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Consumers ‘confused’ over cost of legal services, research finds

Forcing firms to publish price information will not help clients make informed choices, argues Law Society

25 October 2016

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The vast majority of consumers do not understand the price of common legal services and may not be seeking legal assistance as a result, new research has found.

Research from the Law Superstore has today that just 9 per cent of consumers are confident they understand the price of common legal services, such as conveyancing, divorce, wills and probate, leading to an overestimation of up to double the actual price.

Just one in five (22 per cent) said they look for legal help when in need. However, a further quarter (26 per cent) said they had not sought assistance when they should have.

According to the research, this leads to people: compiling their own cases (22 per cent); costing a lot of their time (18 per cent); them not pursuing the case (15 per cent); and losing out financially or in another way (17 per cent).

Matthew Briggs, CEO of the Law Superstore, said: ‘Lawyers play a critical role in helping people to get the best legal outcome, yet consumers are saying they are confused about how much their services cost and aren’t always seeking advice when they need it. This has to change.’

Some 80 per cent of consumers said they were in support of law firms displaying their prices on their website while just 20 per cent felt that the services they were buying were so complex they could only be quoted after talking to a firm.

Over half of the 2,008 respondents said value for money (51 per cent) was the most important factor in choosing a firm, which compares to just 21 per cent who are looking for lowest price.

The findings reinforced those of the Competition and Markets Authority in its interim report into legal services that limited price transparency was harming consumers.

‘The regulator is already investigating how we create more transparent industry,’ said Briggs.’This research shows just how critical it is – people want to understand what they are getting from their lawyer and value for money, not rock bottom prices.’

The analysis also considered findings from the Legal Services Board released early this year, which found that just one in six firms (17 per cent) displayed fees on their websites while a significant disparity existed in costs for the same legal service from firm to firm.

The LSB also found that lawyers charged an average of £1,283 for the sale and purchase of house, £829 for probate, and £722 for a divorce. Yet the consumers surveyed by the Law Superstore had a far higher expectation of fees, estimating £1,867 as the cost for buying and selling a property and £2,300 for a divorce, although they were more accurate on probate at £804.

Once people had engaged a lawyer they had a positive experience, however, with 71 per cent in agreement that they had secured a positive outcome, while 58 per cent felt they had been supported throughout. However, a third found it difficult to find out what their fees would cover up front and 32 per cent said that they had experienced unexpected charges.

Through its discussion paper, ‘Regulatory data and consumer choice in legal services’, the Solicitors Regulation Authority is exploring what types of information it could publish on a public register, such as solicitor qualifications, complaints, and insurance claims data, as well as what information firms might publish voluntarily, such as quality marks and service prices.

Legal problems are estimated to cause small businesses almost £10bn of losses a year, yet 83 per cent see legal services as unaffordable. And with only one in ten people using a solicitor, the regulator believes better information and transparency could help tackle the problem unmet legal need.

Paul Philip, the SRA’s chief executive, said: ‘Most people and small businesses are still not accessing legal services. When they do, they are not shopping around. It is unsurprising when the information out there is so limited. We want to help consumers, so they are not left making blind choices. Information such as enforcement action, complaints, and claims data are exactly the type of things I would want to know when choosing a solicitor.

‘If we get this right, we could help create a more competitive market, where consumers can make better choices and forward-thinking firms thrive. It will also help small businesses access the legal services that could help them succeed and grow,’ he continued.

‘Yet we need to think carefully about what we publish and how. More information will not benefit consumers if they find it confusing, hard to access, or it is unhelpful. We have also made good progress on getting rid of unnecessary burdens on firms. We will not ask firms to do more in this area, unless there is a clear benefit.’

News that the regulator will not be forcing firms to publish price information was welcomed the Law Society’s chief executive, Catherine Dixon, who said that publishing ‘average prices’ would not help clients make informed choices.

‘We do not think that yet more regulation forcing firms to produce information irrespective of whether it is relevant to their clients’ needs is the right answer,’ she added. ‘Greater public education in identifying legal problems – legal literacy – can play a significant role in empowering people to make the right choices about when to seek legal advice.’

Matthew Rogers is a legal reporter at Solicitors Journal

matthew.rogers@solicitorsjournal.co.uk | @sportslawmatt

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