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Competition authority to investigate legal services

A more robust route to obtaining redress is likely to emerge from the study

13 January 2016

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The Competition and Markets Authority (CMA) has launched a study into legal services and will investigate the ‘long-standing concerns about the affordability… and standards of service’. 

The authority will examine whether: (a) customers can drive effective competition; (b) customers are adequately protected from harm or can obtain satisfactory redress; and (c) how regulation and the regulatory framework impact on competition for the supply of legal services.

The government also announced on 30 November 2015 that it will launch a consultation by spring 2016 on removing barriers to entry for alternative business models, and making service regulators independent from representative bodies.

The CMA's senior director, Rachel Merelie, said that ensuring value for money is being achieved is essential the lives of induvials and businesses could depend on the quality of advice received.

'We would be concerned if customers are not getting a good deal, either because they do not know what to expect when purchasing a legal service, or because they are not seeking appropriate legal support in the first place.

'They also need to secure value for money and quality when purchasing these services. These are all areas that can have a major impact - both personally and financially - on the lives of individuals and on the success of small businesses', she commented.

A recent survey conducted by Kingston University found that among small businesses, only 13 per cent viewed lawyers as cost-effective.

Furthermore, almost half of respondents said they only used legal services as a last resort.

Paul Philip, CEO of the Solicitors Regulation Authority (SRA) has welcomed the CMA's study and says the regulatory body intends to fully cooperate with the authority.

'The government's proposals to make legal service regulators independent from their representative bodies would strengthen the market and help make regulation more efficient and effective.

'Making this change would also cut costs, which will benefit solicitors and law firms and their clients, as well as boosting public confidence.

He continued: 'It is crucial that the legal services market works in the public interest and serves all consumers. We welcome all and any efforts to promote that goal and that is why we are pleased the CMA is conducting this study and will offer our help as they do so.'

 

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