SRA under pressure to demand more price transparency

The oversight regulator has warned that it will expect the likes of the Solicitors Regulation Authority to clamp down on firms not doing enough to give clients the information on price transparency the regulator says they need.

The Legal Services Board said today that rules-based systems are likely to be more effective than guidance if the long-term goal of greater price transparency is to be realised.

But despite the SRA and other regulators making it a requirement of firms to display certain prices and service information on their websites, there remains concern that these policies are not working as well as they could be.

In a draft policy statement on empowering consumers, the LSB said:

“We acknowledge that several regulators have already put in place regulatory arrangements to improve transparency of price, service and quality information.

“It is apparent, however, that compliance with these existing arrangements is deficient in some areas, or that providers are meeting the letter, rather than the spirit, of the requirements. We therefore propose to set a general expectation that regulators should tighten up on compliance with their regulatory arrangements and we will hold them to account in doing this.”

Regulators are told in the consultation that they may wish to go further in determining what information is necessary. Prices could be provided both including and excluding VAT, or showing specific types of disbursements such as counsel fees. Consumers should also be able to understand if and how hourly fees differ depending on the individual handling their matter.

Prices research has shown improvements in transparency since 2017, in both mandated and voluntary areas. Consumers are more likely to find divorce services prices, for example, despite family law not being one of the obligatory categories. But the LSB said there is still wide a range of prices available for similar services, indicating the market is not competitive enough.

The emphasis on transparency has largely come from reports by the Competition and Markets Authority in 2016 and 2020 which were critical of the lack of information available to clients when choosing a lawyer.

The LSB says it will expect that regulators should conduct ‘meaningful engagement’ with a broad range of consumers to test whether their needs and wants from the profession are being met.

In a draft statement of policy, regulators are also likely to be told to put in place effective programmes of activity to support public legal education. The consultation ends on 8 December.

Kindly shared by The Law Society Gazette

Main photo courtesy of Pixabay