Which? in challenge to legal services competition

Consumer body's OFT complaint says lack of competition pushes up prices for consumers

News, 8 May 2007

The consumer charity Which? has called for an investigation into Scots' access to affordable justice and legal representation.

The charity has expressed its concerns to the Office of Fair Trading (OFT) through its powers under the Enterprise Act 2002, in a formal complaint that the current regulation of legal firms restricts choice and pushes up prices.

Current restrictions prevent consumers from instructing advocates directly, solicitors working with advocates, advocates with other advocates and in general lawyers from working alongside non-lawyers to offer other services to their clients.

Which? believes that the present structure hinders market innovation, restricts consumer choice and may lead to higher prices. It is calling for deregulation of the market in order to improve the services available to consumers.

The OFT has 30 days to consider the "super complaint" and decide whether it should investigate.

Best route?

The Law Society of Scotland said it was disappointed Which? had chosen to publicise its complaint in this way.

Michael Clancy, the Society's Director of Law Reform, said: “The Society has not been sent the complaint, but it is disappointing that Which? has chosen this route to raise these issues instead of working with the Society to benefit the Scottish public."

Which? strongly supports the proposals for England & Wales following the Clementi review which are currently the subject of legislation at Westminster. This will allow, for example, banks and supermarkets to join forces with legal firms to offer legal services.

Which? believes that the regulation of both solicitors and advocates should be entrusted to a new Scottish Legal Services Board. In England & Wales a similar board is being created under the Legal Services Bill to oversee the work of the existing professional bodies.

Julia Clarke, principal public affairs officer for Which?, said: “People should be able to access legal services from a range of organisations, not just traditional law firms. This should lead to improved standards of customer service and greater efficiency, improving price and quality for consumers.

“Although most of the restrictions can be removed straight away, deregulation will require the introduction of new legislation to ensure that people are not left vulnerable to unscrupulous practices. Also, regulation of solicitors and advocates needs to be overseen by an independent body to ensure that regulators put consumer interest first.”

"Important" report

Mr Clancy said the Scottish Executive had promised Scottish solutions to Scottish issues and the Law Society of Scotland, along with others such as the Scottish Consumer Council, the OFT and Citizens Advice Scotland, was represented on the Executive’s Research Working Group on the legal services market in Scotland.

He continued: “The group’s report, issued in April 2006, is an extremely important one for the future of the legal services market in Scotland.

“The group examined the different legal services operating in Scotland, identified restrictions which might prevent, limit or distort competition and examined access to justice, public interest and consumer protection factors that might justify such restrictions.

"The group also evaluated whether the restriction was proportionate. It concluded that overall the evidence backed the case of non-intervention, and assumed that market forces would keep supply and demand in balance."

The report, he added, also concluded that the objectives of consumer protection and the administration of justice had to be balanced against those of competition. The Society has urged the Executive to follow up on issues raised by the working group.