Measures to address ‘unregulated’ legal services will enhance consumer protection
11 June 2020
All providers of legal services in the UK, whether legally qualified or not, should be registered and regulated according to a major review of legal services, conducted by Stephen Mayson, Honorary Professor of Law at UCL.
The report ‘Reforming Legal Services: Regulation beyond the echo chambers’, which has been submitted to the Lord Chancellor, is the outcome of a two-year independent review* into the regulation of legal services in England and Wales. More than 340 interested parties were consulted, including regulators, professional bodies, consumer groups, judges, in-house lawyers, academics and parliamentarians.
Among other proposals is the recommendation for a single, sector-wide regulator of all legal providers, and a single point of entry for complaints and redress mechanism for consumers and small businesses.
Professor Mayson (UCL Centre for Ethics & Law) said: “Many people assume that all providers of legal services are in some way regulated and that relevant protection is available, but they are mistaken. There are many providers of legal advice and assistance, beyond regulated qualified lawyers, providing services from wills and estate administration to online advice and bespoke documents.
“The current regulatory structure provides an incomplete and limited framework for legal services that is not able in the near-term and beyond to meet the demands and expectations placed on it, particularly with the emergence and rapid development of alternative providers and lawtech.
“The recommendations in this report seek to create a level playing field for legal services and enhance consumer protection, through targeted and proportionate regulation.”
Key report recommendations:
- All ‘providers’ of legal services, whether qualified or not, should be subject to registration and regulation. This includes those who are currently unregulated, as well as providers of technology-based legal services. A YouGov survey of almost 30,000 adults published earlier this year reported that 60% of respondents had a legal issue in the past four years. Two-thirds of them had received help but only half of them received it from a regulated lawyer. This exposes consumers to risks that they are often not aware of.
- The current arrangement of ten front-line regulators plus an oversight regulator is cumbersome. The report recommends a single, independent regulator of legal services (the Legal Services Regulation Authority) to ensure a common and consistent approach across the legal sector. The Authority should be established as an arm’s length regulatory agency.
- Regulation should be targeted and proportionate, and should take account of risk, burden and cost. The current legal activities reserved only to qualified lawyers should be reviewed and replaced with legal services that require prior authorisation because of their high public importance or high risk to consumers.
- The Authority should maintain a public register of providers. Regulatory requirements and enforcement would be appropriate to the importance and risk of particular legal services or the relative vulnerability of the clients concerned. Defined low-risk services would only require registration. Higher-risk services would carry additional regulatory conditions.
- The minimum protections for consumers would include standards of expected performance, indemnity insurance, and access to a revised and more extensive legal services ombudsman acting as a single point of entry for investigation and redress for complaints made by individual consumers or small businesses.
- The report also addresses the emergence and rapid development of lawtech, which is capable of offering legal advice and services independently of any human or legally qualified involvement. The report recommends that lawtech should fall within a future definition of ‘legal services’ and an appropriate person should be registered as a ‘provider’.
- All legal professional titles should have the benefit of statutory protection. It should be an offence for someone who is not on the register or a title-holder to pretend or imply that they are, or to use any description that suggests so.
- Consequently, the Legal Services Regulation Authority should have the power to approve the requirements for registration, regulation and the award and removal of professional titles. However, professional bodies should continue to have the ability to require higher standards of their members than those imposed by regulation.
Implications for legal services regulation in the context of Covid-19
The publication of the report is particularly timely given increasing and changing demand for legal services during the Covid-19 crisis. As such, the report also proposes reforms that could be made in the short-term. This includes a ‘parallel’ new structure, fast-tracking a public register for currently unregulated providers of legal services.
Professor Mayson explains: “The prospect of increased use of ‘unregulated’ legal services at a time of personal, social and economic instability in the lives and circumstances of both consumers and regulated providers suggests a more pressing need for short-term reform of regulation.
“The report therefore also recommends a parallel structure that would leave the currently regulated untouched, but bring the unregulated, including those who provide online services, within a short-term version of registration and access to the Legal Ombudsman for investigation and redress of complaints about registrants.”
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- Natasha Downes
- tel: +44 20 3108 3844
- E: n.downes [at] ucl.ac.uk