The confused system of regulation for legal services risks leaving consumers without protection when things go wrong, the new Legal Ombudsman warns today. Against a backdrop of a rapidly changing legal landscape, there are particular difficulties in areas such as claims management and will-writing companies, he says.<\/p>\n
The warning from Chief Legal Ombudsman Adam Sampson comes as he publishes his first Annual Report to Parliament following the launch of the organisation in October 2010. More than 38,000 people contacted the Legal Ombudsman during its first six months in operation, with the organisation launching some 4,000 investigations into the service provided by lawyers, and resolving 1,450 cases.<\/p>\n
For the most part, the quality of legal services being provided is reasonable, the report says. \u201cWe know that most lawyers do a good job for their clients and, when things do go wrong, we generally see a great willingness from the profession to work and to learn with us,\u201d says Sampson. \u201cBut some of the stories we hear are shocking, and all have a heavy impact on the people involved.\u201d<\/p>\n
More problematic is the fact that there are gaps and confusion in what legal services are regulated and what are not, Sampson argues.<\/p>\n
\u201cOne service which crops up a lot is will-writing. It\u2019s a service carried out often by will writing firms who aren\u2019t regulated. Because of this customers are left with little means of redress when things go wrong.<\/p>\n
\u201cWe\u2019ve seen similar confusion about claims management companies, with lots of consumers believing they\u2019re getting a legal service even though most of the work is carried out by a non-authorised person. Again, we can\u2019t help.\u201d<\/p>\n
Consumer organisation, \u2018Which\u2019, supports the need for a more comprehensive protection regime for customers. Which? executive director Richard Lloyd says: “Which? undercover investigations into both will-writing firms and claims management companies have revealed examples of poor practice. As the legal services market continues to grow in both size and complexity, it’s crucial that consumers who have paid for a legal service that’s not up to scratch know where to turn to get help. We want the Government and regulators to wake up to the current lack of clarity and to provide a clear and straightforward route of redress for consumers.”<\/p>\n
\u201cThe arrival of a legal services market in which consumers will, potentially, have complaints about \u2018hybrid\u2019 services poses some serious questions about who they\u2019ll be able to turn to for help.\u201d
\nDes Hudson, Chief Executive of the Law Society for England and Wales says: \u201cThe gap in regulation which allows unregulated cowboys to operate in areas like will writing does not just cause unfair competition to solicitors, who provide a regulated, professional service. It is also damaging to consumers , because the unregulated providers are not insured , do not provide a Compensation Fund , and are not covered by the Legal Ombudsman\u2019s scheme for consumer redress.\u201c<\/p>\n
The report also highlights the need for urgent action to ensure customers aren\u2019t left confused and vulnerable in the rapidly changing legal services<\/a> market. The increased bundling together of legal services with financial services and other products, including more being offered via the internet, poses serious dangers for consumer protection.<\/p>\n Mr Sampson says: \u201cIn many cases it will be the Legal Ombudsman taking the matter on, but sometimes we are aware that we may not be the first point of call for the consumer. In some cases, the issue might go instead to another Ombudsman. In some, Trading Standards. Sometimes, there may be no-one in a position to help There is a huge risk of overlap and confusion here which it is important that the regulators and policy-makers begin to focus on.\u201d<\/p>\n