LAWYERS in Scotland should do a better job of informing their clients about the costs of a divorce or buying a house, the Competitions and Markets Authority (CMA) has found.
And the CMA has recommended a series of measures to prove information and make it easier for customers to shop around – including a new independent body to regulate the legal services market in Scotland.
The CMA said legal services are critical to people and businesses, who can face costly legal needs at important times in their lives. However, it said there are indications that the sector may not be delivering good outcomes for people.
Consumer complaints were rising, high street solicitors were facing challenging market conditions and regulation in Scotland had not adequately responded to the new pressures.
The CMA said while there had been “longstanding discussions” about the need for reform, its pace had been slow. It examined how the sector was functioning in Scotland and whether there was evidence of a lack of competition, specifically transparency of information on price and quality – building upon its previous work in England and Wales. The CMS made a series of recommendations, including a review by the Law Society of Scotland of the impact of price and service transparency guidance, and whether mandatory rules could strengthen the information available. It wanted to ask the Law Society of Scotland and the Scottish Government to implement the alternative business structures scheme and for the latter to remove certain restrictive requirements of that.
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The CMA also wanted to see the introduction of an independent body to regulate the legal profession, as proposed in a report two years ago by Esther Roberton.
Andrea Coscelli, the CMA’s CEO, said it was important that people in Scotland had access to high-quality and good value legal services. “In addition to increasing transparency of information, our recommendations are intended to introduce greater liberalisation that could foster growth and innovation in the delivery of legal services which would help the sector grow,” he said.
“You might not need a lawyer very often but when you do it will often be at a crucial point in your life, so addressing regulatory and competition shortcomings will make a real difference.”
President of the Law Society of Scotland, John Mulholland, said it will “consider the content carefully” after coronavirus chaos dies down.
“Some of the recommendations around price transparency involve actions which we are already committed to taking forward at the appropriate time.
“We also agree that pace is needed around new introducing new alternative business structures. This may be one way to help firms access vital capital following the current crisis.”
Mulholland added: “On the issue of wider reform, the CMA started its work with a clear policy position in favour of creating a new regulatory body. So it is no surprise to see it reiterating that position.
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“However, at this of all times, we must avoid creating complicated new structures which add little benefit and only serve to build in extra costs for legal firms.
‘All this would do is increase prices for consumers and undermine the competitiveness of the Scottish legal services market.”
Caroline Normand, director of advocacy for the consumer group Which? said: “Which? has long called for independent regulation in the Scottish legal services market – so it is good that the CMA has reached the same conclusion.
“Implementing this change could drive up standards by helping people overcome the barriers they face when choosing a lawyer, encouraging competition on price and service levels and ensuring complaints are handled fairly.”
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