Redress for Legal Services

Transcription

1 Redress for Legal Services A Report for the Legal Ombudsman May 2013 Centre for Legal Management and Regulation, Northumbria Law School, Faculty of Business and Law, University of Northumbria.

2 Contents Remit... 3 Introduction... 4 Who, then, is a consumer of legal services?... 4 Consumer perception of what amounts to legal services:... 7 The Legal Services Market (s) The Core Authorised Person Legal Services Market The Alternative Legal Services Market The Third Legal Services Market who else may provide legal advice (even if as an ancillary)? Consumer Protection - legislative remedies The balance of power in the provider/ consumer relationship Consumer Empowerment What choice tools might help empower the consumer? Potential Impact of the Unempowered Consumer Where might redress mechanisms do more to empower the consumer? Conclusions and Key Questions

3 Remit We have been asked by the Legal Ombudsman to address the following aims: To identify linked professional legal services and the nature of relationships between consumer and provider. To identify the current redress models (including consumer protection legislation) operating in these professional services and any gaps and inconsistencies within these models. To gain an understanding to the extent to which current models may impact on access to redress for consumers of legal/linked services. And to answer the following questions: What are the linked professional services to consumers? What services are being offered and under what operating models? What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? What is the potential for confusion among consumers of professional services in accessing redress in these services? What is the power balance between the consumer and the professional in current redress models? What impact might this have on access to justice? What conclusions can be made? 3

4 Introduction The aims of this report, and associated questions to be answered, demonstrate a desire on the part of the Legal Ombudsman to consider redress for legal services from the perspective of the consumer of these services. This is a natural step in working towards the Legal Ombudsman s Vision that everyone can access legal services in which they have confidence 1. To realise this Vision, the Ombudsman must have insight into the experience of legal service provision from a consumer perspective, albeit that it is committed to considering the perspectives of provider and consumer in the resolution of any actual complaint. Who, then, is a consumer of legal services? Exploring redress for legal services from the perspective of the consumer necessitates an attempt to define the scope of legal services, no matter how blurred some of the boundaries required to set parameters may be. What sort of services come within the umbrella of legal services? That is a question to which there is no immediate or obvious answer when posed to legal service providers themselves, let alone the consumers of those services. It is also problematic for Regulators the Legal Services Board (LSB) itself will be consulting shortly on whether general legal advice should be a reserved activity, and part of that will involve exploring and pinpointing what could be said to constitute legal advice. When posed to a consumer of legal services, it is a question which is challenging indeed. The legal services market is complex. The introduction of ABS in October 2011 has heightened the breadth of business models operating in the sector and, along with other regulatory changes and economic conditions, has acted as a catalyst for change in the legal services market. This has lead to the need for the LSB and others to monitor the impact of ABS and other regulatory change on this market. They too must grapple with defining the market to be monitored. Oxera prepared a report in September 2011 for the LSB, seeking to provide a framework to monitor the legal services sector. Introducing the report, Chris Kenny of the LSB noted that the legal services market is hugely complex Legal Ombudsman Strategy , Oxera (for the Legal Services Board A Framework to Monitor the Legal Services Sector, September

5 In his report 3 on the regulatory framework for legal services, Clementi charted the historical difficulty of defining legal services and touched on the issue of reserved and non-reserved activities 4. He did not himself review the distinction, and took the view that the time taken would be prohibitive and that it was for the government to determine where the regulatory net fell 5. He did consider that the market could be analysed in terms of an inner circle of reserved legal activities, and an outer circle of non reserved legal services more broadly defined (considered below). This approach, however, does not tell the full story. The central problem is that if a person is authorised to carry out an inner circle activity (a reserved activity), other outer circle activities provided by him/her which are not reserved also happen to be regulated by virtue of his/her already authorised, inner circle status. Another provider only carrying out an outer circle activity would not be so regulated. However, in attempting to chart the legal services market, any definition would include the core authorised person legal services market ie services where there would be little argument (from either provider, consumer or regulator) that they fell within the definition of legal services, for example services provided by a Solicitor, practising Barrister or Chartered Legal Executive. Even within that core authorised person market there is a divide between reserved and unreserved legal activities. For instance, both Solicitors and consumers may broadly agree that all services provided by a Solicitor are legal services but only a minority of services offered will in fact require regulatory authorisation eg be reserved activities. So, a Solicitor requires to be authorised and regulated to provide probate advice but would not need to be authorised and regulated to provide employment advice: s/he just happens to be so regulated by virtue of the fact that s/he is in any event authorised in relation to reserved activities. Someone else providing employment law advice need not be regulated for that activity per se. This distinction may not matter if it were understood by the consumer, but the reality is that consumers are highly likely to be blind to this distinction. The Legal Services Institute has argued that the distinction between reserved and unreserved activities is without rationale and is largely a result of historical political horse trading 6. Whatever its roots, its impact in 2013 is that it continues to fundamentally affect the shape of the legal services market and its regulation. The impact of the distinction is softened by the practitioner based approach of frontline regulators. This means that where a practitioner is 3 Clementi (2004) Review of the Regulatory Framework for Legal Services in England and Wales 4 Reserved activities are listed in Schedule 2 of the Legal Services Act 2007 and include: exercising a right of audience, conducting litigation, reserved instrument activities, probate activities, notarial activities and administration of oaths 5 Op cit p Legal Services Institute (2010) Reserved Legal Activities History and Rationale 5

6 carrying out a reserved activity, they are also regulated for all other activities they carry out, even if unreserved. This means for example that a practitioner regulated by the SRA to carry out probate activities would also be regulated by the SRA in relation to will writing. A provider who was not caught by the regulatory net for a reserved activity would not be regulated in relation to will writing 7. There are tensions between the activity-based approach of the reserved/ unreserved activity distinction, and the remit of the LSB whose remit, Oxera note, is in practice practitioner based. They stated that this limited their report, and set the parameters of the market to be studied, as this means that the LSB is concerned with monitoring all activities (reserved or otherwise) undertaken by reserved or authorised persons. To properly put unreserved activities carried out by reserved persons into some sort of context, Oxera note, would require some acknowledgement and monitoring of unreserved work carried out by unreserved organisations such as charities, trade unions, CAB, CLACs. To adopt this approach they say, it may be necessary to use a much broader definition of legal service suppliers and include non-authorised persons. Focusing on activities of authorised persons without looking at the whole of the legal services market gives an incomplete picture of a consumer s experience of what they may perceive the market to be. This is important, Oxera note, because: where alternative legal service suppliers to authorised persons are available, this can directly affect the consumer s experience. For example, trade unions may provide free advice about employment law; the CAB or CLACs may be able to offer face to face advice more locally than authorised persons; and the quality of advice received from alternative legal service suppliers may also affect consumer confidence in the service provided by authorised persons. Thus, they note that for such reasons it is important to bear the alternative legal service suppliers in mind, but that it is unlikely to be practical to collect data on the full breadth of the legal services supply base. The legal services market for Oxera, is hard to frame as it is difficult to define and to monitor. They do explore the complexity of the more narrow authorised person legal services market and attempt to categorise work types and suppliers to provide a framework enabling the LSB to monitor and analyse that market going forward. Thus there are complexities even within this core authorised person legal services market in terms of supply side segmentation 8. 7 The LSB has recommended that will writing becomes a reserved activity but this recommendation was rejected by the Ministry of Justice in May Oxera op cit Table 2.6 p 25 6

7 If the core authorised person legal services market is complex, it is itself a categorisation or label which would mean little to most consumers in terms of their perception of what the legal service market is. Many law graduates have little concept of reserved activities and that an alternative legal service supplier market exists. Law graduates are often deflated when asked to focus on what you actually need to be legally qualified to do. Oxera note the reserved activities are limited in scope compared with what are commonly understood as legal services. Clementi himself noted that there are a number of services which would be regarded by most people as legal services which are not reserved and can be provided by anyone who cares to do so 9. To get a sense of the size of this alternative legal supplier market, the Law Society s Market Analysis 2012 stated 10 that In England and Wales the legal services market comprises between 267,000 and 320,000 regulated and unregulated individuals providing reserved and unreserved legal services. Solicitors account for 38-46% of individuals, 44% of entities and 58% of turnover. However, they note that the role of non-solicitors and non-barristers is significant, clearly as they are in the majority of individuals. Consumer perception of what amounts to legal services: Most consumers would be oblivious to the distinction between reserved and unreserved legal activities, and that between core authorised person legal services market and the alternative legal service supplier market. Both of these labels will cover areas that consumers would most probably consider as legal advice ie primarily concerning legal rights and obligations such as in relation to property, probate, employment law, will writing etc. There will, however, be other advisers who give what the consumer may perceive to be legal advice, ie advice on legal issues, which fall outwith either the core authorised person market or the alternative supplier market, in so much as they are secondary or incidental to a related primary service such as estate agency, finance or insolvency. This could include for example, advice from accountants, architects and charities on matters which concern legal rights and obligations. A consumer may well label such advice legal advice even where the supplier is not labelled primarily as a legal services supplier core authorised person or alternative. Clementi s definition of the outer circle of legal services would include both this alternative 9 Clementi op cit p92 10 Law Society Market Analysis 2012 Summary: Overview and scenarios p2available at 7

8 legal services market where services are perceived as primarily legal, and a Third legal services market where legal services provided by others whose primary function may be in relation to a related service (eg. an architect giving advice on planning law): advice and assistance in relation to the operation or exercise of legal rights and the performance of legal obligations; and advice and assistance in relation to all forms of resolution of legal disputes 11 The key concern for this report arising from lack of consumer awareness about what does and does not amount to legal services relates to redress where the provision of that service goes awry. There are many examples of situations where a consumer may receive what they perceive to be legal advice from a provider not regulated by an Approved Regulator within the supervisory ambit of the LSB this could be eg from a supplier in the alternative legal supplier market or an adviser such as an architect who also advises on planning as part of his/ her service. In policy terms, confusion about redress matters for two principal reasons: What redress is available for services provided, and how does this differ from redress that would have been available if the party giving legal advice had happened to be an authorised person? Any disparity in redress would be of concern to those seeking to engender confidence in legal service provision. Confusion about redress is likely to act as a deterrent to consumer pursuit of redress. If a consumer is confused about the nature of services provided and in particular, whether they are legal services they will be unable to effectively seek redress or complain. Complaints and redress mechanisms have a role to play in securing standards of quality of services. Clementi anticipated 12 a legal services market shaped by competition, with the consumer as an agent to shape the competitive landscape. It is therefore important to consider the extent to which confusion over effective redress inhibits consumer empowerment and has a potential impact on the consumer s ability to shape the market as Clementi envisaged. 11 Clementi op cit p Clementi op cit p99 8

9 In practical terms, the problem with consumer confusion and perception of what may amount to legal services arises where: They think a service is a legal service and is regulated, but it is not there may be no redress. For example, a consumer may receive housing advice from a charity which is not regulated, and is part of the alternative legal supplier market. His/ her neighbour may receive housing advice from a Solicitor or Chartered Legal Executive, and this service is regulated, as part of the core authorised person legal market. They think a service is regulated it is, but there is confusion as to by whom it is regulated. This deters the consumer pursuing redress. For example, the consumer receives advice on inheritance planning from an accountant which s/he perceives as legal advice. S/he is unclear about who to complain to when it goes wrong, and this deters him/her seeking redress. This paper aims to illustrate situations in which this might arise and consider the extent to which that may result in consumer confusion. Which services attract a redress mechanism and which do not? From whom may redress be sought? What sort of redress mechanism is available? What powers are available to the complaint handler? In a market which comprises numerous regulators, the mixture of reserved and non-reserved activities, the separation of service and conduct complaints and so on, it may be difficult for consumers to understand their rights and protections. The first step in that process is therefore to consider some (non-exhaustive) scenarios in which this may occur: What legal services/ linked professional services are being offered to consumers and under what operating models? What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? 9

10 The Legal Services Market(s) The difficulties in defining the legal services market have been outlined already. Given the desire of the Legal Ombudsman to understand legal services and redress from a consumer perspective, for the purposes of this report we have approached the legal services to be considered from the practical perspective of a consumer of those services rather than from a technical or academic perspective of what should and should not be included within the definition of such services. For example, a consumer may be given advice on a matter they consider to be primarily legal, from a non legal advisor for example, planning law or party wall advice from an architect, estate planning advice from a financial advisor. Services and advisors selected for consideration in this report have therefore been selected on the basis that such advisors could give advice perceived by a consumer to be legal in as much as it affects or impacts on the consumer s legal rights and/or obligations. We consider that the legal services market and such advisors can be broadly categorised as follows: The Core Authorised Person Legal Services Market This comprises services provided by authorised persons (s129 LSA)(whether a reserved activity or not): Solicitors Barristers Chartered legal executives Law costs draftsmen Notaries Patent attorneys Probate practitioners Trade mark attorneys Registered European lawyers Redress is available through the Legal Ombudsman in relation to all services carried out by the authorised person. 10

11 The Alternative Legal Services Market This market comprises providers who may be regarded by a consumer as primarily providing legal services but who need not be authorised (and are not authorised) in relation to those activities. Barristers - non practising What legal services are being offered and under what operating models? A consumer may receive legal advice from an adviser who states that they are a non practising barrister. The consumer could perceive this as advice from an authorised person who just does not appear in court. Generally speaking (subject to limited exceptions) any barrister who does not hold a practising certificate must not hold himself out as a barrister in connection with the provision of legal services. A non-practising barrister 13 must notify the Bar Standards Board 14 if s/he is providing legal services, which is defined very generally, but broadly "legal services" includes legal advice representation and drafting or settling any statement of case witness statement affidavit or other legal document but does not include: a) sitting as a judge or arbitrator or acting as a mediator; b) lecturing in or teaching law or writing or editing law books articles or reports; c) examining newspapers, periodicals, books, scripts and other publications for libel, breach of copyright, contempt of court and the like; d) communicating to or in the press or other media; e) exercising the powers of a commissioner for oaths; f) giving advice on legal matters free to a friend or relative or acting as unpaid or honorary legal adviser to any charitable benevolent or philanthropic institution; 13 who was called to the Bar before 31 July

12 g) in relation to a barrister who is a non-executive director of a company or a trustee or governor of a charitable benevolent or philanthropic institution or a trustee of any private trust, giving to the other directors trustees or governors the benefit of his/ her learning and experience on matters of general legal principle applicable to the affairs of the company institution or trust. They must have a minimum insurance against professional negligence claim of 250,000 and must give any potential client a health warning detailing their status and any limits on the services they can provide and make explicit that they are not regulated by the BSB and that, as such, they are not governed by compensatory powers in relation to inadequate services. A barrister can therefore call him/ herself a barrister in relation to a client or third party provided s/he complies with the health warning and notification provisions above. S/he cannot carry out reserved legal activities. If however, all the work that a non practising barrister does falls outside the definition of "legal services", someone may hold him/ herself out as a barrister without complying with the "health warning" provisions described above. Traditionally, consumers have accessed the services of a barrister using a solicitor as an intermediary. There are now businesses and barristers that offer direct barrister access, and it is likely that there will be an increase in consumers accessing the services of a barrister directly. See for example, Advise Me Barrister and Stobart Barristers 15. In each case, with whom the consumer contracts would depend on the contractual terms and conditions. Does the consumer contract directly with eg Advise Me Barrister? Or does the consumer contract with the barrister directly, with Advise me Barrister acting as an introducer? If the latter, the legal services provided by the barrister would be regulated by the BSB. If the former, then the legal services would be provided by an unauthorised company, part of the alternative legal services market. In the case of Advise Me Barrister, for example, while terms and conditions are available on their website 16, it would be difficult for the consumer to interpret them to establish the boundaries of their contractual relationship with the barrister, and with Advise Me Barrister. Advise Me Barrister refer to pending approval from the Ministry of Justice and in their terms and condition to being subject to LeO jurisdiction, so it can be inferred that they are acting as a Claims Management Company but would

13 this be clear to a consumer? The linguistic emphasis on direct access may give a different impression, particularly when viewed in conjunction with the terms and conditions. The Legal Services Consumer Panel has pointed out: At present, the vast majority of clients will find a barrister through solicitors, who are better able to unpick the subtle differences in terminology. However, as more clients select a barrister directly, often in response to advertising, it is even more important that professional titles are unambiguous in their meaning. 17 What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? For a non-practising barrister not providing legal services, who is not required to provide a health warning, there is no redress mechanism available to the consumer other than common law remedies. There are examples of prosecutions 18, where a non practising barrister has failed to give a health warning and has sought to provide immigration advice, but this is of little comfort to the consumers involved. For a direct access barrister where the consumer actually contracts with the barrister directly, or a regulated barrister or a non practising barrister providing legal services who has given a health warning a redress mechanism is available through LeO. The BSB explain that Barristers can be employed, self-employed or nonpractising. Barristers who are self-employed work from offices known as 'chambers', the process for making a complaint about a barrister is the same for all types of barristers para

14 Housing advice What legal services are being offered and under what operating models? A consumer may receive housing advice from a charity or local authority. Housing advice is generally sought by people in need, and vulnerable consumers. Key sources of advice include charities and local authorities. Advice can typically cover arrears including eviction, repossession, rent arrears, emergency housing and landlords responsibilities. Given the recent legal aid cuts (1 April 2013) which will remove this advice from the remit of legal aid, this is an area which is likely to increase in use. Shelter reported in their most recent Annual Report (for 2011/12) that more than 50,000 households are in temporary accommodation in England. More than 1.8 million households are on a waiting list for social housing, and more than 200,000 possession claims have been issued in England alone in the last year 20. Operating models therefore include, for example, local authorities which are a key source of housing advice 21 and charities such as Shelter. What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? In the case of the local authority, the relevant Council complaints procedure would apply and a redress mechanism is available under the auspices of the Local Government Ombudsman (LGO) 22. This mechanism provides that complaints about various categories of housing advice will be considered where advice has been provided by a local authority. An internal complaint must be pursued first and the local authority has 12 weeks to resolve it, failing which the Ombudsman can investigate a complaint. The Ombudsman has a wide range of outcomes available such as order an apology, ordering a decision to be reconsidered, requiring improved future procedures, and may reimburse or compensate a party. It does state however that it has no legal power to force a body to follow their decision but bodies almost always do 23. Shelter give detailed advice on how to complain about housing advice from a local authority, but give less detail on how to complain about Shelter themselves. Those is typical of the sort of provision and advice offered

15 unhappy with service from Shelter are advised by them to give full details of the Shelter service complaint. They undertake to acknowledge the complaint within 3 working days and to investigate and respond within 21 working days. No details are given of how any such complaint may be resolved or determined. There is no standard redress mechanism for charities offering housing advice. This lack of redress mechanism is also a problem for the consumer who receives advice from a charity on other legal matters. There is a clear disparity in redress where someone uses a local authority, or charity housing adviser, or an adviser giving housing advice who happens to be already regulated as an authorised person. Immigration Advice What legal services are being offered and under what operating models? The Immigration and Asylum Act 1999 established the Office of the Immigration Services Commissioner (OISC) 24, which is an independent public body. It is a criminal offence for anyone to give immigration advice or services in the UK unless they are either: a regulated solicitor, barrister or chartered legal executive or regulated by the OISC. Their website details numerous instances of successful prosecution of illegal immigration advice. As a result of the practitioner focus of reserved activities, even although immigration advice is not reserved, an adviser regulated by another Approved Regulator can also provide immigration advice and need not register additionally with the OISC. Their website also lists numerous registered immigration advice providers both for profit and non-profit. It also has a very small list (4) of prohibited advisers. Immigration advice is not a reserved activity, and may be provided by companies such as Immigration Advise Service 25 who claim: At the Immigration Advice Service we have become one of the most trusted immigration lawyers (emphasis added)that people with immigration issues approach, offering a friendly, professional and detailed service that does all it can to argue your case to the UKBA and the courts

16 It may be difficult for a consumer to know if an adviser is regulated by the OISC as many companies have closely associated names. For example, if a consumer was to use a search engine such as Google to look for Immigration Advice Service, it would offer the consumer the webpage This site is headed Immigration Advisory Service on the search report. The provider website itself however is headed Immigration Advice Service. On a homepage busy with text, it carries a box with the OISC logo. If the consumer is aware of the meaning of the OISC logo then they may seek to check the OISC register. On checking the list they will find several companies with similar names. At this point, they will already have come across two names for the company Immigration Advisory Service and Immigration Advice Services. On checking the OISC register they will find Immigration Advice Service listed at several addresses and also two entries for Immigration Advisory Services (UK) Limited. As the original website did not contain a company number, and the OISC register does not list company numbers, how is a consumer to be sure whether the company they are interested in is registered? The Legal Services Consumer Panel reported 26 that: The SRA currently regulates around 1,300 firms which carry out some form of immigration work, while the Office of the Immigration Services Commissioner (OISC) regulates 1,930 organisations (3,375 advisors)providing immigration advice. ILEX Professional Standards/CILEX currently have 27 immigration advisors on their immigration register. The Bar Biennial survey identified 4% of barristers who indicated that they provide immigration advice and services, with only 2% stating that it is their main area of practice; They also identified that it is an area which is problematic in that many consumers are extremely vulnerable and much advice is poor and good advice makes a demonstrable difference to outcomes. They advised that asylum seekers were at risk of serious detriment from a complex asylum process and potentially sloppy work by immigration advisers. 26 Legal Services Consumer Panel (15 October 2012) Research Note: Immigration and Asylum Services and see also, eg. 16

17 What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? A complaint about immigration advice provided by an authorised person (eg by SRA, BSB and CILEX) would be made to LeO and a redress mechanism is available. The OISC will receive complaints about anyone giving immigration advice and filter accordingly. If the adviser is regulated by an Approved Regulator, the complaint will be passed on to that regulator. If the adviser is regulated by OISC, it will investigate the complaint for regulatory purposes. The OISC can also pursue action such as prosecution against advisers who are not registered and are therefore advising illegally. They state that the investigation process can take up to 6 months and that if the adviser is otherwise regulated they will probably refer it on to the other regulator. The suggestion is therefore that this is not done immediately and there may be a time lag initially. What redress may be given? The OISC can take action against the adviser to prevent others receiving poor advice or services for example, by raising practice points which an adviser is expected to implement. They cannot help with refunds or award compensation. There is a clear disparity in redress where someone uses an adviser regulated OISC and an adviser giving immigration advice who is already regulated in any event as an authorised person. Employment advice What legal services are being offered and under what operating models? Employment law is not a reserved activity 27. There are no restrictions on who may provide employment law advice and in practice it can come from a number of sources a regulated provider such as Solicitor or Barrister or an HR company or trade union or an insurance company or a claims management company. An additional example is where a consumer may be given employment advice by ACAS. What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? 27 There are now some restrictions on who can appear in an employment tribunal. The adviser representing a party in the employment tribunal must either be an authorised person, or someone otherwise authorised by the Ministry of Justice. The MOJ regulates registered Claims Management Services (Compensation Act 2006 s4) and that includes services which amount to employment tribunal representation.; 17

18 A complaint about employment advice provided by an authorised person (eg by SRA, BSB and ILEX) would be made to LeO and a redress mechanism is available. If advice (rather than employment tribunal representation) is provided by an unregulated adviser then there is no redress mechanism, aside from common law remedies (e.g. where a claims management company is used). There is a clear disparity in redress where someone uses an authorised person for employment law advice, and an adviser giving employment advice who is already regulated in any event as an authorised person. Legal advice This covers general legal advice on issues in addition to those dealt with specifically earlier in this report. What legal services are being offered and under what operating models? The LSB as part of its Business Plan 2013/2014 will continue to examine the scope of regulation and will assess in particular the risks posed to consumers by unreserved legal activities (general legal advice) irrespective of whether or not these are delivered by an authorised person 28. The LSB will also be assessing risks associated with DIY Law this would include for example, the use of online documents (see below). There are practical and political difficulties in seeking to regulate the provision of general legal advice and the Legal Services Board s coming consultation on this should be interesting. What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? At present there is no redress mechanism for consumers in relation to general legal advice about unreserved legal activities from an otherwise unauthorised person. Such advice from an otherwise regulated person would carry a redress mechanism. There is a clear disparity in redress where someone uses an unregulated legal adviser and an adviser otherwise regulated as an authorised person. DIY Documents

19 What legal services are being offered and under what operating models? Several companies now provide online legal documents. For example, AA Legal Documents, Law on the Web and Rocket Lawyer 29 all enable consumers to purchase legal documents which require the consumer to complete the blanks. There is scope for consumer confusion here as to the nature of what is provided; goods, or legal services? This becomes especially confusing where, for example, consumers with AA legal expenses cover get free access to legal documents and are entitled to a free half hour of legal review. Non-policy holders can also opt for a Lawyer Managed Document Review Service who will review and make amendments to draft documents where required. The terms and conditions used by the AA in this instance compound this confusion 30. The LSB will be investigating the consumer risk posed by online document services (2013/14 Business Plan). What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? It is not entirely clear (below) whether provision of these documents is classed as the sale of goods or provision of a service, but while the provision would attract some redress at common law in either case, there is no redress mechanism for such provision unless the provider happened to be otherwise authorised in any event. The Third Legal Services Market who else may provide legal advice (even if as an ancillary)? This market comprises advice from other advisers whose function may not primarily be as a legal adviser, but who may nevertheless give advice which may be perceived by the consumer as legal advice, in the course of providing another service. This could include advice which impacted or concerned the consumer s legal rights and obligations. Insurers What legal services are being offered and under what operating models? This is an active area of the market, particularly in light of legal aid cuts. Many companies now offer legal expenses insurance as an add-on to other forms of

20 insurance and consumers can also purchase stand alone legal expenses products and deal directly with a legal expenses insurer such as, for example, MSL Group 31 who offer packages for family law and others. The main legal expenses insurer has been DAS 32. They have just taken their offering a step further by acquiring a law firm and becoming an ABS 33. This means that the following examples could occur: A consumer buys legal insurance with another item. When something goes wrong the consumer will then receive advice directly from the insurance company. A consumer takes legal expenses insurance out directly with an insurer such as MSL group, and receives legal advice from MSL in the initial stages, before being passed on to a Solicitor if the matter becomes more complicated. A consumer takes legal expenses insurance out with a company such as DAS which is an ABS and receives advice from that ABS What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? In the latter scenario of dealing with an ABS, regulation would be provided by an Approved Regulator and redress would be available through LeO. In the other scenarios, LeO would not have jurisdiction and redress for legal advice from the insurer themselves would be available via the Financial Ombudsman Service 34 (FOS), which covers claims against an insurance company. The FOS website by its nature focuses on the financial aspects of a complaint against an insurer; its remit is based on regulated activities. The FOS covers a wide area of complaints, as they say themselves from pet insurance to stocks and shares, and it includes complaints about insurance. It cannot consider certain disputes but these are explained as being complex on their website and they advise consumers to call them to discuss. There is a link on their website to the rules governing excluded claims which is currently unavailable. In short, it is not easy for a consumer to know whether or not the claim is covered or

21 even what types of complaints will be considered. The Handbook is accessible via a google search but is difficult in itself for consumers to navigate in terms of signposting and the number of numerical hyper links 35. There are also time limits within which a complaint must be made a complaint must be made within 6 months of the date of the firm s response (and the response must mention this 6 month time limit) and within 6 years of the date of the event the consumer is complaining about (or 3 years from the date they knew or should have known that they had cause to complain). The FOS s powers include compensation for losses up to 150,000 (for complaints made after 1 January 2012). Surveyors What legal services are being offered and under what operating models? Many Chartered Surveyors offer a service restricted to property valuation. However, many Chartered Surveyors also additionally offer advice on matters such as the Party Wall Act 36, loft conversions and planning. Much of this could easily be classified by the consumer as legal advice. What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? If a consumer wanted to make a complaint about such advice, the Royal Institute of Chartered Surveyors 37 (RICS) deals with complaints against chartered surveyors whom it registers. Every regulated firm is required to have a Complaints Handling Policy (CHP) and consumers are advised that reference to the CHP may be found in its terms and conditions of engagement. A regulated firm s CHP will provide for a 2 stage resolution: Consideration of complaint by a senior firm member or designated complaints handler If the complaint cannot be resolved at step 1, then the complaint should be referred to an independent redress scheme. There are several independent See, for example,

22 redress schemes and the firm s CHP must give details of the redress scheme to which it refers complaints. The RICS itself has very limited powers to investigate: Failure to use a CHP Misuse of clients money Conflicts of interest Failure to answer correspondence A conviction of a criminal offence If the RICS do investigate a complaint on any of these bases, then they will decide as a preliminary matter whether the information provided by the consumer indicates that the member firm may have breached RICS rules and regulations. Their tone differs from that of, for example, LeO. They stress, for example, that: Your complaint is important to us as we want to ensure that RICS Members and Regulated Firms are operating within the Rules and Regulations. At the same time any complaint is a criticism of their professionalism and we must ensure that it is justified. If they decide that further investigation is required they can request documents from both parties. The investigation will be done as quickly as possible, but no time limits are set. If the investigation team believes a member of firm has breached RICS rules and regulations (and that they have been able to gather sufficient evidence of the alleged breach) then the RICS will refer the matter for disciplinary action. This action may include: Closing the case Negotiating a consent order with the member or firm this can agree restrictions for a period or impose a fine/ make an order re costs Referring to a RICS Disciplinary Panel (usually in public) They cannot: 22

23 Investigate complaints against anyone who is not an RICS member Determine whether a member firm has acted negligently Interfere with or become involved in court action against a member firm Pay compensation or instruct a member firm to do so. The Complaints Handling Procedure 38 provides that the CHP must include a redress mechanism that is approved by the Regulatory Board. RICS maintains a list of approved redress providers. One such approved redress provider is Ombudsman Services 39 who have a list of RICS providers 40 who have nominated their redress scheme. Ombudsman Services will consider complaints against registered members by individuals. The individual must have exhausted the internal CHP and the member firm has eight weeks to resolve the complaint internally. They will consider a complaint within nine months of the date of the first complaint to the firm/ company. Complaints might include: An apparent breach of obligations Unfair treatment Avoidable delays Failure to follow proper procedures Rudeness or discourtesy Not explaining matters Poor or incompetent service This Ombudsman cannot investigate: Complaints they consider to be malicious or unjustified 38 Guidance for RICS Firms Version 2 with effect from 01 February

24 Disagreements between the companies that participate in the Ombudsman s service Complaints that are already being dealt with by the courts or other complaints procedures Firms or companies which have not joined their service. The powers available to Ombudsman Services (Property) include ordering an apology or explanation of what has gone wrong, practical action to correct the problem, recommendations to a firm to avoid similar problems in future, and a financial award up to 25,000. Architects What legal services are being offered and under what operating models? Many architects provide advice on the serving of party wall notices and on planning permission. They may even become involved in the initial stages of a dispute. What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? Chartered Architects RIBA Most, but not all architects are members of the Royal Institute of British Architects (RIBA). These members are entitled to call themselves Chartered Architects. RIBA directs a consumer to the Architects Registration Board (ARB) in relation to complaints, but also stresses that a Chartered Architect must conduct him/herself in accordance with both the ARB and RIBA Codes. RIBA therefore has a separate, additional complaints process for a RIBA registered architect and will consider complaints against RIBA members for breach of the RIBA Code. RIBA themselves acknowledge: Difficulties can arise when insufficient information has been provided and there is an incomplete understanding of the architect's role and responsibilities in design, planning and construction processes. Incorrect 24

25 assumptions about the architect's role and duties in a project can lead to disputes 41. They have produced a document titled It s useful to know...guidance to help understand the architect s role in a building project and what happens if things get difficult 42. They encourage architects to be up front and clear with the client about their role. They encourage mediation and adjudication of disputes and set out the small claims limit where litigation may be necessary: as a last resort, they caution. Architects - ARB The ARB is a government established body tasked with regulating architects in the UK. They can consider complaints about a registered architect (it is a criminal offence to offer services as an architect without being on their register). They cannot: Order the architect to put right something that has gone wrong or award compensation for poor service Become involved in disputes about a contract or fee levels, or if the architect has been negligent. All of these are matters for the court Make the architect apologise. The ARB will only therefore consider unacceptable professional conduct or serious professional incompetence. Once information is received from the complainer and the architect the complaint is considered by an Investigations Panel. This is a 3 member panel 1 architect and 2 lay. The Panel has power to: Dismiss the complaint Give the architect advice about their future conduct Refer the complaint to the Professional Conduct Committee (PCC) for a full hearing. (The PCC can reprimand/ fine/suspend/ remove from register. The Panel try to reach a decision within 12 weeks of receiving it ers.aspx 42 October

26 Estate Agents What legal services are being offered and under what operating models? Estate agents may give consumers advice on planning, disputes and even the technicalities of the sale process when does this become legal advice? This can be confusing for the consumer where there are organisations consisting of connected services or business. For example, Bridgfords 43 are part of the Countrywide group and offer estate agency services; Countrywide also offer conveyancing services. From a consumer perspective the lines between service delivery may not be clear, regardless of any regulatory separation. What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? Unless an estate agent is already regulated as an authorised person (for example by the SRA) and therefore exempt, it must be registered with an OFT approved 44 redress scheme either the Property Ombudsman 45 or Ombudsmen Services, Property 46. The Property Ombudsman can consider complaints against a registered estate agent member where the complainant has already submitted a written complaint to the organisation and 8 weeks have passed from the date of that complaint, without the complaint being resolved. The Property Ombudsman can deal with unfair treatment, inefficiency and undue delay, breach of law, failure to fulfil obligations under any Code of Practice to which they subscribe, where there has been a financial loss to the consumer or avoidable aggravation suffered, distress or inconvenience. In terms of complaints they cannot deal with, most exclusions are procedural eg where a complaint is being or has been dealt with by a court, where the estate agent is not registered with the Ombudsman, where complaint relates to a survey/ valuation / mortgage or a solicitor

27 A case officer undertakes a (generally) paper based review and make a recommendation to the Ombudsman re decision. That may be: To support the complaint Not to support the complaint To propose a settlement. The Ombudsman will be influenced by the evidence that he sees and will be guided by best practice. He will always try to use common sense and arrive at a decision based on what seems to him to be fair and reasonable in all the circumstances The outcome of the case review is firstly sent to the agent, who has 14 days to either accept the decision or make a representation. The agent s response and the decision are then sent to the consumer who has 28 days to accept the decision or make their own representation. However, the Ombudsman can only change his/ her decision in limited circumstances, such as where it can be shown that there was a significant error in fact that would have had a material effect on the decision, or where either party can produce significant new evidence that will have a material effect on the decision. What powers does the Property Ombudsman have? It can criticise the agent for any failings or breaches of the Code of Practice where it applies. The impact of this is generally to require an estate agent to examine his/ her procedures and supervision, so that such failings are reduced or eliminated. However, on occasion, this criticism can result in the Ombudsman reporting a serious breach of the Code to the TPO Council for consideration of their further action against the Agent (which could lead to dismissal from the TPO Scheme). The Property Ombudsman can also make a financial award to compensate the consumer (paid for by the estate agent). The Ombudsman can make awards up to 25,000. He will do so if he is convinced that the complainer has suffered: Actual, proven financial loss as a direct result of actions or inactions by the agent And/or any avoidable aggravation, distress and inconvenience, over and above what is a stressful and inconvenient process at the best of times 27

28 To illustrate the size of awards the Ombudsman makes, this has been the range of awards over the last three years 47 : 1-99 (159) (645) (162) 1,000-2,999 (107) Over 3,000 (31) The Ombudsman may ask the agent to apologise to the consumer. The Ombudsman does not publicise decisions, but does publish abridged and anonymised case summaries on its website and in the Ombudsman's quarterly and annual reports 48. The other approved redress scheme for complaints against estate agents is Ombudsman Services - Property. Accountants What legal services are being offered and under what operating models? There are several different types of accountant and associated regulatory bodies eg management accountants who are regulated by the Chartered Institute of Management Accountants (CIMA) and chartered certified accountants who are regulated by the Association of Chartered Certified accountants (ACCA). However, chartered accountants regulated by the Institute of Chartered Accountants of England and Wales (ICAEW) or the Institute of Chartered Accountants of Scotland (ICAS) are the most likely type of accountants to provide advice to consumers. For example they can offer a range of services where the boundary between financial, accounting and tax consultancy on the one hand, and legal advice on the other, becomes blurred. For example, an individual may use an accountant s services to obtain financial and estate planning, tax planning advice. There may be a regulatory overlap in the case of a chartered accountant who is also an Insolvency Practitioner and/or a Certified Tax Adviser. In December 2012, following previous applications by ICAS and ACCA, the ICAEW applied to become an Approved Regulator of legal services. It has expressed an intention to license existing accountancy firms to carry out probate services which

29 are a reserved activity and had indicated that its interest would extend to will writing. This may lead to further confusion from a consumer perspective about which other services provided by an accountant can be classified as legal. If an accountancy firm set up a separate ABS probate business, this could also mean that a consumer receiving probate services from an ICAEW regulated ABS, but with redress available through LeO. Depending on how such a service was marketed this could be confusing for the consumer. This is something that will clearly need to be taken into account by the LSB when considering the ICAEW Approved Regulator application. If an accountancy firm simply provided such services as part of an Multi Disciplinary Practice, the position is potentially more complicated with the possibility in future of regulator and Ombudsman shopping, for example, an MDP ABS may be in a position to choose its Approved Regulator and associated Ombudsman (in the absence of further regulatory guidance on this from the LSB or agreement between Approved Regulators). What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? Each accountancy regulator has its own complaints procedure. Focussing on redress against Chartered accountants in particular, the ICAEW has a complaints procedure that provides 49 : Complaint to be made directly to the Chartered Accountant who must respond to the complaint within 28 days. Their jurisdiction is not clearly set out, but they do explain that Although we may be able to deal with certain issues of professional conduct related to the dispute (such as obtaining a breakdown of the bill), only the courts can pass judgement on contract terms. If they can deal with a complaint they will offer conciliation or investigation The ICAEW state that the investigation Concentrates on whether we can discipline the accountant They estimate the time for a complaint to be investigated as being from 3 months to a year, or more The ICAEW has no powers to make a member or firm pay compensation

30 Tax Advisers What legal services are being offered and under what operating models? Again, tax advisers can provide a consumer with a range of services where the boundary between tax consultancy and advice on the one hand, and legal advice on the other, becomes blurred. For example, an individual may use a tax adviser s services to carry out financial planning which could involve acquisition and disposal of assets, estate planning and tax planning advice. What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? The Chartered Institute of Taxation (CIOT) professes that it is the leading body in the UK for taxation professionals dealing with all aspects of taxation. Our primary purpose is to promote education in taxation. Its website has a member rather than consumer emphasis. The Complaints Procedure is not prominent. It links to the website of the Taxation Disciplinary Board (TDB) 50. This Board is an independent body that runs the complaints and disciplinary process for 3 taxation bodies the CIOT, Association of Taxation technicians (ATT) and Institute of Direct Taxation (IIT). When a complaint is made to the TDB, a completed standard complaint form will be examined by a Reviewer (officer of the Board). The Reviewer will consider whether the complaint falls within the jurisdiction of the TDB, and that the complaint has been submitted in time (within twelve months of the events which form the subject matter of the complaint). The Reviewer then investigates the complaint and in most cases will refer the complaint to an Investigation Committee for further examination. The TDB caution that it is likely to take three or four months for a complaint to reach the Investigation Committee. No guidance is given about the jurisdiction or types of complaints that can be considered. The Committee can reach a decision on the basis of written evidence (no time limit) and there is a right of appeal for both parties to an Investigatory Assessor (no time limit). S/he can refer it back to a different Committee or may uphold the decision of the initial Committee. Alternatively the Committee can decide that a hearing is necessary before a Disciplinary Tribunal which sits in public. The Tribunal has a wide range of powers available to it it can eg require an apology, impose a fine or suspend or expel a

31 member. The Tribunal also has power to award compensation where it finds that there has been Inadequate Professional Service (limits not specified). There is a final right of appeal against the decision of the Disciplinary Tribunal, but only to the member. No right of appeal is available to the consumer. A member may appeal on the basis that there has been a serious procedural or other irregularity in the Disciplinary Tribunal, that the finding or sanction was wrong or unreasonable or that new evidence has become available which, would materially have affected the finding of the previous Tribunal. Financial Advisers (and Banks) What legal services are being offered and under what operating models? An independent financial adviser may give advice (among others) on investments, home finance activities, and funeral plan contracts. The business models operating in this area are therefore disparate, ranging from large operators such as Brewin Dolphin to niche operators such as Age UK and its appointed representatives on Funeral Care Plans and other age related products, and free, government backed organisations such as the Money Advice Service 51. Advice given by each operator could touch on issues perceived by the consumer to be legal advice such as home ownership, title problems, and probate matters. Consumer perception may become further blurred as organisations such as, for example, the Co-op Group provides services across several sectors these are provided by separate companies, but with a shared brand identity. Co-operative FuneralCare do state on their website that they are able to provide legal advice through Co-operative Legal Services but it is not difficult to see that this distinction may be unimportant to the consumer who may be given advice from Funeralcare on eg probate procedure and timescales that stray into legal advice. Some organisations without the ethos and training capabilities of Co-operative Group may be less prepared to manage formal and informal separation of activity (even if it is required by eg the SRA Code of Conduct). The Financial Conduct Authority (FCA) invites 52 consumers to report unauthorised firms and maintains an extensive list of unauthorised firms to avoid. It encourages consumers to check the FCA online Register to ensure that a financial adviser is indeed authorised

32 What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? The Financial Services Act 2012 abolished the Financial Services Authority (FSA) and introduced a new regulatory framework for financial services. The Act came into force on 1 April It replaced the FSA with other bodies, one of which is the Financial Conduct Authority (FCA). A financial services adviser can only conduct regulated financial service activities 54 in the UK if they are authorised by the FCA to do so. The FCA provides that: Complaints should be made to the firm in writing and the firm should respond to the complaint within 8 weeks. If the firm has not responded within 8 weeks, the complaint is rejected or the consumer is otherwise unhappy with the response, then they may pursue a complaint with the Financial Ombudsman Service (FOS) see above at Insurers. Debt managers bailiffs What legal services are being offered and under what operating models? There are restrictions on what belongings a bailiff may take from a property and a bailiff could become involved in a discussion with the debtor about the respective rights of the bailiff and the debtor. This could be perceived by the debtor as legal advice rather than simply a statement of intent. For example, a bailiff maintains that he is entitled to remove an item which the debtor regards as an essential item, or which the debtor asserts belongs to someone else. The consumer could perceive the bailiff as an agent of the law, and therefore as a legal adviser. The Citizens Advice Bureau has concerns about harassment from bailiffs and claims that they have seen a 38% increase in the last 5 years in problems with private 54 The regulated activities are detailed in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 which is secondary legislation under the Financial Services and Markets Act Regulated activities include banking; insurance; mortgages; credit cards and store cards; loans and credit; pensions; savings and investments; hire purchase and pawnbroking; money transfer; financial advice; stocks, shares, unit trusts and bonds. 32

33 bailiffs and that In the last year alone, two and a half times more people have sought online advice about bailiffs 55. What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? An individual may want to complain about a bailiff on the basis that they have taken goods that belonged to someone else. There are 3 possible complaint options, depending on whether the bailiff works for a private company (a private bailiff) or is a county court bailiff or a civilian enforcement officer who works directly for the court. Redress against a private bailiff is very limited the government advises 56 that you should simply write to the bailiff s company and if there is no response, write to the organisation who instructed the bailiff. If the private bailiff is a member of a trade association, then a consumer can also seek redress via that association. Eg the Civil Enforcement Association (CivES) has 41 members and provides that once a consumer has written to the bailiff, allowed them time to respond and remains unsatisfied they can pursue that complaint further with the CivEA. The complaint is assessed on the basis of written documents. If the consumer is unhappy with the decision then they can seek to appeal it, but CivEA will determine whether they feel an appeal to an Independent Panel is justified. The nature of complaint to be considered and powers available are not detailed by CivEA. The High Court Enforcement Officer Association 57 (HCEOA) deals with complaints against a High Court Enforcement Officer. There is some ambiguity on the HCEOA website about the complaints they can consider, for example: 2 You should first make your complaint to the relevant High Court Enforcement Officer. Most High Court Enforcement Officers' are employed by a company providing enforcement services. You can get details of the company address for all High Court Enforcement Officers' from our Secretary (please see point 6). 3 You should only make a complaint to us if the case involves a selfemployed High Court Enforcement Officers. You can get details of the High Court Enforcement Officers' who are self-employed or members of a trading organisation from our Secretary

34 Once the internal complaint has been exhausted, the HCEOA are obliged to tell the complainant with reasons within 21 days whether or not the complaint will be investigated. They will not consider disagreements about the amount claimed on the writ, or whether a writ is legal but will consider complaints about the behaviour of the bailiff. This lacks clarity as far as any problem arising from what may be perceived as legal advice is concerned. Their Complaints Board will consider the complaint and may hold a hearing if it wishes. If the Board accepts the complaint, its powers are: give instructions about their behaviour, which the High Court Enforcement Officer must follow in the future; give general instructions about behaviour to the Company the High Court Enforcement Officer works for; punish the High Court Enforcement Officer; make the High Court Enforcement Officer pay up to 15,000 in penalties; or recommend to the HCEOA that the membership of the High Court Enforcement Officer is removed and take the case (and report from the Complaints Board) to the Lord Chancellor. The board will make recommendations about whether the High Court Enforcement Officer should continue to be a member, or whether they should be an authorised High Court Enforcement Officer. Insolvency Practitioners What legal services are being offered and under what operating models? Insolvency Practitioners (IPs) are regulated by the Insolvency Practitioners Association (IPA) or by an accountancy body, if the provider is an accountant. In the consumer context, IPs are able to advise on all formal insolvency procedures such as bankruptcies, sequestrations, individual voluntary arrangements and trust deeds. Consumer facing services such as these are available from a range of insolvency practitioners 58. Free individual voluntary arrangements (IVA) help is also available from any registered debt charity, for example, such as Debt Support Trust and Debt Advice Foundation. Such advice has huge legal implications for the individual and may frequently involve considering the position on legal ownership of assets, such as liabilities and rights to 58 eg

35 be asserted in relation to property, and the rights and powers of creditors and whether bankruptcy or an IVA is preferable. This is advice that has a legal impact and could be perceived by a consumer as legal advice. What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? Several bodies are authorised by the Secretary of State for Business and Skills to licence and regulate IPs. There are 9 recognised professional bodies under s391 of the Insolvency Act 186 who authorise IPs, including the ICAEW, ACCA and the Law Society. These bodies include the Insolvency Practitioners Association (IPA) 59. The body by whom the IP is licensed will consider any complaint that arises from the IP s conduct. The IPA states that in most cases the IP s firm will have its own internal complaints policy that should be exhausted first, before contacting the IPA. The IPA s role in considering a complaint is to determine whether disciplinary proceedings should be brought against the member. The IPA will take disciplinary action against any member where there is evidence of serious breach of required standards. They aim to substantially complete an investigation within 6 months. They have power to issue a warning letter, a consent order, refer the complaint to a disciplinary committee, withdraw a licence. The IPA has no powers to award compensation. There are disparities in redressing depending on which recognised professional body authorises the IP in question. Mediators What legal services are being offered and under what operating models? Advice could be provided by mediators across a range of areas. One such area is family law, selected on the basis that family law is fertile ground for complaints to LeO. Some mediators associations such as National Family Mediation 60 do state that mediators do not provide legal advice. Nevertheless, they state that a mediator can help achieve agreement on financial matters, separation and divorce. The consumer may find it difficult to appreciate that advice is not being given. Some law firms provide a mediation service Eg. 35

36 What redress mechanisms are available (if any) in these services? What powers are available to the complaint handler? If a consumer wanted to complain about a mediator then redress depends on who the mediator was rather than advice given. For example, if a law firm is also providing a mediation service then they will be regulated by the SRA. Whether redress may be obtained through LeO is not clear as the mediator is neutral between the parties and it would therefore be difficult for Leo to deal with a complaint that was seen to favour one party over the other. The Family Mediation Association 62 has a Code of Practice and a Complaints Procedure which covers its members, which provides that all of its members must have a written complaints procedure to be given to clients. The mediator s complaints process should be exhausted first and then it may be followed up with the Association which will implement its own complaints procedure. No further details are provided to the consumer via the website. There is a disparity therefore between redress for mediation provided by a mediator and an otherwise authorised person

37 Consumer Protection - legislative remedies In addition to these redress mechanisms, a consumer has rights at common law arising from the contract between the provider and consumer for the provision of advice and services. Existing statutory protection for consumers differentiates contracts for the provision of goods, and contracts for the provision of services. Even in the latter category, the current law distinguishes between contracts for services where the service is accompanied by the supply of goods (or where the service includes the manufacture of goods) and pure service contracts where only services are provided 63. Most legal services would be pure service contracts. In such contracts section 13 of the Supply of Goods and Services Act 1982 (SGSA) provides that in a contract for the provision of a service by a supplier in the course of a business (which would include a legal services supplier) there is an implied term that the supplier will carry out the service exercising reasonable care and skill. In such a case, a legal services provider could be held to have failed to act with reasonable care and skill. This will be the case where the provider has failed to exercise the standard of care that would have been exercised by a reasonably competent member of the trade or profession in question ie the Solicitor or CILEX fellow or unqualified paralegal. However, there are many situations in which goods and services are provided together. This is, of course, more obvious in the case of eg new parts supplied for a central heating system but can also occur in a contract for the provision of professional services such as legal advice. For example, it would be possible for legal advice to be provided along with tangible materials such as legal documents. This is something which may occur more often in future with the unbundling of legal services and provision of some DIY documents and document checking services. In that case, legislative protection depends on what can be said to be the substance of the contract the services or the goods? If the service is the substance, and the goods are incidental, then the contract would be governed by the SGSA. If goods are the substance of the contract then the Sale of Goods Act 1979 (SGA) would govern the contract and the SGA would imply terms regarding description, quality and fitness for purpose. SGSA would still apply to the service element of the contract. What of the situation where tangible goods such as documents are provided on a stand-alone basis eg this is an option with AA Legal Documents? The provision of documents would be classed as a sale of goods. Where for example, there was a defect in the documents, SGA would provide implied terms about quality and fitness for purpose which are judged by outcome based standards ie the question is not about reasonable care and skill as with SGSA, but whether the goods meet their 63 SIS Consolidation and Simplification of UK Consumer Law November 2010, p4 37

38 description, whether they are of satisfactory quality or whether they are reasonably fit for a particular purpose. The position becomes even more complex where the service provided actually caused the defect in the goods ie incompetent drafting creates a legally flawed document. In such a situation, the current law is unclear as to when and how the law may impose an outcome based standard 64. As the basis of establishing liability under the SGSA and SGA differs, the remedy available to consumers may also differ. For pure service contracts, remedies are a matter of general contract law. Depending on the status of the term the appropriate remedy would be damages for a more minor breach and a rescission (an unwinding) of the contract for a more major breach. The fact that remedies are not set out in statute makes remedies for a poor quality of service, at common law, inaccessible to the consumer. The remedies available to consumers are a mixture of common law and statutory remedies. This leads to confusion to consumers about exactly what their remedies are. For example, the right to reject goods if they are not of satisfactory quality is a common law right. Additional consumer remedies e.g. the right to replacement goods or to rescind the contract are statutory remedies. It is well recognised that the remedies are confusing and in fact lead some consumers to believe they actually have better remedies than those the law actually provides. The Department of Business, Innovation and Skills (BIS) have recommended that the remedies for both pure service contracts and mixed contracts be put on a statutory footing to a much greater extent 65 and suggest that the law in relation to services should be comprehensively codified. They acknowledge it would be a significant undertaking and it would require confronting and resolving some controversial issues. But in terms of clarity and accessibility, this is the best solution. It may be that this is dealt with in the forthcoming Consumer Rights Bill. The Unfair Terms in Consumer Contract Regulations 1999 could also apply to a contract for the provision of legal goods or services and would allow consumers to challenge standard terms in a contract which they consider unfair. The Regulations have for example been used to challenge standard terms in a Chartered Architect s contract 66. The OFT has powers under these Regulations to investigate a claim made by a consumer about such a term and to take action against the supplier. There is likely to be a lack of awareness among consumers about such legislative tools, as they are not signposted to the consumer as part of the contracting process. 64 Op cit p53 65 Op cit p89 66 Munkenbeck & Marshall v Harold [2005] EWHC 356 (TCC) 38

39 These 1999 Regulations are also expected to be reconsidered in the Consumer Rights Bill. The balance of power in the provider/ consumer relationship The Legal Services Act 2007 sought to liberalise the legal services market and increase competition among different types of provider. This liberalisation of the legal services market is predicated on the basis that increased supplier competition will raise standards and improve access to justice for the consumer. This was in line with the then current, general governmental approach to consumer policy typified by the 2004 consultation by the DTI Extending Competitive MARKETS: Empowered Consumers, Successful Business which stated 67 : Competition is driven by empowered consumers, who can make informed choices, and who are prepared to assert their rights and to complain about poor quality goods and services. If consumers cannot choose effectively between different products or services, then they are not putting any pressure on the poorest traders to improve. And if people simply put up with poor quality services, then those traders who provide good quality services do not receive any more customers than those who are substandard. Thus the emphasis was on the consumer to make informed choices, based on quality. Several commentators 68 have noted that in the context of legal services, it is difficult for consumers to judge the quality of service delivered. Recent research for the LSB 69 explored the division of risk and responsibility between consumers and providers in the legal services market, as part of the LSB s wider research into what is considered an acceptable level of risk for consumers of legal services. They found that there was little knowledge of existing protections (ie for the core authorised legal services market) and that there was limited ability to differentiate between different types of legal service provider such as solicitors, licensed conveyancers and will writers. For example they found that there was little knowledge about unlicensed will cited by in Howells, G The Potential and Limits of Consumer Empowerment by Information Journal of Law and Society 2005 Vol , at Roy, A (March 2011) Legal Services Board: Understanding the economic rationale for regulation a collection of essays; bdrc continental (2012) Legal services Benchmarking Report Vanilla Research: Risk and the role of regulation, January

40 writers, with some participants thinking they were just solicitors who specialised in wills. 70 If the consumer finds it hard to judge quality and make effective choices on that basis, this is compounded by confusion about the status of legal service providers. For example, consumers find it difficult to differentiate between solicitors and barristers, regulated and unregulated providers. A recent Report 71 for the Office of Fair Trading (OFT) alleges continuing confusion for consumer. Thus, there are currently limitations on the consumer of legal services acting as a force to determine the shape of the legal services market. The Legal Services Consumer Panel (LSCP) has warned very recently, Don t leave consumers in the dark yet expect them to vote with their feet. The LSCP found 72, inter alia, that only 30% of people think lawyers are well regulated, only 22% of consumers shop around for legal services and 42% of people do nothing when dissatisfied with the service they receive and only 1% of consumers use comparison websites to find lawyers and just 4% refer to an accreditation scheme: 3.15 The evidence suggests there are low levels of shopping around and many consumers who do search find it difficult to make comparisons although this data has improved slightly over time. The absence of credible choice tools inhibits comparisons. Referrals by commercial intermediaries are widespread, but this tends to produce lower service satisfaction ratings than other selection methods. 73 Given the importance afforded the consumer in shaping the legal services market, and the focus across government policy generally on the empowered consumer, there have been several studies on this carried out, some of which are pulled together and analysed by the LSCP. They cite, for example, research 74 that found 70 Op cit, p12 71 Europe Economics, Economic Research into Regulatory Restrictions in the Legal Profession report for the Office of Fair Trading, LSCP Report Phase 1 Empowering Consumers LSCP January2013 Empowering Consumers Background Paper 1: Possibilities and Limitations 73 Op cit 74 BERR (now BIS), Benchmarking the performance of the UK framework supporting consumer empowerment through comparison against relevant international comparator countries, University of East Anglia, 2009 cited in LSCP op city at p7 40

41 that in terms of legal framework and consumer interface (this included information and consumer advocacy), the UK was on a par with the best, but that further progress was needed on redress mechanisms 75. Consumer Empowerment Putting the consumer at the heart of shaping the market relies on notions of consumer sovereignty that is that the consumer demand will determine prices and that effective consumer demand will govern all economic phenomena and optimally satisfy itself 76. Gonse himself lists a critique of what could be seen as a theoretical argument, and notes that other factors will also shape the market such as the efforts of the producer in selling, income distribution among consumers, mass production of standardised products and real costs 77. This is also noted by Oxera in the context of legal services. Oxera note that the legal services market comprises a set of diverse markets and in some there are factors which indicate likelihood of market failure. For example, Oxera note 78 that various factors can contribute to the failure of a market such as the legal services market such as asymmetric information (which can mean that the consumer is less well informed about the service than the provider and is less able to judge the quality of the service provided), asymmetry of market power where, for example, there is a geographic or sector based supplier shortage, and consumer switching and search costs that mean choosing or switching supplier is not easy. Nevertheless, consumer choice will be a key factor in shaping the market and there are limitations on the extent to which this is currently happening due to lack of empowerment of the consumer. On a practical level, the LSCP note that where information a consumer needs to use their buying power is spread over various websites, this means that the consumer is not shaping the legal services market in the way that was hoped. The emerging knowledge economy and in particular the availability of information (mainly but not wholly through the internet) has impacted on the role of the consumer in shaping the market, and on the nature of consumer empowerment. Newholm, Laing and Hogg have carried out research examining the nature and dynamics of consumer empowerment in the context of this emergent knowledge society. They 75 Op cit p17 76 Gonse (1990), cited in Newholm, Laing and Hogg Assumed Empowerment: consuming professional services in the knowledge economy European Journal of Marketing 2006 Vol , at Op cit Oxera op cit

42 focus in particular on this in the context of professional advice, conducting research among providers and consumers of medical, financial and legal services. Specifically, they sought to explore the impact on the consumer/ professional exchange as a result of the consumer using information available by, eg. the internet, whether that be the patient printing off information from NHS Direct, or a would be divorcee with information from the internet. They argue that while the debate about consumer empowerment in a professional context has a long pedigree 79, the use of the knowledge economy has altered the debate, but caution that the approach of consumers should not been seen as uniform: the attitude and impact of the consumer as a market force will be shaped by their capacity to use information available, and their willingness to use that information to alter the balance of the consumer/ professional relationship. They found that the majority of professionals were sceptical about the idea of consumer empowerment, and across all 3 sectors there were concerns from the professionals that consumers would not effectively use knowledge available because of barriers to empowerment such as: Lack of understanding Lack of interest Apathy Excessive emotion Lack of objectivity Lack of context of the bigger picture Lack of technical skills The consumers in the research generally typified their relationship with professionals as a struggle to have their credibility in the field accepted. A key factor in this was the language used by professionals as a barrier to empowerment. In terms of the way in which the consumers wanted to use knowledge to alter the balance of the relationship, they were found not to be seeking empowerment to the extent of parity or dominance but rather to achieve a dialogue. A small number of professionals saw this as a way to use empowerment to enhance the professional 79 Newholm et al op cit

43 role and service delivered, by achieving more of a two way discussion 80.They also found that knowledge was used in different ways across the 3 sectors studied, for example a consumer of legal services might check information beforehand but would still seek professional advice, whereas in relation to financial services or a small medical problem that might differ, and online information could supplant professional advice. They identified that to use knowledge as empowerment required: interest + expertise + cultural capital They define cultural capital as an expectation of empowerment. Thus facts are not enough changing values and attitudes to challenging professionals are also key. Some in the study had used knowledge to switch provider, while others had used it to change professional behaviour and service, effectively to alter the professional conversation. Redress mechanisms and common law protections have a role to play in helping the parties alter that professional conversation. These elements are interconnected, and in practical terms this means: Interest recent research for the OFT 81 illustrates that a key barrier to complaining (for those dissatisfied with the service received) was that respondents did not think complaining was worthwhile given the amount of the respondent s time the process would require, and that they did not know they could complain. Consumers need to know as a minimum that they can complain and that a redress mechanism is available. Expertise another key barrier was concern that the process was not worthwhile given the amount of the respondents time it would take, and potential costs. Empowered consumers need to know how to complain and to understand the process, and have a redress mechanism there to facilitate complaints rather than act as a barrier to them. Cultural Capital Consumers need to know that it is acceptable to complain. As a starting point this will be encouraged by knowledge that others complain, that the complaints process is there to ensure confidence in a body of advisers and that redress is available. This requires provision of information, to begin to change attitudes to professionals. 80 Op cit Europe Economics op cit 43

44 Vanilla Research for the LSB found minimal knowledge of existing legal protections, even among those who had experience of using legal services (some of whom had substantial experience). They identified the central issue as being the difficulty of the consumer knowing when to complain and being able to judge the quality of the legal services they have received. They found that consumers feel vulnerable in the legal market and have much less confidence than when dealing with problems such as eg faulty white goods where problems are tangible. They cite 82 one participant who illustrates the extent of the gulf to be addressed in empowering some consumers in relation to a legal adviser: How would you whether they were incompetent? I don t know where the law goes or where the law stops or how they begin or what to do, so if they do something, how do you know if they have messed up? What they tell me, for me is gospel. I don t know any different What choice tools might help empower the consumer? As the champion of the consumer of legal services, the LSCP echo the elements of consumer empowerment (above) and emphasise the role of the regulatory framework in facilitating empowerment: Consumer empowerment involves two broad elements which interact to create the conditions for consumers to thrive. Firstly, the resources consumers have at their disposal to make better choices. This includes a certain state of mind (confidence and willingness to play an active role), decision-making tools such as good information, and the skills to use these tools to make effective decisions that secure positive outcomes. Secondly, the institutions for example, the competition regime, consumer protections and regulatory organisations that support consumers to shape markets. 83 This broadly reflects the interest + expertise + cultural capital argument of Newholm and others (op cit). In practical terms, they also identify some impediments to empowerment as being: 82 Vanilla Research op cit p10 83 LSCP March 2013 Empowering Consumers op cit 44

45 Even within the professional services sector, consumers say they find it especially difficult to compare the quality and price of legal services. We have examined a range of data relating to public confidence and the consumer journey in legal services. This reveals problems of low trust in providers and little faith in regulators, knowledge gaps about consumer rights and of what lawyers do, inaction in response to some serious legal issues, lack of shopping around and minimal use of choice tools, communication breakdown while cases are progressing, and some serious barriers to complaining. Across consumer policy generally, Howells infers a preference for informational protection rather than intervention. This is the preferred approach of the LSB for whom intervention must be justified by associated consumer risk. Howells therefore explores their potential and limitations as consumer protection tools: Information Information is an integral element of the interest and expertise required to empower the consumer 84. A consumer information strategy can include information provided by the services provider and negative information held on providers. Information alone however, is not enough. Howells identifies limitations, such as: Lack of time do not assume all information will be read Is it a middle class tool? He states: those who take advantage of information are likely to be the more affluent, well educated, middle class consumers 85 It may be that different types of consumers need different types of information? What sort of information do low income or vulnerable consumers need? Lack of alternatives what use is the information if you have no alternative. There may for example, be areas of the country where a consumer has limited geographic choice of provider, or providers in certain sectors become scarce. Market impediments to switching 84 Along with cultural capital 85 Howells op cit

46 Behavioural economics suggests that the focus on the average consumer, who acts rationally and is observant and circumspect is a mistake. Many consumers, Howells argues: Have limited ability to understand and process information Can interpret information in a self serving way Can be over optimistic about avoiding risk, and do not always accord information its proper significance are affected by the presentation of information and this can impact their use of information are affected by the way marketing influences use of information What does this mean in practice for the consumer? A nuanced approach to information is needed Too high expectations should not be placed on information The ideal content of information should be carefully considered Information should be made most accessible and brought to the consumer s attention Information must be effectively targeted Information alone therefore is not enough at very least it has to be tailored to the consumer. It could be argued that regulatory requirements on information provision are not always done with the intent of informing the consumer, but of avoiding litigation and can be self defeating. This could be said to be true of client care letters under the pre-2011 SRA Code of Conduct, but the 2011 SRA Code of Conduct requires them to be drafted in such a way as to be clearly understood by that particular client SRA Code of Conduct 2011 Chapter 1 46

47 Risk Allocation Vanilla s research for the LSB looked at how much of the risk in a transaction the consumer was prepared to accept. It indicates that consumers do not want extreme empowerment which would equate to self service, and are uncomfortable with assessing risk themselves. Those sceptical about the power of information caution that in providing more information, it can be done in such a way as to present the consumer with narrow, set choices within the producers regime of truth 87. There is a balance therefore between making information available to help empower the consumer and helping equip the consumer to use it, and prescribing and narrowing choices. Comparison websites Consumers find it difficult to judge the quality of service received. In a Tripadvisor equivalent for legal services, it would be difficult for consumers to rate their experience. It has been argued that in order for comparison sites to work, some objective data is required. There may, for example, be scope for regulators to use access to their data as a lever to improve the credibility of comparison websites, for example by restricting access to those sites meeting specified licence conditions 88. However, the OFT has warned about the risks of this approach creating market concentration, promoting inferior choice tools which become the default option for consumers and limiting providers ability to innovate and respond swiftly to consumers needs. Accreditation schemes or badging The LSB has previously accepted a recommendation from the LSCP to explore the viability of a single regulatory badge that would help consumers to identify more easily all authorised persons. This followed research which suggested consumers falsely assume that all providers of legal services are regulated, and so they do not understand the implications of choosing between regulated and unregulated firms. There has been no public progress on this 89. Culture and signposting 87 Howells op cit LSCP March 2013 Empowering Consumers op cit at 4.26 and LSCP (February 2012) Comparison Websites 89 Op cit at

48 While there may be deeper cultural issues to be addressed, doing so will be a longer term project and this does not mean that simpler steps cannot be taken in the meantime to assist the consumer. Vanilla found that over and above cultural issues, there was also a lack of awareness of protections and redress available that could be improved with greater signposting and communication by providers. Previous research for LeO 90 found that there was low awareness of the complaints process. The impact of this was that a consumer will only complain where they are aware that they have a right to complain, they understand how to make it, they know who to complain to and when they should make it. Many of the redress mechanisms in this report fall short of facilitating complaints in this way. Potential Impact of the Unempowered Consumer It is useful to note the potential impact of an unempowered consumer in shaping the future market. The Law Society has recently carried out detailed analysis of the legal services sector 91. They set out 4 possible models of the future legal services in These range from: The Law is an APP, where there is high growth and high demand for legal services and only the fastest adapting suppliers survive. The consumer is increasingly powerful, but uses internet to explore self help, has little loyalty to providers and is emboldened by the availability of tailored information that minimises the information asymmetry between buyers and legal service providers. This is a utopia for the consumer, who also has high expectations of delivery and outcomes. The consumer plays an active role in shaping services. What enabled the consumer to do this? Tailored information, internet access, high wages, wider use of the general terms lawyer and a concern that a service is regulated effectively rather than about the job title ascribed to the provider. The other 2025 scenarios move away from the consumer utopia and look at eg: Wise Counsel model - a market predicated on the consumers need to have an expert sort everything out for them/ remove the burden of playing a part in that resolution themselves. This arises because high demands on family 90 You Gov June 2011 First Tier Complaints Handling 91 The Law Society Market Assessment 2012 accessible at 48

49 time and pressured economic conditions, and the fact that buyers are overwhelmed with too much, irrelevant information means that the consumer s power to shape the market is limited. Consumers continue to rely on job titles as a proxy for quality. Their third scenario Mini Clubmen is a more nationalistic, inward looking version of Wise Counsel which blunts demand, with consumers remaining recipients : passive, with information asymmetry a continuing problem. The final scenario Bleak House paints a bleak picture for providers but a less bleak picture for consumers. Consumers are again empowered by the availability of tailored information and shop around, negotiating on price and having high expectations. This is bleaker for the consumer only in as much that the suppliers have not raised their game in response to such push from the consumer and this ultimately leads to diminishing choice for the consumer as the supply side of the market stratifies with specialist niche practices and high volume low profit operators. Where might redress mechanisms do more to empower the consumer? Complaints are a key way for consumers to express dissatisfaction and seek recompense and censure for a provider. Aside from simply shopping with their feet, pursuing a complaint can achieve longer lasting impact on service provision in future. Redress mechanisms have a key role to play in empowering the consumer and ensuring confidence in service provision. The LSCP Chair noted in the context of the NHS 92 that in launching a review to ensure that the NHS listened to, and acted upon, patient concerns, that the Health Secretary had stated: complaints can be the earliest symptom of a problem in an organisation, and the NHS should use them to learn from and improve their service At the moment, the LSCP claims that: The evidence suggests only half of people are confident complaining to a lawyer and many dissatisfied consumers do not complain or give up 92 Blog 21March

50 before their complaint is satisfactorily resolved. People are confused about what to do, get overwhelmed by legal jargon, believe they won t get a fair hearing and fear that upsetting their lawyer could have repercussions for their case. Signposting rules that would help alert consumers to their right to complain are not working effectively. 93 More specifically: 42% of people do nothing when dissatisfied with the service they receive 23% of consumers decide not to complain to their lawyer because they have no confidence their complaint would be resolved fairly 70% of consumers who are dissatisfied with how their lawyer handled their complaint abandon their complaint at this stage Only 35% of complainants to the Legal Ombudsman recall being informed about the organisation by their provider As long as there is some redress should it matter how it is found, whether from the Property Ombudsman, the ARB, the FCA or LeO? If it is the case that there are cultural barriers to complaining even where the relevant redress mechanism is clearly signposted, this is compounded by any confusion arising about who to complain to, and how. If such confusion is a further barrier to effective redress, then the answer must be, yes. This accords with further research for the OFT which found: The potential for consumer confusion on where to lodge a complaint has been reduced with the creation of the Legal Ombudsman but has by no means been eliminated. A recent YouGov consumer survey suggests that there are around three million users of legal services annually in the UK, of whom 15 per cent indicated they were dissatisfied with legal services on the last occasion they used them. The survey also suggested that only about 13 per cent of dissatisfied users went on to make a complaint. Evidence from other recent surveys suggests that confusion 93 LSCP March 2013 Empowering Consumers op cit at

51 regarding how to complain could be one reason why dissatisfied consumers do not go on to make a complaint. 94 Just as information is only part of the equation in empowering a consumer, empowering a consumer is only part of the story in shaping the market: it is also important that the regulatory infrastructure and redress mechanisms, as a consumer protection measure, facilitate the consumer as an agent of change. The LSCP has argued that: Empowering consumers is a desirable objective, but there should not be an overreliance on this to deliver the regulatory objectives. The LSB should develop a policy attitude which recognises the need to make the consumer protection framework fit for purpose in order to give consumers justified confidence to drive competition in the market 94 Europe Economics for the OFT op cit Executive Summary 51

52 Conclusions The core authorised person legal services market is already confusing for the consumer who may find it hard to differentiate between eg a Chartered Legal Executive and a Solicitor. The Alternative Legal Market may to some extent be indistinguishable from this market. This is complicated further by advice on legal issues given by other professionals and advisers such as, for example, planning advice from an architect, or probate advice from a financial adviser (the Third legal market). Redress available in terms of advice on legal rights and obligations varies depending on by whom the advice was given 95. If Clementi anticipated that, Where consumers are well informed, the availability of providers regulated in different ways expands consumer choice: buyers can choose a more expensive service with regulatory protection or a cheaper service with limited protection 96 then there is an absence of evidence that the consumer is equipped to make these choices and evidence of confusion, and a lack of willingness to pursue redress when dissatisfied. There are already asymmetries of information and a lack of consumer empowerment in the provider/ consumer relationship. Set against a fragmented market with a regulatory web, this makes redress difficult for the consumer. This is in the context of a legal services environment where consumers are at the outset pessimistic and drained by the thought of pursuing a complaint. It is arguable that the current system represents a series of barriers to complaining rather than a facilitation mechanism designed to provide redress where appropriate, with a view to that everyone can access legal services in which they have confidence. Not all professional bodies have separation of representation and regulation; not all professional bodies have a shared ethos towards complaint handling and some variations are discernable even from the accessibility of information on process on the website and tone adopted. If the consumer is to play the role envisaged by Clementi in shaping the legal services market then it is important that s/he is able to seek redress and has confidence in the market. There is still an issue to be addressed as to how the consumer judges the quality of services but as a starting point redress where the consumer does know s/he is unsatisfied about service should be improved in terms of accessibility. 95 Summarised in the attached Tables 96 Clementi op cit p99 52

53 The legal services market however broadly or narrowly it is defined is diverse and fragmented. The redress available across legal services is also disparate and fragmented. In order to make redress in such a market effective, the options are either to simply the regulation of the market itself or simplify the redress mechanism available. This presents key strategic issues for the LSB as oversight Regulator. The LSCP has commented 97 that: 1.6. It seems to us that the LSB s first priority should be to set the right strategic direction on a market-wide basis, by identifying the correct balance between consumer and competition policy. Chris Kenny of the LSB commented recently 98 that, Sir David Clementi once talked about a regulatory maze but the Legal Services Act managed to replace it with a three-dimensional labyrinth instead. Given the competition and change that the LSA was designed to produce, the legal services market is unlikely to be simplified in the short term. There are fundamental policy and strategic decisions to be taken by the LSB as to what is to be regulated and how, which will not be answered quickly. Yet Chris Kenny acknowledges in this same article that, I m not sure you can have the position where you can go to one person for advice and have access to the Legal Ombudsman and you go to another person and you don t 99. If simplification of regulation of legal services is a longer term project, what can be done in the short term to help consumers better understand the market and their rights? This is essential for consumers themselves but also for the legal services market itself if it is to evolve as Clementi envisaged. The LSCP has said that some cosmetic changes could help make a difference for the consumer, and may be go towards masking the complexities of what lies beneath. This could include utilising choice tools identified, and simplifying and harmonising redress. This could involve bringing redress services together in terms of jurisdiction, time limits, the conduct/quality of service approach and powers. In the shorter term, it could involve a signposting /triage service along the lines of Complaints Wales. 97 LSCP March 2013 Empowering Consumers op cit Op cit 53

54 Table 1 *Where advice not from authorised person s129 LSA (regulated by an Approved Regulator) Complaints considered against Exhaust internal complaints system First? Time limit for resolution of internal complaint Time limit for complaint Powers Legal Ombudsman Barrister non practising Housing advice * local authority LGO Housing advice* charity eg Shelter Immigration Advisor* OISC Authorised No redress Local authority Shelter Registered persons itself advisors Yes Yes / No 8 weeks 12 weeks 21 days None specified 6 months None specified None specified Secure an Non binding None apology/ Apology/order specified have work change in put decision right/refund/ Compensate/ reduce fees/ reimburse compensate Financial Limits 50,000 Not specified None specified 6 months Can take action against adviser to prevent recurrence. No powers of compensation or refund. n/a Employment* No redress mechanism Legal advice * No redress mechanism DIY Documents* No redress mechanism

55 Table 2 Complaints considered against Type of complaint considered Exhaust internal complaints system First? Time limit to resolve internal complaint Surveyors RICS Ombudsman Services (Property) RICS registered surveyor Conduct and service related complaints Yes RICS process Architects ARB Registered architects Unacceptable professional misconduct or serious professional incompetence 8 weeks None specified Estate Agents- Property Ombudsman Registered estate agent Conduct and service related complaints Accountants ICAEW ICAEW members Unclear certain conduct issues, but no indication they consider service complaints Tax Advisers- TDB CIOT, ATII and IIT members Includes inadequate professional service Financial Advisers And Insurers FSO Wide area of financial matters Difficult to access Debt managers/ Bailiffs eg HCEOA High Court Enforcement Officers members Affected by officer s behaviour Yes Yes Yes Yes Yes Yes Yes 8 weeks 28 days 8 weeks 8 weeks None specified Insolvency Practitioners Eg IPA Registered IPs Work or conduct None specified Mediators Variable 55

56 Time limit for complaint Powers Financial Limits 9 months from first complaint to firm Can fine/ agree restrictions on firm/ refer to Disciplinary Panel Cannot award compensation None specified advise architect re future conduct/ refer to professional conduct committee/ fine up to 5k Cannot award compensation None specified Advise re eradicating failure/ Report breach of Code/ compensate None specified Consent order/ refer complaint to disciplinary/ unpublicised caution 25,000 Cannot award compensation 12 months of event subject to complaint Apology/ fine/ suspend or expel a member/ Can compensate Not specified 6 months of date of firms response Can compensate None specified Instruct future behaviour/ fine/ recommend removal of membership 150,000 Cannot award compensation None specified Warning letter/consent order/ withdraw licence Cannot award compensation 56