CMA takes another look at legal sector

The Competition and Markets Authority will return to the legal sector this year for a look at how the profession has responded to its last assessment.

The competition watchdog spent a year looking at legal services before reporting at the end of 2016 that competition for individual consumers and small businesses was not working as it should be.

In particular, the CMA wanted more information to be available on price, quality and service to help clients choose the best option.

A further three-month review will now be undertaken to see what progress has been made in response to that call, focusing on evidence provided by the Legal Services Board, Legal Services Consumer Panel and frontline regulators.

The CMA says it wants to know how much competition has developed in the sector since 2016 and in particular how efforts to increase transparency have worked in practice. This will mean that transparency policies of the SRA, for example requiring firms to publish prices for certain services on their website, will come under the microscope, as will the extent of compliance by the firms affected. The review will go on to ask whether these reforms have affected firms’ pricing structures at all.

The review will look at the case for consumer redress – for example through the Legal Ombudsman – to be extended to unregulated providers and the case for regulatory reform more broadly. On this final question, the CMA will assess whether concerns identified in 2016 could be developed within the current regulatory framework, or whether there needs to be a wholesale review of the Legal Services Act 2007, upon which much of the current system is based.

Quality indicators for lawyers will also be examined, recognising that information on service as well as price is important for consumers to make informed decisions on choosing a provider.

Interested parties are also asked to contribute their thoughts by the end of this month. Findings are expected to be published by the end of this year.

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