The Legal Services Consumer Panel, a board of eight non-lawyers who advise the Legal Services Board, have recommended that fixed fees be introduced to family law.
The call was made in response to the Competition and Markets Authority’s (CMA) interim report on the state of the legal services market in the UK.
Elisabeth Davies, chair of the panel, argued in the response that the CMA’s overall findings were “indisputable”.
“The approved regulators and the oversight regulator must also show demonstrable leadership and a real commitment to putting the needs of consumers at the heart of regulation,” Ms Davies added.
Chronically weak demand
The panel agreed with the CMA’s findings, blaming dysfunction in the market on “a chronically weak demand side”.
The panel argued for regulatory intervention to force greater transparency on legal services providers, particularly with regard to price and quality of service.
The panel’s evidence suggested that price was a factor even in areas like asylum and immigration claims, rated as equally important to consumers as a firm’s reputation.
A push for “average prices” publication
Several legal service providers voiced their displeasure recently when the Legal Services Consumer Panel recommended that firms publish their “average prices”.
The panel argued that consumers would be “empowered” by access to better pricing data, dismissing lawyers’ arguments that average prices were essentially impossible to calculate.
Following the lawyers’ line of reasoning, the panel suggested, “disproportionately shifts the risks on to consumers, who are already disadvantaged by virtue of information asymmetry.”
Fixed Fees in Family Law
It was suggested that fixed fees would be the “optimal” solution for family law in particular. Consumers searching for family law services were recognised by the panel as being particularly vulnerable.
Mandating fixed fees, or requiring firms to publish average fees, should be required by regulators, the panel argued.
The panel conceded that average cost “is not an indication of real or actual cost”, but with “appropriate caveats”, some consumers would find the information useful when making a decision.
The panel also argued that publishing average fees would “encourage” consumers to consider fees in more detail, and hopefully make further enquiries about fees, early in the process. This research would be expected to reduce the number of fee-related complaints made against the Legal Ombudsman.