The
Competition and Markets Authority has published its final report in its market
study into the supply of legal services in England and Wales. The CMA finds
that competition in the supply of legal services is not working well,
concluding that information issues inhibit the ability of consumers and small
business to make informed choices about price, quality and service.
The
CMA has undertaken a wide review of the current regulatory regime for legal
services. The legislative framework for
the regulation of legal services in England and Wales is set out in the Legal
Services Act 2007 (LSA). Under the LSA,
only individuals and businesses authorised by an "Approved Regulator"
(AR) or those exempt from the requirement to be authorised are entitled to
provide reserved legal activities. The
six reserved legal activities are: the exercise of a right of audience, the
conduct of litigation, reserved instrument activities, probate activities,
notarial activities and the administration of oaths. The CMA finds that the
current system is not sufficiently flexible to apply proportionate risk-based
regulation and recommends that the Ministry of Justice reviews the current
legal framework to make it more flexible.
The
CMA makes a number of recommendations to the ARs urging them to improve the
transparency of price and service information to enable buyers of legal
services to make comparisons.
The
CMA has also found certain issues relating to unauthorised providers. Providers that are not authorised and
regulated under any legal sector or other specific legislation can provide
legal services as a significant focus of their work. Unregulated legal services providers operate
outside the areas of reserved legal activities under the LSA for example, in will
writing and estate administration, family, intellectual property, and employment
law. The CMA has recommended that the
Ministry of Justice examine whether to extend protection afforded under
existing redress schemes to clients using unauthorised providers.
Legal Services Market Study Final Report, 15 December 2016
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