A slackening of rules governing legal services unveiled today will put consumers at risk, the Law Society of England and Wales warned as the Legal Services Board (LSB) confirmed it will rubber stamp changes to allow multiple tiers of solicitors and reduce protections for the public.
“We believe today’s rule change is a serious error,” Law Society president Christina Blacklaws said.
“The regulators have sacrificed the best interests of the public they exist to protect. They have ignored unprecedented levels of opposition from consumer bodies, legal experts and the extensive evidence of the risks of deregulation of this kind in this market.
“The door is now open for practitioners to cut their costs by slashing essential client protections that until today have provided cast-iron reassurance for clients.
“A high street where different tiers of solicitor, with different levels of protections offer the same services to passers-by will make it more difficult for people who need legal advice to reach informed choices often at very traumatic moments in their lives, such as divorce and bereavement.
“Flexibility for practitioners should never come at the expense of protection and clarity for consumers.
“This ill-conceived scheme creates an overly complex marketplace for legal services, jeopardising the public interest and the rule of law under the guise of driving access to justice. Yet there is no evidence deregulation will achieve this.
“On the contrary, the most vulnerable are the most likely to fall foul of a less-shackled marketplace for legal services.
“Neither the LSB nor the Solicitors Regulation Authority, which pushed these changes through, has developed any strategy to mitigate the risk that multiple solicitor brands will result in consumers and the public, particularly the most vulnerable, being confused and losing confidence in the system.”
Notes to editors
Key proposals and analysis
|SRA proposal for rule change||Law Society viewpoint||Other stakeholders with similar viewpoints|
|To permit 'sole solicitors' (freelance solicitors) to act outside the protections of a recognised sole practice. These solicitors would not be subject to entity regulation.|
Freelance solicitors could deliver non-reserved services. They could also deliver reserved services, subject to certain requirements, i.e. being engaged directly by the client, and not holding client money.
Freelance solicitors would need to hold adequate insurance cover for both reserved and non-reserved work.
|This proposal removes some of the protections that clients benefit from if they use a regulated sole practitioner and a regulated firm.|
For example, a regulated sole practitioner and firm must have professional indemnity insurance equivalent to the SRA’s minimum terms and conditions, and a person with three years’ practising experience, whereas a freelance solicitor would not need to purchase insurance to this level and would be free to deliver non-reserved services without prior work experience.
It is unreasonable and unrealistic to expect clients to decode the difference between a recognised sole practice and a sole solicitor and the difference in the protection they might afford their clients.
The Law Society opposes this proposal.
|Citizens Advice, the Legal Services Consumer Panel and the Legal Ombudsman expressed concerns about weakening consumer redress protections, and the risk of consumer confusion arising from this proposal.|
|Allowing solicitors to deliver non-reserved legal services from unregulated entities.||This proposal would remove or reduce crucial client protections, such as mandatory professional indemnity insurance, access to the compensation fund, and legal professional privilege. |
We have seen no evidence that this rule change will deliver
benefits or reduce the price of legal services. At the same time, it places an unrealistic burden on clients to understand the different regulatory status of solicitors working in different entities and different models of practice.
We oppose this proposal.
|Citizens Advice expressed concern regarding the proposals to remove the requirement for professional indemnity insurance and the restriction of access to the compensation fund.|
The Legal Services Consumer Panel raised concerns about consumer confusion, weakened consumer protections (no compulsory professional indemnity insurance and no access to the compensation fund), and the Legal Ombudsman’s jurisdiction over complaints arising against unregulated entities.
The Legal Ombudsman was concerned about the removal of compulsory professional indemnity insurance and the compensation fund requirements. In addition, it was concerned about the lack of clarity over its jurisdiction, and potential problems with investigating complaints and enforcement of judgments.
About the Law Society
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