints procedure
    • how and when clients can make a complaint to the LeO.

What did people say?

  1. There was broad support for these proposals from most respondents, including consumer and profession representative groups and firms. Some respondents suggested that the digital badge would denote that a firm has PII to the MTCs and that consumers can submit a claim to the Compensation Fund, making the separate publication requirements for these areas somewhat redundant.
  2. Our proposals to require firms to publish their own complaints procedures and how to escalate a complaint to the LeO were uncontroversial, with most respondents agreeing that this would be good for consumers. Those who disagreed mainly did so because they thought this information would be more appropriate to provide in the client care letter.
  3. A consistent theme raised by respondents is that without increased public understanding of the role and function of the SRA, the increased confidence that a logo could bring may be lost.

What are we going to do?

  1. We will:
    • Develop a 'regulated by the SRA' digital badge. This will be mandatory for (and exclusive to) regulated firms to display on their website.
    • Require firms to publish details of their complaints procedure on their website.
    • Require firms to publish details about how and when a complaint can be escalated to the LeO on their website.
    • Require firms to publish details of how and when a consumer may make a complaint to us on their website.
  2. The digital badge will be a key way to validate that a firm is regulated by us. It will give consumers confidence when purchasing services from a regulated firm displaying the badge. In our online trial, which tested the badge with 1,899 people, we found people were more likely to choose a website with an 'SRA regulated' digital badge. 79 percent of people felt more confident when purchasing services from a website with a badge such as our proposed one. 17 It will also help protect against fraudulent activity, such as cloned websites.

  3. Having considered the responses we received to our consultation, we will not proceed with requirements on firms to publish details about PII and the Compensation Fund. Instead we will display this information, which will be the same for all firms, on the landing page of the digital badge. This approach will also make a separate Compensation Fund logo unnecessary. This will remove any additional burden on firms and help to raise awareness of the additional protections available when purchasing legal services from a regulated firm. In our trial, more than half of participants told us that they would find it useful to be able to click on a 'SRA regulated' badge and find information on the protections available. 18
  4. Displaying clear information about regulatory protections aids consumer understanding and enables them to make more informed choices. Our research shows that when provided with information on regulatory status and protections available, consumers do use the information in their decision making. If also provided with price information, they are able to weigh up the importance of both to them and do not always just select the cheapest provider. 19
  5. We understand that it will take time for the public to recognise and understand the meaning of the digital badge. In our online trial, 56 percent of participants said that they noticed the 'SRA regulated' badge on homepages. 20 This means that we can build on this recognition and understanding over time. Other frontline legal services regulators have also developed digital badges or are in the process of doing so. This provides us with an opportunity to work together (as well as with consumer representative groups) to raise awareness amongst of what it means to be a regulated legal services provider.
  6. We are planning to develop and implement the digital badge during 2019. In the interim we will make sure that the right information to aid choice is available on our website. We will help firms to direct consumers to this information and use our own social media activity to direct traffic to it.
  7. The digital badge will be provided to regulated firms only and therefore will not be provided to freelance solicitors. However, freelance solicitors will be subject to the other requirements listed above.
  8. Firms and freelance solicitors without a website will be required to provide, on request, details of their complaints procedure and of how and when a complaint may be made to the LeO or to us.
  9. Firms will be provided with support and guidance to help them set up the digital badge correctly.
  10. We recognise that knowledge of a firm's complaints procedure is not likely to be a deciding factor for people when choosing a solicitor. However, we know that many clients are hesitant to complain, and that some do not know how to complain when they want to. Our research tells us that 98 percent of firms provide information about their complaints procedure at the start of a matter, but only 37 percent of consumers say they were told about it. And only 4 percent remember being told of their right to escalate their complaint to the LeO at the end of the firm's internal complaints procedure. 21 We think that providing this information openly and transparently on a firm's website will help educate people about their rights to complain if they feel something has gone wrong. It will also enable clients to find this information easily in the event that they cannot find the client care letter or do not know that this is where they can find the complaints procedure. We will work with the LeO to provide standard wording about the right to escalate a complaint to them. Firms may use this wording if they wish.
  11. Two concerns were commonly raised in response to our consultation. Firstly, that there is little knowledge amongst consumers that not all legal services providers are regulated and secondly, a low understanding of the existence and role of the SRA. We will require firms to publicise that they can report concerns about professional conduct to us. Together with the digital badge, this will begin to increase public knowledge and understanding of the SRA and more widely, of the benefits of regulation in the legal services market. We will provide standard wording that firms may adopt if they wish, which will reduce the burden on firms.

Developing a digital register

  1. We proposed to develop a digital register where we will publish key information about the individuals and firms we regulate, for example if we have taken any disciplinary or regulatory action against a firm or individual.

What did people say?

  1. Our proposal to develop an online digital register was well received by the majority of respondents including consumer representative groups, individual solicitors, firms, and professional and. It was felt that easily accessible regulatory, enforcement and disciplinary information about solicitors and firms we regulate could help a consumer validate their choice of provider.

What are we going to do?

  1. We will proceed with developing the register that contains information on all the solicitors and firms we regulate. We will include in the register the data categories we outlined in our original consultation document. A full list is available in our rules. Our aim is to launch our digital register during 2019.
  2. We will publish an accessible, separate list of those solicitors that have been struck off or have had their practising certificate suspended. This will provide details of Solicitor Disciplinary Tribunal outcomes. If a solicitor is reinstated to the roll, their details will be removed from this list. We will help people to understand how this list can be used in conjunction with the main register when validating a solicitor.
  3. We will develop a separate list of firms we have taken the decision to close to improve consumer access to this information.
  4. We will also publish relevant decisions about regulated individuals who are not (or are no longer) solicitors, registered foreign lawyers or registered European lawyers.
  5. Our next step is to consider how we take forward the design of the register; making sure that the register is easy to use is a key priority for us. Consumer need, experience and understanding will be central to development and so we will work with consumers and consumer representative bodies in finalising and testing the design. We will continue working with other regulators to explore how we can ensure consistency between registers, for example, using common data categories and terminology. We will also work with data re-publishers to make sure that they can access information as easily as possible.
  6. We appreciate that awareness and therefore use of the register will be low to start with. We will work with a wide range of stakeholders, including consumer and business representative groups, to raise awareness of the register.

Complaints data

  1. We collect information about first tier complaints from firms every year through our annual practising certificate renewals. We do not currently publish this information. We proposed in our consultation that we would publish this data on our website (not within the register). We suggested that this data could be used by third parties such as comparison websites and could be a helpful indicator of quality to consumers if appropriate context was provided.

What did people say?

  1. A substantial number of respondents disagreed with our proposal. Many respondents felt that raw complaints data could be misleading and pose an unfair disadvantage to some firms. However, many of these respondents also felt that providing appropriate context to the data would be difficult.
  2. Some respondents were also concerned that publishing complaints data would distort the behaviour of some firms and their employees when it came to reporting complaints. This could lead to complaints being hidden, even from the management of firms, hampering a firm's efforts to learn from complaints and improve customer service.
  3. A minority of respondents, such as the Legal Services Consumer Panel (LSCP) and the LeO supported our proposal and offered views as to what contextual information would be necessary to make the raw complaints data useful for consumers.

What are we going to do?

  1. At the moment, we will not proceed with the publication of first tier complaints information.
  2. The decision was finely balanced as there are clear potential benefits to consumers of publishing this information, if properly contextualised. The number of complaints received by a firm can be an indicator of quality and research carried out by the LSCP suggests that consumers would use complaints data when choosing legal service providers if that information was available. 22 Our own research indicates that 91 percent of users of legal services say that having access to firms' complaints data would be helpful to them. 23
  3. However, a number of factors have influenced our decision to not proceed. We are concerned that the publication of first tier complaints data could change how firms view receiving complaints. At the moment, most firms welcome complaints as an opportunity to learn lessons and improve service delivery. The publication of individual firm complaints data could change this as firms worry that complaints data may deter other clients from choosing them. This could change the culture within a firm and may lead to staff avoiding recording an issue as a complaint to present a favourable image. This, as some respondents said, could lead to complaints being hidden from the management of firms and hamper firms' efforts to learn from complaints.
  4. We have considered whether we can present the complaints data we currently hold in a way that makes it easy for consumers to draw comparisons between firms. The data shows that most firms are closely concentrated around a similar level of first tier complaints. For example, if we categorise firms by low, medium and high levels of complaints received, 99 percent of firms would fall within the low category.
  5. We also considered how to contextualise complaint data in a way that was meaningful for consumers. This would be complex and require us to collect additional information, for example, number of transactions. This would increase the administrative burden on firms.
  6. We know that consumers expect data published on the websites of regulators to be accurate and robust. We do not undertake any verification of the complaints data we collect and it would require a great amount of resource for us to do so. However, without that verification, we do not feel able to publish the data knowing that consumers will rely on it. We have considered whether we could publish the data with appropriate caveats, but we are concerned that many consumers would not read the caveats and would assume the data had been verified by us.
  7. Therefore, having carefully weighed up the advantages of publishing this data against the risks and issues associated with doing so, we have reluctantly concluded that we will not proceed to publish first tier complaints data at this time. However, we recognise that information about complaints is important to users of legal services. To support consumers in making a purchasing decision, we will use our digital register to signpost consumers to the LeO complaints and Ombudsman's decisions data. In our consumer trial testing LeO's Ombudsman's decisions data, we found that people used and generally made 'good' decisions based on the data. 24 The trial was designed so that in each situation where a participant had to choose a provider, there was a 'best' option based on the number of Ombudsman's decisions and remedies awarded.
  8. We will also provide guidance to firms on engaging with client reviews and feedback platforms, such as Trustpilot and Checkatrade. Feedback from consumers and consumer representative bodies tells us that consumers value the information they can get from such platforms.
  9. We will focus on encouraging firms to handle complaints well and use the learning from complaints to improve their service standards. We will monitor complaints data at an individual firm level. Where we have concerns about an individual firm, for example, if we see a pattern of increased complaints, we may engage to explore the issue further. Where we have concerns with a sector of the market we will undertake a thematic review to explore issues in more detail and help determine whether we need to take any action.
  10. We will publish aggregated data on first tier complaints on an annual basis, for example, overall number of complaints received, types of complaint received and most common complaint type. Publishing this information annually enables us to highlight complaint patterns and trends.

Areas of practice

  1. Through our annual practising certificate renewals, we collect information about the areas of law in which a firm practices, based on turnover. We proposed to publish this information on our website, separately to the digital register.

What did people say?

  1. The majority of respondents including a consumer representative group, individual solicitors and firms recognised that publishing data about the areas of law in which a firm practices could help consumers validate their choice of provider. This information was also considered helpful by data re-publishers. Most respondents who supported the publication of this data, felt it should be published within the digital register rather than separately to it.
  2. Some respondents suggested that we could better categorise the current areas of law to more accurately reflect the work they do.

What are we going to do?

  1. We will proceed with our proposal to publish information on areas of practice. We will not publish the percentage of turnover just the areas of law.
  2. As set out in our consultation, we will undertake a review of the areas of practice we currently use. We will make sure that any categories we use going forward better reflect the diversity of modern practice. We will work with a wide range of stakeholders to achieve this.
  3. We suggested that we should publish this information separately from the main digital register. We did so because the data would be historical as it is generated from information provided by firms in the previous year's annual practising certificate renewals.
  4. We agree with consultation responses that consumer benefit could be diluted if we published this information separately. We will now include this information as part of the digital register.

Individual solicitors working outside Legal Services Act regulated firms

  1. Under our rules, solicitors working in non-SRA regulated firms will not be subject to the requirements for mandatory PII that would apply in an SRA regulated firm. This will ordinarily be a matter for the organisation the solicitor works for. Clients of solicitors working in non-SRA regulated firms will also not be eligible to apply to the Compensation Fund if something goes wrong.
  2. We proposed solicitors working in non-Legal Services Act (LSA) regulated firms must inform their clients at the point of engagement of both things.

What did people say?

  1. There was support among consumer representative groups, profession representative groups, individual solicitors and firms for our proposals. Many felt that it was critical that clients of solicitors working in non-LSA regulated firms understood the differences in consumer protections.

What are we going to do?

  1. We will proceed with our consultation position regarding solicitors in non-LSA regulated entities. We will go slightly further as we have reviewed our requirements in light of feedback received to this and our Looking to the Future consultations.
  2. Individual solicitors working in these entities will be required to inform their clients, at the point of engagement, that they will not be eligible to submit a claim to the Compensation Fund, and that they are not required to hold PII in accordance with our MTCs. We felt that the insurance requirement would prompt the solicitor to inform clients of what their insurance position was. However, this may not always be the case and some clients may not have the confidence to ask. We have therefore decided to require solicitors in non-LSA regulated entities to inform clients of what alternative insurance arrangements, if any, they have in place and provide details if requested.
  3. Firms regulated by another LSA regulator will have to comply with that regulator's PII requirements. Other LSA regulators also have their own compensation arrangements if something goes wrong. This is the reason that our requirements are limited to solicitors working in non-LSA regulated entities.
  4. This means that information about protections will be provided before formal engagement and in time for a client to take this information into account when deciding whether to continue to purchase legal services from that firm.
  5. Freelance solicitors will be required to hold PII that is adequate and appropriate. They will need to inform clients that they are not required to hold PII that meets our MTCs and explain what insurance they do have in place. Clients of freelance solicitors will be entitled to claim on Compensation Fund.
  6. As set out in our consultation, our transparency requirements will not apply to solicitors working in special bodies.

Footnotes

  1. SRA, Impact evaluation framework, 2017
  2. Legal Services Market Study final report, p4
  3. Better Information in the Legal Services Market,
  4. London Economics and YouGov, Research into the experiences and effectiveness of solicitors' first tier complaints handling process,
  5. Hodge, Jones & Allen, Unjust Kingdom: UK Perceptions of the Legal and Justice System, Innovation in Law Report 2015, 2015, p10
  6. Ipsos Mori, Online survey of individuals' handling of legal issues in England and Wales, research commissioned by the Legal Services Board and The Law Society, 2016, p6
  7. Legal Services Consumer Panel, Tracker Survey, 2017, p1
  8. Solicitors Regulation Authority, Price transparency in the legal services market – firm perspective, 2017, p4
  9. Economic Insight Ltd, Price transparency in the conveyancing market – A report for the Solicitors Regulation Authority, October 2017, p34
  10. Legal Services Consumer Panel Tracker Survey 2017, p2-3
  11. Economic Insight Ltd, Price transparency in the conveyancing market – A report for the solicitors regulation authority, October 2017, p42
  12. Legal Services Board, Prices of Individual Consumer Legal Services 2017 – Main Report, 2017, p9
  13. Solicitors Regulation Authority, Price transparency in the legal services market – Perspective of legal firms, 2017, p.24.
  14. K. Vaughan and R. Merola, Divorced from reality – six steps to ensuring divorce processes meet separating families' needs, Citizens Advice Bureau, 2017, p2
  15. Economic Insight Ltd, Price transparency in the conveyancing market – A report for the solicitors regulation authority, October 2017, p6
  16. Economic Insight Ltd, Price transparency in the conveyancing market – A report for the solicitors regulation authority, October 2017, p54
  17. Economic Insight Ltd, Better Information in the Legal Services Market, research commissioned by the Solicitors Regulation Authority and Legal Ombudsman, p100
  18. Economic Insight Ltd, Better Information in the Legal Services Market, research commissioned by the Solicitors Regulation Authority and Legal Ombudsman, p100
  19. Economic Insight Ltd, Better Information in the Legal Services Market, research commissioned by the Solicitors Regulation Authority and Legal Ombudsman. P117
  20. Economic Insight Ltd, Better Information in the Legal Services Market, research commissioned by the Solicitors Regulation Authority and Legal Ombudsman, p109
  21. London Economics and YouGov, Research into the experiences and effectiveness of solicitors' first tier complaints handling process, research commissioned by the Solicitors Regulation Authority and Legal Ombudsman, 2017, p. 27-28.
  22. LCSP, Opening up data in legal services, February 2016, p.3.
  23. London Economics and YouGov, Research into the experiences and effectiveness of solicitors' first tier complaints handling process, research commissioned by the Solicitors Regulation Authority and Legal Ombudsman, 2017, 11.
  24. Economic Insight Ltd, Better Information in the Legal Services Market, research commissioned by the Solicitors Regulation Authority and Legal Ombudsman, p79

About this consultation

We are consulting on publishing more of the regulatory data we hold about solicitors and firms we regulate. We are also consulting on asking the solicitors and firms we regulate to publish more information on the legal services they provide. We are proposing to:

  • require firms to publish their price for services (limited initially to a select number of legal services)
  • require firms to publish a description of the services they offer - in the same areas we will ask firms to publish price information
  • require firms to make information on our regulatory protections available - this includes introducing a digital badge that verifies that a firm is regulated by us
  • publish the data we already collect on first-tier complaints made against firms we regulate and their areas of practice
  • build a digital register that holds our key regulatory data about solicitors and firms we regulate in one place and make this available to the public.
  • require solicitors working in non-Legal Services Act regulated firms to inform clients that they are not subject to the SRA requirements for compulsory professional indemnity insurance.

We are proposing these changes because we want to make sure that people have accurate and relevant information about a solicitor or firm when they are considering purchasing legal services. This will help members of the public and small businesses make informed choices and improve competition.

Alongside this consultation, we have published our initial impact assessment of these proposals.

We are keen to hear your feedback on these proposals.

This consultation is running from 27 September 2017 until 20 December 2017. After this consultation closes, we will collate and analyse all the responses. We will then decide what next steps we need to take.

Looking to the future

This consultation is part of our wider Looking to the future programme. We are currently consulting on linked issues in our other consultation, Looking to the future: phase two of our Handbook reforms Looking to the future: phase two of our Handbook reforms.

That consultation proposes to simplify and streamline rules in our Handbook. It also sets out our revised Enforcement Strategy and the transitional arrangements for the introduction of the Solicitors Qualifying Examination.

We have already started to make changes with simplified Accounts Rules, Codes of Conduct and SRA Principles, and we consulted on how and where solicitors can practise in phase one.

Through our Looking to the future programme we are:

  • simplifying our regulations so they are clear on the high professional standards we expect and what we will do when solicitors fall short of those standards
  • getting rid of unnecessary bureaucracy that drives up costs or restricts access to solicitors, while making sure the right public protections remain in place
  • improving the information available to help people make better choices.

Learn more about our 'Looking to the future' program

Background to consultation

Our rationale for change

  1. Our Looking to the future reform programme will update our regulatory framework so that it better fits the evolving market. It follows that our regulatory data collection and provisions should also adapt and help people to access accurate, reliable and comparable information about firms and solicitors when choosing a legal service provider.
  2. This consultation has five sets of proposals. They have been developed to both help people to access better information and to drive law firm behaviour to increase competition and provide more information about their services.
    • To introduce requirements for firms we regulate to publish information on price and description of services in certain types of matters.
    • To introduce requirements for firms we regulate to confirm on their websites their regulatory status and protections by:
      • using a 'Regulated by the SRA' badge and logo which we will develop. The digital badge will be mandatory for firms to display on their website to verify that they are a regulated firm. The logo will be optional on print materials, advertisements and signatures as an alternative or addition to the current 'Authorised and regulated by the SRA' wording
      • publicising the complaints procedure including access to the Legal Ombudsman (LeO)
      • publicising that they hold professional indemnity insurance (PII) which meets our minimum terms and conditions (MTC).
    • To publish a new digital register containing key information about the firms and solicitors we regulate, bringing our regulatory data together in one place.
    • To publish firm data that we already collect on first-tier complaints and the firm’s areas of practice, separately from the digital register. This data will be made available to re-publishers, such as online comparison websites, as well as the public directly. It can also be used by firms to benchmark themselves against legal services providers.
    • To require solicitors working in firms that are not regulated for legal services by any of the approved regulators under the Legal Services Act 2007 ('non–LSA regulated firms') to inform clients that they are not subject to the SRA requirements for compulsory professional indemnity insurance.
  3. We see the proposals in this consultation as a first step in changing the way people find and use information about firms and solicitors. This sets out what we think will help address the problems that we are aware of in the legal services market and that the Competition and Markets Authority (CMA) identified in their report. Our proposals will not of course resolve all the issues in the legal services market, but will, we believe, assist people who are considering purchasing legal services. We consider that intermediaries – comparison websites but also organisations that represent clients such as Citizens Advice, consumer groups and others in the third sector will play an important part in the process of providing better information. We will be engaging with intermediaries during and after the consultation process, and would welcome contacts and proposals from those organisations on how to improve transparency.
  4. We are committed to evaluating the impact our final proposals have after they are implemented, and accept that there will be a period of refinement and adjustment. We know that change can take time, and want to help firms adjust by providing guidance and support, to learn and develop alongside us.
  5. In developing our proposals, we have taken the Legal Services Consumer Panel's (LSCP) nine criteria for successful implementation of information remedies into consideration. 1 The criteria will also be helpful to us when evaluating the responses to this consultation and in developing our final position.
  6. Our proposals focus primarily on firms publishing required information on their websites. Those without a website will have to provide the information to the public on request without the need for a consultation. We have considered whether the requirements on firms without a website should be more prescriptive. However, whatever format we prescribe will not provide consumers with the ease of up front comparison that is obtained via the internet. We recently surveyed the profession on this question: almost 90 per cent of those that replied stated that they have or are developing a website. This ties with other data to suggest that a significant majority of firms will be covered by our website requirements.
  7. We are not proposing to impose data publication requirements on solicitors working in non-LSA regulated firms that are equivalent to those on SRA regulated firms. We cannot impose requirements on firms we do not regulate. We are aware that this could be considered an unfair burden on regulated firms that will not exist for non-regulated providers. We aim to make our proposals proportionate and so minimise any burden on regulated firms. For example, we have built some of our proposals around the current processes we have in place to collect data from firms. However, we believe that consumers value and will use the information we propose to mandate firms to publish to make purchasing decisions. If this is correct, it follows that publishing the information will be a competitive advantage for regulated firms, and that unregulated firms will come under pressure to publish similar information to compete.
  8. In this context it will be important for consumers to be able to distinguish between regulated firms and others. Our proposals in relation to a digital badge, our revised register and the information firms will be required to display on their websites will help people to do this by marking out regulated firms more clearly. In addition, this consultation also contains proposals on the information that solicitors working in non–LSA regulated firms will have to give clients about regulatory protections in order to reinforce that message.

The Competition and Markets Authority's legal services market study

  1. In December 2016, the CMA published its final report on the legal services market. It concluded that competition in the market is not working well and called for consumers and small businesses to be given access to more information to help them navigate the market and make informed choices when purchasing legal services.
  2. The CMA stated in its report that: "legal services providers require expert knowledge and skills which consumers of legal services typically do not hold. As such, consumers may be unable to judge the quality of the service provided". 2
  3. They went on to state that this imbalance can sometimes give rise to significant consumer protection issues by creating incentives for providers to either 'gold-plate' their services to charge more, or to cut corners to appear more competitive on price.
  4. The report also concluded that:
    • competition in legal services for individual consumers and small businesses is not working well. These consumers generally lack the experience and information they need to find their way around the legal services sector and to engage confidently with providers.
    • consumers find it hard to make informed choices because there is very little transparency on the services offered. In particular, there is not enough information available on price, quality and service to help those who need legal support choose.
    • this lack of transparency weakens competition between providers and means that some consumers do not obtain legal advice when they would benefit from it.
    • obtaining the right service at good value can therefore be challenging as consumers can face wide variations in the cost of similar services. They can also struggle to find enough information to help them identify their legal needs in the first place.

Our discussion paper on regulatory data and consumer choice

  1. In October 2016, we launched a discussion paper, Regulatory data and consumer choice. 3 In it we considered what information we should publish about individual solicitors and the firms we regulate, and what information we may require solicitors and firms to provide to consumers themselves. We asked people for their feedback and received a variety of responses, which we have analysed and considered.
  2. We have used these responses, the CMA findings and our own research and engagement to help shape these proposals. We know that some businesses are already transparent on price and offer consumers a description of services. For them, our proposals will look like business as usual. However, we also know that this is not the case for all firms, and agree with the CMA's overall conclusion that further progress on price transparency is needed in the legal services market. 4

Feedback to our discussion paper

  1. In our discussion paper, we asked for feedback on several categories of information. We asked whether it would be beneficial for consumers to have access to this information when choosing a legal services provider. We have considered feedback on this when drafting our proposals in this consultation paper. The table below shows the categories included in the discussion paper and where they fit in with our proposals in this consultation.
Category of data SRA register SRA to publish outside of register Firms required to publish No proposals to publish
Basic regulatory information
Enforcement action
Areas of practice
Complaints
Insurance details
Price information
How to complain
Protections in place if things go wrong
Descriptions of services provided
Insurance claims data
Quality information
Specialism
Service delivery information
  1. At Annex one we explain why we are not consulting on the mandatory publication of insurance claims, or on requiring publication of quality information (such as accreditations), areas of specialism and service delivery information (such as opening hours).

The Legal Services Consumer Panel's annual tracker survey

  1. In its 2017 consumer tracker survey, the LSCP found that only 27 percent of people shop around when purchasing legal services. Although this is an improvement on 2011 (19 percent) it is still relatively low. 5 When choosing legal services, most people still rely on recommendations from friends and family or their own previous experience. In other areas, such as choosing a mortgage provider or a school, consumers generally have a good awareness of key things to compare, such as price or Ofsted rating. However, there is very little information available to help consumers of legal services compare key factors.

Benefits: how our proposals will help consumers

  1. The public and small businesses should be able to make more informed choices when choosing a legal services provider. Engaged consumers making informed choices about their legal services provider should help stimulate innovation and competition in the market. The CMA and the Legal Services Board (LSB) agree that the lack of information available to help people compare different legal services providers is a significant barrier.6 In addition, there is also evidence that cost or the perception of cost is a key barrier. When people handle legal issues without help from a solicitor, it is often because they think it would be too expensive or offer poor value for money. Research has shown that 63 percent of adults and 83 percent of small businesses see legal services as unaffordable.7 If more information is made accessible, it will help to address the information asymmetry that currently exists in the market and allow consumers to make more informed choices.
  2. Small businesses in particular should find it easier to seek legal advice. Most businesses have little contact with legal providers and more than half of businesses that experienced a problem tried to resolve it on their own. When advice was sought, accountants were consulted more often than lawyers. 8 The CMA report 9 is clear that a lack of information contributes to an uncompetitive legal services market. We share the CMA's view, and have a statutory obligation to promote competition in the market. Without accessible information, competition in the legal market is restricted and purchasers are at a disadvantage. The outcome is that their legal needs are often unresolved and unmet.
  3. The public and small businesses should be able to obtain this information easily. One way this might improve is through comparison websites for legal services, which are still developing. Our current Law Firm Search offers some accessible data for the growing number of legal comparison websites. However, we need to do more to encourage a much higher percentage of people to actively compare different providers when choosing legal services. We want consumers to understand their options, be able to compare them and therefore make better quality choices between which legal services provider they choose.
  4. The public and small businesses should have important information about their solicitor or law firm before they instruct them, rather than when they have already instructed them. Therefore, wherever possible, we aim for consumers to be provided with information early enough to affect their choice and not just, as is currently the case, at the point when they have already engaged a firm and are being sent a client care letter. We also want people who currently do not use solicitor services to have better information to enable them to consider doing so in future. We have outlined the potential impacts of our proposals in our initial impact assessment.

Benefits: how our proposals would help solicitors and law firms

  1. Clear information on regulatory protections should place firms we regulate at an advantage, compared with firms who do not have these protections. It will also help increase consumer awareness of what it means to go to a regulated provider.
  2. Clear information on price, types of services offered and regulatory protections should encourage small businesses and other consumers to approach the firms that are regulated legal services providers to resolve legal problems.

Acknowledging challenges

  1. We acknowledge that our proposals present some challenges. However, we have thought about these challenges and ways in which to mitigate or overcome them.
Challenge Mitigating this challenge

Making sure the information we publish is not intimidating or confusing for consumers.

We will present and explain our information in an accessible way. The aim of publishing our information is to help people choose a legal services provider or validate their choice.

We will work with the third parties that re-publish our data to make sure they can access it easily.

We will contextualise complaints data to help people to understand and interpret it.

Consumers are not fully aware of protections that apply when purchasing legal services, or the difference between regulated and unregulated providers.

Our digital badges will help consumers understand the protections that apply to firms we regulate.

We will require solicitors in non LSA-regulated firms to explain the regulatory position including the absence of compulsory PII when engaging with clients.

We will work with stakeholders and use Legal Choices, the joint regulators' consumer information website, to help the public understand the protections available to them.

Solicitors and firms we regulate will be burdened by the requirements.

We will proceed in a phased way with price and service publication requirements beginning with a small number of areas and gauging the impact.

We will provide price publication guidance to support firms to publish price information in a consumer-friendly way.

We will publish the complaints data, rather than asking firms to do it. Our digital badge scheme will not require significant firm resources. We intend to use a low-cost option which still provides a high level of security.

  1. Our impact assessment sets out the problems our proposals aim to address. We have also listed the potential benefits, potential risks and mitigations against these risks in more detail. In table two of the impact assessment we provide an overview of the benefits and challenges to the legal services market, solicitors, firms and consumers of each of our proposals.

Section one: Asking firms to make more information available to consumers

  1. There is some information that we think firms are best placed to publish on their websites, mainly as it will help people and small businesses to choose a legal services provider. Early access to information will help consumers make informed purchasing decisions and better understand the service they are buying.
  2. We have considered the CMA's findings and the responses to our discussion paper when developing our proposals. We propose that the following information should be published on firms' websites:
    • price (initially limited to a small number of services)
    • a description of the services provided (initially limited to the same areas as price)
    • that a firm is regulated by us, and its SRA registration number
    • protections available to the consumer
    • how to complain.
  3. By their nature these requirements will only apply to firms we regulate, as we cannot impose requirements on those we do not regulate. Solicitors working in firms regulated by other LSA regulators, such as the Council of Licensed Conveyancers (CLC) and Bar Standards Board, will have to comply with the entity requirements of those regulators. At paragraphs 121-129 we discuss how these requirements work with our decision to allow solicitors to practise in non-LSA regulated firms when the new regulatory framework takes effect.
  4. For multinational firms, these requirements would only apply to their UK website, or the UK facing section of it. Firms that do not have a website would have to make sure that they can provide the information to the public on request without requiring a consultation. According to a recent survey we carried out, 83 percent of firms who answered have a website, and another 6 percent are developing one. We think, therefore, that the overwhelming majority of firms will be able to comply with the proposals in this consultation by website publication.
  5. Our proposals do not aim to limit the information that firms can publish on their websites, they just seek to set some minimum requirements. Nothing in our requirements prevents firms from publishing additional information that benefits consumer choice. For example, firms are free to publish information on accreditations their staff hold, customer feedback and accessibility information. We encourage firms to do this.

Price publication

Background

  1. Under the rules in the current Code of Conduct, solicitors and firms must provide information about the likely cost of their services at the point of engagement. This helps clients understand the cost of the work, but it does not help consumers to compare the prices of different providers before the point of engaging with a firm.
  2. The CMA has recommended that firms should be required to display price information in a prominent way. It is important that the information is accurate, understandable and comparable. Consumers should be able to get an understanding of the cost of the service they are looking to purchase. 10
  3. Last year, the LSB commissioned research into the price of individual legal services in the areas of conveyancing; divorce; and wills, lasting power of attorney and estate administration. The research asked legal services providers to price a standard scenario. The findings of this research were that prices vary significantly for some common legal services, meaning it pays for consumers to shop around. 11 The cost of services and reputation of the provider are the most important factors to consumers when searching for a solicitor. 12 However, 63 percent of the public do not believe that professional legal advice is an affordable option for ordinary people. 13 The lack of transparency on price may therefore act as barrier to people accessing legal services and a barrier to competitive pricing among firms. Many of the complaints that the LeO receives are about the cost of legal services. These could be avoided by providing clear, upfront and transparent price information. 14 Therefore proposals that focus on transparency require a firm-wide public facing approach should assist in reducing complaints.
  4. The LSCP has found that consumers can be disadvantaged in the legal services market by an imbalance of information and that consumers cannot be empowered to fully participate and in turn drive competition without price transparency. 15 This, and the fact that consumers do not tend to shop around, suggests that so far there has been a lack of incentive for firms to address the imbalance.
  5. There is very little information about the price of legal services available to consumers and small businesses to help them compare and choose a legal services provider. The LSB study found that only 17 percent of firms advertise price online. 16 This, together with recent research findings that 77 percent of consumers do not shop around when looking for a legal services provider, 17 suggests that there is a lack of information in the market that need to be addressed.

Our approach

  1. We propose requiring firms to publish on their websites information on the cost of some legal services. The initial services we think could benefit from such transparency on price are set out in the table at paragraph 39. These are focused on the legal services that individual consumers and small business consumers commonly want to purchase. The CMA's market study also focused on many of these areas.
  2. We will most likely begin by asking firms to publish price on three to four of the consumer facing services and two of the small business facing services. There would be clear advantages to choosing residential conveyancing as one of the first services, as this would be an area where we could work jointly with the CLC on arrangements that will cover almost the entire conveyancing market.
  3. Starting off with a small number of legal services allows us to evaluate and address any issues or concerns encountered by firms. We can also to refine our requirements to make sure they meet the needs of consumers and are straightforward for firms to comply with.
  4. Proposed legal services:
For consumers For small business

Residential conveyancing (limited to sale, purchase, and remortgage)

Family - undefended divorce and financial disputes arising out of divorce

Drafting of a will

Probate/Estate administration

Drafting of a lasting Power of Attorney

Motoring offences

Employment tribunal

Personal injury claimant

Employment tribunal

Debt recovery

Licensing applications in relation to business premises

  1. At annex two to this consultation we have provided an example of what the price transparency guidance might look like. This guidance includes proposed definitions of each of the areas in the table. We welcome comments from respondents on this and how they consider we could most effectively break down the areas to enable clear and understandable price information to be given.
  2. Starting with a select number of areas could result in the market responding more broadly to our requirements. This could lead to greater price transparency in areas of practice where we have not mandated it. As part of our ongoing commitment to evaluate the impact of our proposals, we will look at whether this happens, and decide whether it is therefore necessary to expand our requirements to other types of legal services.
  3. We welcome views on which of the services in the table above are the right ones for us to focus on initially.
Why these services?
  1. We have chosen these areas of legal services for these reasons:
    • They are common areas where individuals and small businesses need legal help and are likely to compare prices.
    • Although there are many examples of good practice there is not universal price transparency offered in all these services and the methods of setting out prices vary considerably. Some firms include extra costs such as disbursements and VAT and some not. This makes it hard for consumers to find comparable information. Our proposals aim to accelerate the pace towards universal price transparency.
    • Some of these services are relatively commoditised compared to other legal services. This will make it easier to provide price transparency.
    • Although some of the most vulnerable consumers have needs in other areas of law, such as asylum, housing problems or mental health law, these are areas where services are more likely to be provided either by the not-for-profit sector or at legal aid rates. Therefore, the role that price comparison can play is significantly reduced.

What might price transparency look like?

  1. Prices can be charged in several different ways – whilst 100 percent certainty will often not be possible when giving a price estimate, we want clients to be given the best information available. Whilst the use of fixed fees is now common in legal services, in some areas we understand that firms will not always be able to provide an exact figure, or sometimes even an estimate before having had an initial discussion with the client. We want firms to strive to provide price information which is as accurate as possible and we are clear that providing inaccurate information would be worse than providing none at all.
  2. We propose the following principles.
    • Whichever way prices are shown, the total cost should be shown where practicable. This must include disbursements and VAT.
    • Appropriate instant online calculators or quote generators can be used to provide price transparency in some areas of legal services.
    • However, where it is not practicable to give overall costs at the beginning, any costs that are known such as hourly rates, fixed fees for certain elements, the charging basis for any unbundled services etc. should be stated. It will be good practice to list factors that could increase or decrease overall costs.
    • The cost of likely or typical disbursements should be stated, together with a brief description of what the disbursement covers (if this is not obvious from the name of the disbursement). Where it is not practicable to give precise costs of disbursements at this stage (e.g. expert reports) then the type of disbursement should be described and a range of costs provided where this is possible.
    • Any likely exceptions to the prices shown should be explained.
    • Where charges will attract VAT this must be stated.
    • If a fixed price is quoted, it should be clear what the price includes and excludes, and in what circumstances (if any) it will be exceeded.
    • If conditional fee or damages-based agreements are available, then the circumstances in which clients may have to make payments themselves (including from any damages) should be explained.
    • If an hourly rate is shown, then average costs or a range of average costs for the type of matter should be quoted where this is practicable and where to do so would not be misleading Any variation of the hourly rates, for example, based on who provides the work at the firm should be set out.
  3. Any work that is funded by the Legal Aid Agency would be excluded from the price publication requirement. These payments will be excluded because legal aid rates are set by Parliament and are not subject to competition in the market in the same way as other services.
  4. We recognise the challenges that some firms providing these legal services may face with price publication. To support firms, we will produce guidance and resources to help them, for example, templates. The CMA has already published examples of price transparency in its report. 18 The Law Society has produced a price and service transparency toolkit 19 which can be helpful to firms when considering how to publish prices.
Challenges with price publication
  1. Price information should be made available in an accessible and comparable way. Our requirements do not seek to mandate how firms should calculate their prices or what pricing model they should use.
  2. The nature of some areas of legal work means that it can be difficult to provide exact information. In some cases, the matter needs to be discussed with the client before providing an estimate. In other cases, the price may well be driven by matters beyond the control of either the firm or the client, such as the behaviour of third parties. In such circumstances, providing overly precise statements of costs upfront may even be misleading.
  3. We are aware that price alone tells the consumer nothing about quality. However, price publication may help address views that legal services are not affordable. Firms are of course free and are encouraged to provide any additional information they want on the quality of the service they provide, going above what the proposed requirements ask. 20 This might include accreditations achieved by the firm or staff showing expertise or commitment to quality, links to reviews on third party websites etc.
  4. Information on price combined with clearer information about the protections regulated firms offer could assist clients in seeing the advantages of using a regulated firm. Where firms charge significantly different prices for the same type of service, consumers will be able to question why.
  5. As the market becomes more competitive, there is a risk that firms will offer 'bait pricing', ie offering unrealistically low prices which will not be available in practice. Any such behaviour will be a breach of our proposed principles of price transparency as well as the duty in the new Codes of Conduct for publicity to be accurate and not misleading.
  6. We recognise that there is a risk that some firms will start colluding on price. However, we do not think that there is a high risk of this occurring in the legal services market, given the large number of providers. The CMA reached the same view when considering the issue. 21 If collusion did happen, it is likely that it would be unlawful behaviour. The CMA has issued guidance that firms can use to make sure that they are fulfilling their competition law obligations. 22

Question 1

In which of the services suggested do you think we should proceed initially with requirements for price publication and are there any other additional categories that we should consider?

Question 2

Do you agree with our proposed principles of price transparency?

Large commercial clients

  1. The CMA report focused on whether the legal services market is working effectively for members of the public and small businesses rather than large commercial clients who are often better positioned to make informed purchasing decisions. There are SRA authorised firms (both large and small) that focus completely on dealing with those large corporate clients (with perhaps some work carried out for high net worth individuals) and in those cases requiring the publication of price would perhaps serve little useful purpose. The areas of service proposed are selected based on a focus on issues most affecting individual consumers and small businesses (we have not, for example, suggested corporate merger work or commercial work generally) which would generally mean that such firms would not be subject to the price requirements or to the linked service description requirements (see below). The intention behind our proposals is not to exempt any category of firm from our publication requirements. The focus is on services consumers and small businesses commonly use, and not, for example, on the size of the firms that provide these services.
  2. However, there may be circumstances in which firms that normally do not serve the consumers on which the CMA report is focused might occasionally carry out work that could be included in price description requirements (for example employment tribunal cases for large commercial clients or family work for very high net worth individuals only) and we would welcome views on whether there should an exemption in such cases and how any such exemption should be framed.

Question 3

Is there a need for any specific exemption from the price publication proposals for firms dealing exclusively with large commercial clients? If so how should any exemption be defined and operate?

A description of the services provided

Background

  1. The CMA recommended that we should ask firms to publish a description of services provided on their websites. This information should include details on the different staff who deliver services, a timeline showing when key stages of the work will be completed, and any factors that could affect these. By providing this context, consumers can assess and compare what different firms offer. Many firms already do this.
  2. As with publishing price, we think that we should proceed gradually, and impose minimum standards that are straightforward to comply with. Firms that do not offer sufficient information for consumers to make a choice are likely to lose out to firms that do.

Our approach

  1. We propose requiring firms to provide a description on the same types of legal services as they provide price information about. This will assist consumers in understanding what they are purchasing.
  2. Our proposal in this area sets out what we think the minimum standard for publication should be. Firms will of course have the option to add further information should they wish and we would encourage them to do so. For example, firms could choose to highlight expertise that solicitors in their firm have, such as areas of specialism or languages spoken, or customer feedback and reviews.
  3. The information we propose firms publish is:
    • a clear, brief description of the relevant services
    • a brief description of any key stages of the services.
    • indicative timescales and any affecting factors, if possible
    • information about the different staff that deliver the services in the area. This should, as a minimum, include the experience and qualifications of the staff that carry out the work and those that supervise the work.

Mix of staff delivering the service

  1. We recognise that for firms where multiple people may work on a particular matter, to provide information about all those involved may be too onerous. In this case, it may be appropriate to state the broad level of experience or typical qualifications of staff carrying out the work and state who is responsible for overall supervision.

Indicative timescales

  1. The nature of the stages of service and timescales involved can vary significantly across different services. For example, in a property purchase this might simply include the timing of different elements (such as conducting searches or the delay between exchange and completion). However, the timetable may also depend on the complexity of any 'chain' and the timeliness of other parties in providing relevant information, such as replies to pre-contract enquiries. In contrast, in a litigated dispute a firm might set out the stages of a claim, from an initial letter, through to pre-action correspondence and filing a claim with the court as well as typical waiting periods for a court date and phases of a court hearing (such as case management).
  2. Firms could meet our requirements by providing an average time, or the average range of time, that the bulk of matters of this type will take. We recognise that in many cases, particularly those involving litigation, this may not be practical. Nevertheless, where the matter includes a number of stages, these should be briefly explained.
  3. In some legal services, the duration of the service may be determined by the actions of another party. Where this is the case, appropriate contextual information may need to be provided to the public so they are clear about what to expect should they choose to go ahead.
  4. In other areas, for example drafting a will, the time taken from receipt of full instructions will be more under the firm's control. In these instances, firms might choose, for example, to publish their targets for completing such work.

Question 4

Do you agree with our proposals to introduce requirements in relation to description, staff, stages and timescales in any legal services where we decide to require price publication?

Section two: Regulatory status and protections

  1. This section sets out our proposals to improve the information firms we regulate make available. It is important that consumers understand the way in which the organisation and individual solicitor they use is regulated. We want consumers to be made aware of what protections are in place and what it means to choose an SRA regulated provider.

Background

  1. The CMA found that most consumers do not know whether their provider is regulated, and looked at the implications of this for consumer protections. 23
  2. The requirements in our current Code of Conduct 24 and new Code for Firms 25 ask firms to provide information on regulatory protections, such as access to the LeO and how to complain, only at the time of engagement and onwards.
  3. We think it is important that consumers are made aware of what protections and remedies are available to them from an SRA regulated firm at an earlier stage. This will help consumers make an informed purchasing decision between any firms we regulate and other types of provider. Firms making this information more openly available should help increase general consumer knowledge of what protections and benefits come with choosing an SRA regulated provider.

Our approach

  1. We propose requiring firms to publish on their websites:
    • that the firm is regulated by us. To do this, we propose developing an SRA regulated logo which will also operate as secure digital badge.
    • that consumers may be eligible to submit a claim to the compensation fund, and to promote visibility of the compensation fund by using a SRA Compensation Fund logo.
    • that the firm has PII, and that it complies with our MTCs (including the amount of the minimum level of cover), the contact details of their insurer (or insurers if more than one) and the territorial coverage of the insurance;
    • details of the firm's internal complaints procedure
    • how and when clients can make a complaint to LeO.

    firms without websites must make the information available to the public on request without the need for a consultation.

  2. Below we have outlined these proposals in turn.
  1. We currently require firms to tell people about their regulatory status and to use the phrase "authorised and regulated by the SRA" on letterheads, websites and emails. This requirement can be found in outcome 8.5 of the current Code of Conduct.
  2. The use of logos to show whether a service provider is regulated is common practice in other regulated areas, for example within financial services. The Financial Conduct Authority (FCA) and the Prudential Regulation Authority ask all the firms they regulate to tell new and existing customers that the Financial Services Compensation Scheme (FSCS) protects their deposits. The "FSCS protected" badge is displayed on materials available in branch, online and on all letters to customers. The badge is intended to increase awareness of the FSCS and to increase consumer confidence in financial services.
  3. We are proposing to introduce an SRA logo for promotional and printed materials and window displays etc, to confirm that we regulate the firm. The use of the logo would only be available to SRA regulated firms. Solicitors working in non-LSA regulated firms would not be allowed to use the logo.
  4. We propose to develop an electronic version of the logo as a digital badge that clients can click on to verify that the website belongs to a genuine, SRA regulated firm. This will be similar to the scheme recently introduced by the CLC. 26 We consider that such a step is important in an area where online fraud and the use of fake websites are becoming more common. 27
  5. To make the digital badge fully effective, we propose that all firms we regulate will display this on their websites. On other media (such as printed materials), firms will be able to choose to use either the logo or the current phrase "authorised and regulated by the SRA". We realise that for the logo to work it will need to achieve consumer recognition. We will work with consumer groups to communicate that the badge means a firm is regulated by us, and that the firm offers protections that non-regulated organisations do not provide.

  6. We are also proposing that firms should publish their firm SRA number on websites and printed materials. This information can help consumers identify if their provider is regulated or not.

Question 5

Do you agree with our proposal to introduce an "SRA regulated" logo and digital badge?

Question 6

Do you have any suggestions as to how we can best increase consumer awareness of the logo?

Access to the Compensation Fund

  1. Eligible clients of regulated firms can submit a claim to our Compensation Fund in the event their money is misappropriated or otherwise lost and claim is not covered by PII. Research has shown that clients are often not aware of the existence of protections such the Compensation Fund. 28
  2. We are aware that some clients (for example large corporations) will not be eligible to claim on the fund, and that those who are eligible to submit a claim may be refused. The purpose of the fund is to be a fund of last resort. In this respect, the solicitor's compensation fund differs from other schemes such as the FCA's compensation scheme where entitlement is automatic once the eligibility criteria are met. However, as mentioned above, we know that public awareness of the existence of the fund is low. We have therefore developed a proposal to help increase public awareness.

Compensation Fund logo

  1. As set out above, we plan to provide additional support to consumers in understanding the different protections that may be available through developing a 'SRA regulated' logo. In addition to this, we also propose to develop a second logo which denotes access to the Compensation Fund.
  2. The use of this Compensation Fund' logo will be restricted to SRA regulated firms, as clients of solicitors practising in non-SRA regulated firms will not be entitled to claim on the fund. However, we propose to make it voluntary for firms to use this logo. Firms that do not want to use it can instead provide information as to the existence of the fund in writing on their website and communication materials where they have clients that may be eligible to claim on the fund. We will supply a standard wording in guidance for this purpose.
  3. In our October 2016 discussion paper, we asked respondents for their views on the use of logos. Most respondents chose not to give a view on our proposal to introduce a logo that denotes access to the Compensation Fund. Those that did respond were split in their views. Those that supported the introduction of a Compensation Fund logo thought that consumers would be further reassured that protections applied in case of something going wrong.
  4. Those that did not agree with the introduction of a Compensation Fund logo suggested that it would further increase consumer confusion rather than help them understand what protections apply.
  5. We think that a Compensation Fund logo will act as both a signpost for clients that they are protected if things go wrong and will increase general consumer awareness of the existence of the fund. Increased awareness of consumer rights has been one motivating factor behind the development of the FSCS logo.
  6. We have considered developing one single logo which denotes both SRA regulation and access to the Compensation Fund. We think it is better to have two logos, as the two do not always overlap. There are clients, for example businesses with a turnover of over £2m that cannot claim on the fund.

Question 7

Do you agree with our proposal to introduce a requirement to publicise the existence of the Compensation Fund and a voluntary logo?

Professional indemnity insurance

  1. Under our current rules, we do not require firms to tell clients or potential clients about their insurance cover and what protections are available to them if things go wrong, unless asked by the client. They do need to have PII cover in place.
  2. However, firms must tell clients if they discover an act or omission by them that could give rise to a claim. They also must disclose details of the compulsory element of the insurance (the MTCs) on request.
  3. We propose that firms will have to disclose:
    • that they hold PII to the MTCs and specifying the minimum amount required 29
    • the insurer's contact details
    • the territorial coverage of the insurance. 30
  4. We propose requiring firms to publish this information in a way that is simple and easy for consumers to understand.
  5. We do not propose requiring firms to disclose the full details of what PII cover they hold, as this information is considered commercially sensitive by some firms. We also consider it unlikely that most individual consumers or small businesses would seek legal advice that requires their provider to hold PII above the MTCs.

Question 8

Do you agree with our proposals on the publication of PII details?

How to complain to the firm and to the Legal Ombudsman

  1. In addition to publishing information on the firm's first-tier complaints process, we propose that firms must also publish details of the rights of clients and any other relevant parties, such as prospective clients, 31 of their right to complain to LeO (second-tier complaints), the time frame for doing so and full details of how to contact them.
  2. This should help consumers understand what their rights are and that they can complain if they are unhappy with the service they receive from a firm.
  3. In summary, we are therefore proposing requiring firms to publish on their websites the following information: 32
    • the name of the person in the firm that a complaint should be made to
    • how a complaint should be made
    • how the complaint will be dealt with, such as timescales
    • if the complainant 33 can refer a complaint to LeO, including the time frame for doing so and full details of how to contact them
    • the name of the person in the firm with overall responsibility for complaints (if different).
  4. We will support firms in meeting these requirements by providing example templates of how this information could be presented.

Question 9

Do you agree with the proposal for firms to publish details of how to complain?

Question 10

Do you agree with our proposal that firms should publish details of how to complain to the Legal Ombudsman?

Section three: Creating a digital register

  1. We already publish regulatory data, but it is published in several different places, making it hard to get an overview of the information we have about a particular firm or solicitor. For example, our current Law Firm Search can be used to find information about firms we regulate, but anyone wanting to find information about a specific solicitor's record needs to use a different search service on our website. We also have a separate register of alternative business structures (ABS) and produce a separate list of people recently admitted to the roll of solicitors.
  2. We are currently redeveloping our website. As part of that, we intend to bring together all the relevant information we hold on solicitors and firms into a digital register. The register can be used to verify the firms and individuals we authorise. We already share data with re-publishers, such as comparison websites, and we will continue to make our data available.
  3. The register will be divided into two main sections.
    • All individual solicitors on the roll, registered European lawyers (RELs) and registered foreign lawyers (RFLs) regulated by us. 34
    • Firms we regulate.
  4. The register will also contain information about disciplinary findings against other regulated individuals (such as employees of SRA regulated firms) or former regulated individuals.
  5. We see several uses for the information we propose to publish in our digital register and elsewhere.
    • Consumers will be able to validate their choice of SRA regulated firm and will be able to carry out basic checks, for example to find out whether we have taken any disciplinary or regulatory action against the firm or individual.
    • Re-publishers can build on the data they extract from our register and elsewhere on our website to produce a product that will help consumers choose legal services. Some of this information will be available from firms' websites due to our new price and service transparency requirements set out above.
    • Solicitors and firms can use our register to validate the practising status of other solicitors (for example before they decide to employ them) or firms, as can other third parties, such as banks and insurance companies and other regulators.
    • To reduce digital crime by the combination of the above functions.
  6. We are not proposing to radically change the information that is already published but we do intend to publish it in one place and in a form that is much more accessible to those that will use it. Below we set out in more detail what we are proposing to include in the register.

Key regulatory data

  1. We will publish a range of key information on individuals and firms we regulate in our digital register. This will include:

    For firms:

    • the firm's name
    • the firm's authorisation number
    • the date we authorised the firm
    • any practising conditions we have placed on it
    • any trading names or former names
    • its practising addresses
    • whether its authorisation has been revoked or suspended
    • any other relevant regulatory and disciplinary decisions against the firm (see below).

    For individual solicitors:

    • the solicitor's name
    • the solicitor's authorisation number
    • whether they have a current practising certificate
    • any practising conditions we have placed on the individual's practising certificate
    • their practising addresses and whether the firm or firms concerned are regulated by the SRA, by another approved regulator or is not regulated under the LSA
    • whether they have been struck off or suspended from the roll
    • any other relevant regulatory and disciplinary decisions against the individual (see below).

    The same details as appropriate for RELs and RFLs.

  2. There are other categories of data about licensed bodies that we must publish. For example, under section 87(4) of the Legal Services Act, we have to publish the names of the Head of Legal Practice (HOLP) and the Head of Finance and Administration (HOFA). We will continue to publish these details for those legal services providers.
  3. The full list is included in our proposed Registers, Roll and Information Regulations contained at Annex 4. We have a statutory obligation to record much of this information, for example; the name of everyone on the roll of solicitors and everyone who has a practising certificate (PC) and to make this available to the public.
  4. Where an individual solicitor, REL or RFL is employed by or working in a SRA regulated firm we propose to link that individual to their employer on the register and vice versa.

Regulatory and disciplinary decisions

  1. Unless they have already had a previous interaction, consumers can find it difficult to assess quality when choosing a legal services provider. 35 Information on the regulatory and disciplinary action we have taken against firms and individual solicitors can offer consumers an indication of their provider's quality.
  2. We have a statutory obligation to publish some of this information. We currently publish a range of regulatory and disciplinary decisions where we consider it is in the public interest for us to do so. For example, in relation to individual solicitors, firms (and in some cases employees in firms we regulate), for example we publish decisions to:
    • fine or rebuke them
    • put conditions on their practising certificates or authorisations
    • refer them to the Solicitors Disciplinary Tribunal (SDT) and in due course the outcome of the SDT hearing (however, to access the SDT's full judgment, a member of the public would need to search the SDT website)
    • exercise our powers of intervention
    • disqualify a HOLP or HOFA from holding that position in a Licensed Body.
  3. We propose that we would continue to publish as part of our digital register the same range of regulatory and disciplinary decisions that we currently do, in accordance with our decision-making 36 guidance.
  4. However, we intend to bring together the existing information we have on enforcement action into our register, so that is available in one place. The information will be recorded against the relevant individual or firm.
  5. We will also, as now, continue to publish relevant decisions about regulated individuals who are not on the roll or our individual registers for RELs or RFLs because they are not (or are no longer) solicitors, RFLs or RELs. This will include employees who have, for example, been fined or who have been made the subject of an order under section 43 of the Solicitors Act 1974. A section 43 order prevents them from being employed by an SRA regulated firm without our prior permission.
  6. We also intend to publish a separate list of those solicitors that have been struck off or who currently have their practising certificate suspended. This information is already available on our website but not in one place. We propose to publish such decisions broadly in accordance with the current approach and time lines set out in our guidance on publishing regulatory and disciplinary decisions.
  7. This means that for certain decisions, such as when we have struck a solicitor from the roll or disqualified an individual from a specific role or imposed a condition on an annual practising certificate, we will publish that information for as long as it remains current. For example, indefinitely for a solicitor who has been struck off, for the whole duration of a fixed period of a suspension, or for the practising year relevant to the application of a condition.
  8. For decisions with no particular duration, such as an intervention, fine or rebuke, we will publish these as part of the register for three years.

Question 11

What are your views on the proposed content for the digital register?

Section four: Publishing areas of practice and complaints data

  1. When firms complete their annual return as part of the practising certificate renewals they submit information on the complaints they received and their areas of work. This means our proposal to publish this information will not introduce an additional regulatory burden on firms.
  2. We also considered integrating information on areas of practice and complaints data within the proposed register. However, the purpose of the register is to provide up to date, 'real time' information. The data we have on complaints and areas of practice will inevitably be historical. Our view is that it is best presented separately in a format that can be easily used by third parties, such as comparison websites.

Areas of practice

  1. We propose to publish data on the areas of practice in which a law firm practises annually, following the annual practising certificate renewal. We will do this separately from the register and in a format which includes all firms we regulate and is easily accessible to third party users. We will not publish any information on turnover. Although the information will show data from the previous year, we think it will be useful to third parties and consumers.
  2. If we implement this proposal, we will review and make sure the areas of legal services that we currently collect information about are fit for purpose.

Question 12

Do you agree with our proposal to publish annual information about areas of work and to do so separately from the digital register?

Complaints data

  1. Research carried out by the LSCP suggests that consumers would use complaints data when choosing legal service providers if that information was available. 37 The LSB in its response to the LSCP acknowledged that complaints data has the potential to inform consumer choice by indicating quality of service. 38 It also said that the increased availability of complaints data could drive improvements in service delivery from legal service providers.
  2. Our discussion paper sought views on who should publish complaints data if it were to be published. Almost all respondents, including firms, solicitors and consumer groups, called for us to publish the data rather than firms as it would:
    • reduce the risk of any potential confusion among consumers, as the information would be provided consistently
    • increase accessibility for consumers, with relevant information being provided in one place
    • reduce the potential for firms to present artificially positive complaints data
    • ease the administrative and cost burden on firms.
  3. We agree with these reasons and have decided that we are best placed to publish the data.

What are we proposing?

  1. We propose to publish first-tier complaints received, complaints resolved and complaints referred to LeO by firms. These are the categories of complaints data that we currently collect annually from firms but do not publish. The data therefore comprises complaints about service submitted directly to firms and does not include regulatory complaints submitted to the SRA. Our intention is to publish this firm collated data separately from the main register. We will also make it available for organisations that reuse data, in particular comparison websites.
  2. We propose to continue to use the definition of complaint in the practising certificate renewal form. The definition is:
  3. "A formal complaint to you (written or oral) raised under your organisation's complaint handling procedure and includes complaints made initially to a third party and referred back to you to address in the first instance. This does not include concerns raised by a client about your service provision but not taken forward as a formal complaint."
  4. We also recognise the risk that unjustified, repeat or vexatious complaints from a small number of clients could distort the figures for a firm. One way of dealing with this is for firms to only report a maximum of one complaint per client per matter for our purposes. We welcome views on this.
  5. As the complaints data would be publicly available, it could be used by third-party publishers, or firms on their own websites, to provide further context if they wish.
  6. We propose to publish data in the categories set out in the table below. These are almost identical to the categories for which we already collect data as part of practising certificate renewals. However, we have made some minor changes to make sure they more closely match the categories also collected by LeO. We have also removed any duplication.
Conduct Costs information deficient Costs excessive Criminal activity Data protection/breach of confidentiality
Delay Discrimination Failure to advise Failing to comply with agreed remedy Failure to follow instructions
Failure to investigate complaint internally Failure to communicate Failure to keep papers safe Failure to release papers Other
  1. A key theme raised by all respondents to the discussion paper, particularly from firms, is that raw complaints data could be unhelpful without explaining what the data means. This view was also supported by the consumers we engaged with.
  2. Respondents felt that, without sufficient context, the data would not:
    • provide a reliable indicator of quality of service
    • address the complexity of the issue against which a complaint has been made, nor the quality of redress
    • be meaningful or accessible for consumers.
  3. We are keen to hear respondents' views on what further information it would be appropriate to collect and publish to provide context. We recognise that raw data on complaints has little merit without context and recognise that the context may be best provided by SRA, law firms or a third party. It is important that any information is straightforward, so that consumers can understand it and there is consistency. This could be, for example, the total number of legal matters a firm has undertaken in the year. We could also publish the complaints data by category of areas of practice, recognising that complaints tend to be higher in some categories than others. To provide context, we would need to ask firms to provide us with this additional information.
  4. LeO already publishes data on the complaints it handles. We intend to provide a link through to this data, to make it more accessible for consumers.
  5. If we can make complaints data available, we will help facilitate the development of digital comparison tools (DCT). The CMA is currently undertaking a year-long market study on DCTs. The study does not specifically focus on legal services, but includes some reference. 39 The final report is due to be published at the end of September 2017. The findings of the study will help inform our final proposals in this area.
  6. Publishing complaints data should incentivise firms to publish their own data and provide appropriate context to give positive quality signals. This could for example be what action the firm takes when a complaint is received. Firms can of course also include positive feedback such as ratings and reviews the firm has received on sites such as Trustpilot, and details of how they monitor and react to feedback.
  7. We are seeking views on how many years of complaints data we should publish if we proceed with this proposal. We consider that three years of data will be sufficient to provide a pattern, without being overly historical. Data will be published annually following practising certificate renewals and our thinking is to build up the data. We will therefore publish one year's data in year one of implementation, two years in year two etc such that from the fourth year of implementation the last three years of complaints data will be publicly available for each firm at any one time. 40 We think that three years is enough time to provide context that would not be provided if we only published the data for one year at a time. For example, the data could indicate an improvement in a firm's services by showing a decreased level of complaints received by the firm.
  8. We recognise that the argument as to whether to publish firm collated, first tier complaints data is a balanced one. Whilst this data may be an important quality signal for consumers, there may be a risk that publication will encourage some firms to keep matters out of their complaints system. This may be counteracted by the proposal for firms to publish details of their complaint system on their websites which will encourage the use of that system. More widely however, it will be difficult for us to ensure the consistency of first-tier data given that the complaints will not have been filtered by the SRA. We would welcome views on these issues.

Question 13

Do you agree with our proposed approach to publishing complaints data, and if you do not agree, what do you propose?

Question 14

If we do publish first-tier complaints data, what (if any) context should we provide?

Section five: Individual solicitors working outside LSA-regulated firms

  1. One of the key changes of our 'Looking to the future' programme is allowing solicitors to provide non-reserved legal services to the public outside of firms we regulate. This will provide consumers with increased choice, enabling them to more easily access qualified, regulated solicitors at a cost they can afford. These solicitors will be regulated as individuals and will have to comply with our Code of Conduct for Solicitors, RELs and RFLs.
  2. It is important to us that clients of these solicitors receive the same quality of service that they would from solicitors working in regulated firms. However, these clients will not be entitled to all the protections that solicitors working in regulated firms can offer.
  3. For example, there will be no mandatory insurance requirement and clients of solicitors working in non-LSA regulated firms will not be eligible to make a claim to our Compensation Fund if things go wrong. It is worth noting that these solicitors will not be allowed personally to hold client money in their own name. 41

Our approach

  1. Under our rules, solicitors working in non-LSA regulated firms will not be required to have personal PII in place. This will ordinarily be a matter for the organisation the solicitor works for. However, we propose that clients of solicitors in non-LSA regulated firms must be informed at the point of engagement that those solicitors are not subject to the requirements for mandatory PII that would apply in an SRA regulated firm. This will create an incentive for the non-LSA regulated firm to explain their insurance position to clients.
  2. We also propose that clients of Solicitors in non-LSA regulated firms must be informed at the point of engagement that the potential protections of the Compensation Fund do not apply,
  3. Standard 8 in the new Code of Conduct for solicitors, RELs and RFLs requires all solicitors, regardless of where they practise, to provide certain information to clients. This includes details of how to complain, including how to complain to LeO.
  4. In addition, all solicitors have a duty under standard 8.10 to make sure that clients understand whether and how the services they provide are regulated. This includes:
    • explaining which activities will be carried out by them, as an authorised person
    • explaining which services provided by them, their business or employer, and any separate business are regulated by an approved regulator
    • making sure that they do not represent any business or employer which is not authorised by the SRA, including any separate business, as being regulated by us.
  5. Additionally, standard 8.11 requires solicitors to make sure that clients understand the regulatory protections available to them.
  6. Solicitors working in firms that we do not regulate will, therefore, need to provide information on their regulatory status in a different way than those working in SRA-regulated firms. This means that these solicitors will need to provide information face-to-face or in writing on their regulatory status when engaging with clients and potential clients.
  7. These proposals will not apply to solicitors working in special bodies – since they are subject to requirements to hold PII that is reasonably equivalent to the MTCs and their clients are also entitled to claim on the Compensation Fund.

Question 15

Do you agree with our proposal to require solicitors working in non-LSA regulated firms to inform clients of the absence of the requirement to hold compulsory PII?

Question 16

Do you agree with our proposal to require solicitors working in non-LSA regulated firms to inform clients of the absence of the availability of the Compensation Fund?

Section six: the draft rules and enforcement

  1. We propose to give effect to these proposals in our new draft SRA Register, Roll and Information Regulations, which are available at annex 4. These mainly reflect the statutory obligations we are already under to maintain and make available to the public the roll of solicitors and the registers of RELs, RFLs and authorised bodies. We have however made clearer in these rules the information the roll and registers will contain and what we will publish. The rules also contain our new proposals for firms to publish information on their website.
  2. Enforcement of the proposed requirements in this consultation will take place in accordance with our proposed enforcement strategy. 42
  3. To make sure that consumers obtain the information they need to help them choose legal services and, there is a level playing field between firms, it will be important that firms comply fully with these obligations when the rules come into force. We propose to give firms help and guidance well in advance of the introduction of the requirements so they understand how to comply.

Question 17

Do you have any comments on the drafting of our rules?

Question 18

What more does the SRA need to do to work with others such as third party intermediaries to deliver improvements in the information available to consumers?

Question 19

Do you have any further information to inform our final impact assessment?

Our next steps

Consultation dates

This consultation is running from 27 September until 20 December 2017.

Our decision

Once the consultation closes, we will analyse responses and then decide what proposals we need to take forward. We will evaluate and monitor the impact of the proposals once implemented.

Publishing responses

Please note that, unless otherwise stated, we will publish responses to our consultations.

Implementation dates

Implementation of any of these proposals will not be before Autumn 2018.

Working with other regulators

We will continue to collaborate with other regulators as set out in our CMA action plan. This will include working towards the longer-term goal of a joint digital register.

All consultation questions

We are keen to hear your views on our proposals set out in this consultation. An uninterrupted list of our questions is below.

Question 1

In which of the services suggested do you think we should proceed initially with requirements for price publication and are there any other additional categories that we should consider?

Question 2

Do you agree with our proposed principles of price transparency?

Question 3

Is there a need for any specific exemption from the price publication proposals for firms dealing exclusively with large commercial clients? If so how should any exemption be defined and operate?

Question 4

Do you agree with our proposals to introduce requirements in relation to description, staff, stages and timescales in any legal services where we decide to require price publication?

Question 5

Do you agree with our proposal to introduce an "SRA regulated" logo and digital badge?

Question 6

Do you have any suggestions as to how we can best increase consumer awareness of the logo?

Question 7

Do you agree with our proposal to introduce a requirement to publicise the existence of the Compensation Fund with a voluntary logo?

Question 8

Do you agree with our proposals on the publication of PII details?

Question 9

Do you agree with the proposal for firms to publish details of how to complain?

Question 10

Do you agree with our proposal that firms should publish details of how to complain to the Legal Ombudsman?

Question 11

What are your views on the proposed content for the digital register?

Question 12

Do you agree with our proposal to publish annual information about areas of work and to do so separately from the digital register?

Question 13

Do you agree with our proposed approach to publishing complaints data, and if you do not agree, what do you propose?

Question 14

If we do publish first-tier complaints data, what (if any) context should we provide?

Question 15

Do you agree with our proposal to require solicitors working in non-LSA regulated firms to inform clients of the absence of the requirement to hold compulsory PII?

Question 16

Do you agree with our proposal to require solicitors working in non-LSA regulated firms to inform clients of the absence of the availability of the Compensation Fund?

Question 17

Do you have any comments on the drafting of our rules?

Question 18

What more does the SRA need to do to work with others such as third party intermediaries to deliver improvements in the information available to consumers?

Question 19

Do you have any further information to inform our final impact assessment?

Notes

Downloadable document(s)