Blurred vision

Contrasting views from regulators and professional bodies on the legal services market shows a lack of unity at a time when consumers - and law firms - would benefit from greater clarity

As temperatures soared in August, the debate over the future of legal services also heated up as the profession clashed over market reforms.

The Competition and Market Authority's (CMA) interim report into legal services flirted with the idea of regulatory intervention to improve price transparency and service information, which is inhibiting competition and harming consumers' decision-making ability.

A contingent of the profession's bodies and regulators published their responses one after the other; all welcomed the need for change, all differed on approach.

Regulatory reform of the market would represent the biggest change since the introduction of the Legal Services Act 2007, so when the CMA stated it was under consideration, the Law Society, the Solicitors Regulation Authority (SRA), and the Legal Services Board (LSB) all, unsurprisingly, submitted varying responses.

In a rare show of unity, Chancery Lane and the SRA both advocated a market driven by consumers, however the LSB suggested consumer behaviour alone could not deliver requisite change. The infrequency of legal need, distress purchases and a desire for personal recommendation due to the emotional context of some legal services, presented market challenges that consumers could not solve alone, the super regulator said.

Seldom do the triumvirate agree with their relationship fraught, at best, this summer. Following their responses to the Judicial Executive Board's consultation on McKenzie Friends, the Law Society said the LSB and the SRA were 'wrong to say that the best way to mitigate the damaging consequences of legal aid cuts is to allow non-professionals … to charge vulnerable clients a fee'. LSB chief executive, Neil Buckley, claimed his body had been 'misrepresented' in a letter to former Law Society president, Jonathan Smithers.

In a further blow to the Law Society, the SRA's quest for 'independence day' was given ammunition by the CMA, which stated that full separation of the regulator from the providers it regulates was a 'key principle'. The LSB's chairman, Sir Michael Pitt, has also called on parliament to 'simplify the complex governance relationships' between the two.

The Law Society and the LSB, alongside CILEx, did show harmony when rebutting the CMA's idea of mandatory price publication due to fear it may mislead consumers amid calls from the Legal Services Consumer Panel (LSCP) to publish the average costs of services.

The professional bodies and regulators can rejoice in their desire to protect the consumer, but there exists a blurred vision at a time when consumers and law firms need clarity.

The Treasury is planning to carry out its own consultation on regulatory independence of the regulators from their representative bodies, which the CMA noted is linked to reducing their number and may result in benefits.

The CMA's final report will be published in January 2017. Should regulatory intervention be deemed necessary, it will undermine the authority of the professional bodies and regulators to serve the public. It may signify the beginning of the end for some.

Matthew Rogers is a legal reporter at Solicitors Journal @sportslawmatt matthew.rogers@solicitorsjournal.co.uk

Copyright & permissions