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Deregulation will not address unmet legal need, Law Society tells SRA

Regulator risks diminishing the solicitor profession and harming public

29 June 2017

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Deregulation of solicitors will weaken consumer protection and will not help address unmet legal need, the Law Society has said in response to a new paper from the Solicitors Regulation Authority.

‘Improving access – tackling unmet legal needs’ outlines some of the barriers faced by the public and small businesses when accessing legal services and how the SRA and law firms are addressing this gap in provision.

To give firms greater flexibility to support innovation, the SRA plans to slim down its handbook to just 14 pages at the end of 2018 as part of its ‘Looking to the future’ programme.

The regulator also intends to allow solicitors to offer legal services in non-Legal Services Act regulated firms on certain areas, while its accounts rules are to be made simpler to help drive down regulatory costs. Professional indemnity insurance requirements are also being looked at ahead of a possible review.

However, the president of the Law Society, Robert Bourns, said the SRA’s plans to reduce the regulatory burden were a risk to consumers.

‘What will not help address unmet legal need is the wholesale weakening of consumer protections, which the SRA seems intent on with their proposed changes to the regulations governing solicitors,’ he said.

‘People seek legal advice for some of the most important moments in their lives, and they trust that when they do so they are getting good advice from a professional who is serving their interests. Deregulation undermining protection, without increasing consumer understanding, can only diminish the solicitor profession and creates risk to the public generally – a concern expressed by the Competition and Markets Authority.’

Last year the CMA published its final report on the legal services market and concluded that legal services for individual consumers and small businesses were not working well amid a disparity of cost for similar services in addition to a lack of information on price, quality, and service. The collated figures in the SRA’s latest report highlighted the issues that exist.

Only one in ten small businesses use a solicitor or barrister when they have a legal problem, despite the fact that businesses face eight legal issues every year on average. Over 50 per cent of adults have had a legal need in the last three years but only one in three sought professional advice.

The report summarised the two main barriers to accessing legal services: affordability of services and lack of consumer information. Two in three people feel legal services are too expensive, which is compounded by one in three adults having less than £300 in savings for unexpected events. Of the 83 per cent of small businesses that see legal services as unaffordable, half will try to resolve a legal issue on their own.

As for the lack of consumer information, half of the public don’t know their legal rights. One-third are not satisfied they have enough choice, while the rest rely on recommendations. One-quarter shop around for help, while just over a quarter take no action or do not think anything can be done.

In addition to the SRA’s deregulation efforts, law firms have also been finding ways to improve access to legal services, the regulator’s report shows. Fixed fees and unbundled and online services are now more commonplace. Meanwhile, the growth of alternative business structures has encouraged greater offering of services and more efficient working practices.

In the last year, 236 law firms have used the separate business rule brought in by the SRA in 2015, which means a firm can be connected to a business that offers non-reserved legal services whether or not that business is regulated.

Access to the market has also improved due to the increased use of technology with firms now investing more than ever before in website development, which is complemented by increased brand awareness through marketing. The SRA said technology has the potential to improve communication between solicitors and their clients.

Crispin Passmore, the SRA’s executive director of policy, said: ‘We regulate in the public interest, so it makes sense that we do what we can to help the public access the legal services they need. We have already made changes that make it easier for firms to offer accessible and affordable services such as unbundling services, firms reorganising their structures, helping clients that are more vulnerable, and taking on more pro bono cases.

’This report looks at some of those examples in more depth, and looks at the ways in which we can play a further role in helping the profession connect with potential clients. That includes freeing up solicitors to work wherever they want, including in businesses outside LSA regulation, and exploring the options on publishing more detailed information about our firms.’

Matthew Rogers is a legal reporter at Solicitors Journal

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

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