Transparency and comparison websites

ARTICLE

Transparency andcomparison websites

In 2016, the Competition and Markets Authority (CMA) published its report into Legal Services which recommended a new way for ‘consumers’ to access solicitors by deciding that better information needed to be available for consumers about price and their choice of service provider. They believed this would increase competition and choice and thereby drive prices lower. The SRA responded by introducing its Transparency Rules that from 2018 require all firms to publish information on price, service, redress and regulatory status. Price information must be displayed in respect of conveyancing, probate, motoring offences, employment tribunals (claims for unfair or wrongful dismissal), immigration (excluding asylum), debt recovery (up to £100k) and licensing applications for business premises. Plans to extend into other areas such as family law were postponed.

Under pressure from the CMA, the SRA has treated compliance with the Rules as a priority and inspected firms’ websites. It has now taken regulatory action for non-compliance, fining and rebuking firms and even putting restrictions on firm’s authorisation. The SRA has stepped up its enforcement work and has extended this to working with consumer groups to encourage them to report non-compliance to the SRA. One aspect that is open to criticism is the placement of information. As a responder to the CMA consultation put it: ‘The major challenge is that many firms appear not to be committed to this and seek to hide information in plain sight. Too few lead with this information’. The safest course is to ensure that required information can be accessed from the landing page and not be more than a click away from any sub head pages on the topic. More SRA enforcement is to be expected.

The CMA also wanted the regulators to promote the provision of information on quality and for the information to be available not just to consumers but also to digital comparison tools (DCTs) and other intermediaries. However, the CMA desire for the usage of comparison web sites has not materialised. The SRA has encouraged the development of comparison websites and various comparison websites have been set up but there appears to have been little engagement or evidence of impact on the market.

Having now reviewed the effectiveness of its 2016 report, the CMA concluded that although there had been progress, further work is required to reinforce initiatives to develop DCTs. In February 2021, the SRA took a step further announcing that comparison websites and quality indicators would be a new ‘hot topic’. It set out its plans to work with CILEx Regulation and the Council for Licensed Conveyancers. It will run two pilot schemes, one on conveyancing and the other on employment law. The pilot schemes will last for at least six months and the SRA are seeking firms to work with comparison websites to trial approaches. It aims to increase law firm engagement with customer reviews and comparison websites and increase the number of consumers accessing online information, beginning with using and leaving online reviews.

In readiness, the SRA has provided guidance setting out the business case for firms engaging with online reviews. It encourages solicitors to be ‘authentic’ and to engage positively with bad reviews, setting out suggested responses and reminding solicitors of their regulatory duties not to breach client confidentiality in any such response.

Given the difficulties many firms are facing in the current climate, it is to be hoped that the regulators temper their ambitions with a level of realism as to how much regulatory change the profession can cope with and indeed afford. It is hard not to question the CMA belief that consumer experience will be improved by its tactics to promote through proxies such as testimonials or price indicators – indeed the evidence so far is the opposite. Conveyancing is the most competitive of markets with price bearing little relationship to risk and yet there is evidence to suggest that prices have risen over recent years and the number of firms in that market has reduced rather than increased! ■