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Changes to the Regulatory Arrangements and Code of Conduct – How to comply with the new regulations resulting from the CMA recommendations

In December 2016, the Competition and Markets Authority (CMA) Published its Legal Services Market Study. It highlighted problems of transparency of price and quality and that consumers did not have enough information before employing a lawyer.

Recommendations were made by the CMA, mainly to “deliver a step change in standards of transparency to help consumers (i) understand the price and service they will receive, what redress is available and the regulatory status of their provider and (ii) compare providers”.

An action plan was created and built in to the CMA’s business plan for 2018-2022 and a timetable of implementation was made as follows:

    • Council approve rules July 2018
    • Application to Legal Services Board August 2018
    • Publication of Rules and Guidance September 2018
    • Rules and Guidance in force December 2018

 

 

What are the changes to the Regulatory Arrangements?

high level summary of the decision of the Legal Services Boarder can be found here.

However, in short, CLC regulated firms must:

  1. Make clear information on costs on their websites.
  2. Make clear on their websites standard information about:
    1. the services that they provide;
    2. key stages in the delivery of those services; and
    3. indicative timescales
  3. Make clear on their websites standard information about:
    1. Complaints procedures
    2. client protection arrangements
    3. regulatory status
  4. Consider the benefits and risks of third party feedback platforms and price comparison websites for them and their clients.

How does this affect my firm?

The CLC requires your company to:

Re: codes of conduct;

  • Display, on your website/communications and at their office premises, the practice license number.
  • Publish, in a prominent place on the firm’s website, cost information and to provide it by other reasonable means on request.
  • Publish, in a prominent place on their website, their complaints procedure, including how and when complaints may be made to the Legal Ombudsman.
  • Display, in a prominent place on their website, a digital badge that verifies that a firm is regulated by the CLC.

The amendments also remove the requirement for firms to publish the names of managers on all business communications, websites and the office premises.

RE: Estimates and & Terms of Engagement Code

  • Provide clients with a description and cost of any disbursements likely to be incurred and to separately itemise Land Tax.
  • Provide clients with details about the experience and qualifications of the individual having day-to-day conduct of the matter.
  • Provide clients with a clear description of the services included in the cost and publish on your website.
  • Publish, in a prominent place on their website, information about the staff mix, their experience and qualifications.
  • Publish, in a prominent place on their website, the name of the individual to whom complaints should be made and the complaints procedure, including how and when to complain to the Legal Ombudsman.
  • Publish, in a prominent place on their website, their complaints procedure, including how and when complaints may be made to the Legal Ombudsman.

RE complaints:

  • The proposed amendments to the Complaints Code will require firms to publish, in a prominent place on their website, their complaints procedure, including how and when complaints may be made to the Legal Ombudsman.

Publishing prices under the new Transparency Rules.

 

CLC regulated firms are already required to provide a cost estimate to clients at the outset of instructions. You are expected to make it simple for your clients and prospective clients to find your pricing information:

“CLC Practices will also be required to make Cost Information, including whether they havereferral arrangements, readily accessible on their website.”

“Whilst not specifically required, CLC Practices may wish to consider providing an instant online quote generator on its website or on a third party website.”

“We believe that if a firm has a website, price information should be made available there, ideally through an estimate generator on their own website or through a DCT. Failing that, the firm will be required to publish a comprehensive price list of all of the factors that might impact the price of a transaction.”

If your firm does not have a website: “CLC Practices will also be required to make Cost Information, including whether they have referral arrangements, readily accessible …. in alternative formats on request (eg by email or post)”

Which legal services are affected by the changes to the Regulatory Arrangements?

Whilst there are a wide range of services covered by the new SRA Transparency Rules the CLC’s consultation only covers the legal services regulated by the CLC – conveyancing and probate.

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