Martin Partington: Spotlight on the Justice System

Keeping the English Legal System under review

Posts Tagged ‘legal services

Preventing digital exclusion

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A great deal of effort is currently being put into finding ways of using IT to deliver legal services, whether in the form of: providing legal advice and assistance to those who need it;  conducting various types of legal activity/process on-line; dealing with disputes online.

In general, the modernisation of the practice and procedure of the law through IT is to be welcomed. At the same time, there are concerns that some of the most vulnerable in society may be excluded from this brave new world. They may not have easy access to computers, or the ability to use them. In rightly encouraging digital solutions, at the same time policy makers need to ensure that the most vulnerable are not left behind.

In a recent policy paper, the human Rights group JUSTICE has drawn attention to the importance of ensuring that people are not excluded from the rapidly developing digital legal world.

In their report Preventing digital exclusion from online justice (published in June 2018), they analysed the potential issues that those engaged in the reform of legal procedures need to bear in mind.

The report makes a number of recommendations, directed primarily at HM Courts and Tribunals Service. They include:

  • Greater investment in “trusted faces” in “trusted places” i.e. services already providing digital support and internet access.
  • Considering the specific challenges of providing support to the digitally excluded, especially hard to reach cohorts – including testing Assisted Digital services in regions where the internet may be difficult to access. (Assisted Digital envisages a flexible mix of telephone, webchat, face-to-face, and paper-based support services. HMCTS is commissioning a programme of work to evaluate what types of support and in what combinations works best.)
  • Paying specific attention to highly digitally excluded groups, like homeless people and detainees.
  • Designing online justice services with an independent “look and feel” to reflect the constitutional independence of the courts.
  • Maximising the benefits of the “multi-channel” approach – helping people move with ease between digital access, phone assistance, face-to-face assistance, and paper.
  • Ensuring online justice services cater for the most affordable and ubiquitous mode of digital interaction: mobile technology.
  • Conducting end-to-end pilots of online justice services, learning from hearing and enforcement stages what is required at earlier stages.
  • Researching how people behave in an online environment and choices between Assisted Digital channels.
  • Collecting and making available the widest range of data possible to support research by external experts.

Internationally, there is a great deal of experiment going on with different forms of communicating advice and assistance. There are being kept under review by Professor Roger Smith who, with funding from the Legal Education Foundation, provides – among other things – an annual review of development in the use of IT to increase access to justice. He also writes a blog which looks in mor detail at specific initiatives relating to trying to improve access to justice – not just through the use of new technologies but also new ways of funding them such as crowd funding.

For those interested in how the application of new technologies might change ways in which the delivery of legal services are undertaken, this is an outstanding resource – full of links to detailed initiatives. At the same time, the need for realism in potential impacts is also stressed. It is important not always to believe the hype surrounding new applications.

The JUSTICE report is at https://justice.org.uk/new-justice-report-on-preventing-digital-exclusion/.

The Annual Reviews of digital delivery of legal services can be found at https://www.thelegaleducationfoundation.org/digital/digital-report.

Roger Smith’s blog on developments in Law, technology and Access to Justice is at https://law-tech-a2j.org/publications/

Also relevant is the report, published in July 2018, from the Centre for Justice Innovation, which also looks at public attitudes towards the greater use of IT in the justice system.

See http://justiceinnovation.org/portfolio/just-technology-emergent-technologies-justice-system-public-thinks/

 

 

 

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Competition in Legal Services: new report

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The Competition and Market Authority Final Report on legal services was published in December. Its interim report was noted in this blog in July 2016.

The CMA found that competition in legal services for individual and small business consumers is not working as well as it might. In particular, there was a lack of digital comparison tools to make comparisons easier for consumers. Lack of competition meant some providers can charge higher prices when substantially cheaper prices are available for comparable services.

In response to these findings, the CMA set out a package of measures which challenges providers and regulators to help customers better navigate the market and get value for money. These changes were drawn up after discussions with key stakeholders, including the 8 frontline legal regulators, and will be overseen by the Legal Services Board, which will report on progress.

They include:

A requirement on providers to display information on price, service, redress and regulatory status to help potential customers. This would include publishing pricing information for particular services online (only 17% of firms do so at present).

Revamping and promoting the existing Legal Choices website to be a starting point for customers needing help, information and guidance on how to navigate the market and purchase services.

Facilitating the development of comparison sites and other intermediaries to allow customers to compare providers in one place by making data already collected by regulators available. At present only 22% of people compare the services on offer before appointing a lawyer.

Encouraging legal service providers to engage with feedback and review platforms to ensure that customers can benefit from the experience of others before making their choice.

Recommending that the Ministry of Justice looks at whether to extend protection from existing redress schemes to customers using ‘unauthorised’ providers.

In addition, the CMA considered the impact of legal services regulation on competition. The CMA found that whilst the current system is not a major barrier, it may not be sustainable in the long term. In particular, the framework is not sufficiently flexible to apply proportionate risk-based regulation which reflects differences across legal services which could harm competition. The CMA therefore also recommends that the Ministry of Justice reviews the current framework to make it more flexible and targeted at protecting consumers in areas where it is most needed.

The Legal Services Board has welcomed the report and announced that it will publish its response in due course. The Ministry of Justice response is also awaited.

For more detail https://www.gov.uk/government/news/cma-demands-greater-transparency-from-legal-service-providers

Unregulated providers of legal services

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Not all legal services are provided by lawyers or legal executives who are regulated by their professional bodies. There is a group of legal service providers who are not authorised and regulated under any legal sector specific legislation, but who  are providing legal services for profit and as a significant focus of their work.

The Legal Services Board has recently (June 2016) published research on the work of this sector of the legal service market.  The research looked in detail at will-writing, online divorce and intellectual property.

The Key Findings of the research were:

  1. For profit unregulated providers make up a small proportion of the legal services market. In the individual legal needs survey, they represented 4.5-5.5% of cases in which consumers paid for advice or representation.
  2. In contrast, not for profit providers, most of whom will be unregulated, accounted for approximately 37% of all legal problems where advice was sought.
  3. Benefits for consumers include lower prices and greater price transparency compared to regulated providers, innovation and service differentiation, and competitive impact on regulated providers.
  4. The main risks to consumers relate to consumers not making informed choices and misleading advertising claims. The research did not assess the technical quality of work.
  5. Consumer satisfaction with customer service is broadly comparable across regulated and unregulated providers – 84% versus 81% respectively.
  6. More than half of consumers who instruct for profit unregulated providers are aware of their regulatory status. Of those who don’t check, a significant proportion do not do so because they assume that they are regulated.
  7. There is a limited potential market for voluntary regulation beyond existing trade associations given the size of the market and low appetite for such initiatives among providers.

For the time being, at least, the policy conclusions for the Legal Services Board are that

  1. The for profit unregulated sector is smaller than expected, although in some segments these providers have gained a significant market share.
  2. Based on the evidence of benefits and risks to consumers and limited potential market for voluntary regulation beyond existing trade associations, the LSB will monitor developments but will not pursue a voluntary arrangement under the Legal Services Act.
  3. Consumers should be encouraged to check whether or not providers are regulated.

In other words no active intervention for the moment.

Notwithstanding these broad conclusions, the research did look more closely at the work of for profit unregulated providers in three areas: will-writing; divorce; and intellectual property, where not insignificant amounts of legal services work was being undertaken by unregulated providers – around 10% of the work. The dominance in the area of divorce by 5 on-line companies offering very cheap services can be particularly noted.

My guess is that, so long as the unregulated sector provides cost-effective services, with which consumers are satisfied, the lack of regulation will continue. But if there is a highly publicised scandal, then the regulatory context will change.

For the research go to https://research.legalservicesboard.org.uk/wp-content/media/Economic-insight-in-depth-unregulated-research.pdf

Written by lwtmp

July 17, 2016 at 9:53 am

Competition and Market Authority Interim Report

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On 24 January 2016 I noted here that the Competition and Market Authority was going to undertake a new survey of the Legal Services Market to see whether it was working as effectively as it should to deliver innovative, quality and cost-effective services, especially to individuals and small businesses. They promised an interim report on July 2016.

Well, the CMA has been as good as its word and an initial, interim report has just been published. This triggers a further period of consultation with a final report merging early in 2017.

The ‘nuclear option’ for the CMA is what is known as a full-scale investigation into the market under review. This can take a lot of time and be very disruptive for the industries affected. The Legal Services Market so far seems to have avoided this outcome – which I suspect comes as a considerable relief to practitioners and their representative bodies – the Bar and the Law Society.

But it is far from the case that the CMA has given the Legal Services Market a clean bill of health. On the contrary, it is very critical of the ways in which many legal services are delivered, which have failed to keep pace with developments in other service sectors.

The headline findings are:

  1. the Competition and Markets Authority (CMA) has provisionally found that competition in legal services for individual and small business consumers is not working as well as it might. While there have been some positive developments, such as an increased use of fixed fees for more commoditised services, the CMA has found that upfront information on price and quality is often not available to consumers in order to allow them to compare offers and choose the one that most suits their needs.This is because few service providers (17%) publish their prices online.
  2. It is also difficult for providers to signal quality in this sector and there are a lack of digital comparison tools to make comparisons easier for consumers.As a result only a minority of individual consumers (22% according to our survey) compare providers before choosing one.
  3. This may reduce the incentives for providers of legal services to compete. This lack of competition may mean some providers are able to charge higher prices when substantially cheaper prices are available for comparable services.
  4. The CMA has also considered whether legal services regulation has an adverse effect on competition. Its provisional view is that this regulation does not create significant barriers to entry or distort competition between regulated and unregulated providers of legal services.
  5. However, the CMA thinks that the current regulatory regime does impose significant costs on providers that in some cases may be excessive relative to the benefits in consumer protection. While the CMA welcomes the liberalising steps that have already been taken by regulators to address these issues within the current regulatory framework, the CMA is open to more fundamental change of the regime. However, at this stage it believes that there is a risk that such change might lead to increased regulation and might involve significant transitional costs as well as regulatory uncertainty.
  6. It has noted the complexity of the current regulatory framework with its multiplicity of regulators and questions around regulatory independence. In this context, the CMA notes that the government intends to examine the issue of regulatory independence.

The services covered by the market study include areas such as commercial law, employment law, family law, conveyancing, immigration, wills and probate and personal injury and represent an estimated annual turnover of around £11 to £12 billion. In carrying out its market study so far, the CMA has surveyed individual and small business customers, analysed existing data and research and heard from a wide range of interested parties.

What is clear is that pressures on legal service providers to adopt different and more transparent working practices are still very much in evidence and that failure to take heed of these recommendations could ultimately result in more draconian measures being adopted by regulators.

Further detail about the report can be found at https://www.gov.uk/government/news/cma-seeks-views-on-ways-to-help-legal-services-customers

 

 

 

Written by lwtmp

July 12, 2016 at 2:37 pm

The Future of the Legal profession – a view from the Law Society

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I argue in my book that change is the key to understanding what is currently happening to the English legal system, and within that the legal profession.

In January 2016 the Law Society published its own challenge to the legal profession, looking at current trends and how they may have developed by 2020.

The press release accompanying publication of The Future of Legal Services states:

Changes to legal services will have an inevitable impact on the solicitor profession. We have identified the key drivers for change in the current landscape of legal services, and attempted to predict how solicitors’ and lawyers’ interests may change in the future, where they will face competition and what opportunities may present themselves in a changing market.

This report presents findings drawn from a range of sources: a literature review, round table discussions and interviews with a range of practitioners across different practice types, firm visit reports, and the outcomes from a series of three futures panels.

The key drivers of change in the legal services market can be clustered into five groups:

  • global and national economic business environments
  • how clients buy legal services (including in-house lawyer buyers, as well as small and medium-sized businesses and the public)
  • technological and process innovation
  • new entrants and types of competition
  • wider political agendas around funding, regulation and the principles of access to justice

It seems inevitable that solicitors and lawyers face a future of change on a varied scale, depending on area of practice and client types. Business as usual is not an option for many, indeed for any, traditional legal service providers. Innovation in services and service delivery will become a key differentiating factor.

Two particular points stood out to me from an initial reading of what the Law Society has to say:

  1. They clearly take the view that the current model for the small ‘high-street’ practice has little future, particular as current practitioners retire. It is not a sustainable model for the future.
  2. The Law Society notes that 25% of practitioners now work as in-house counsel, so the amount of reliance of the corporate sector on firms of solicitors in private practice would seem to be reducing.

At the same time, the Law Society is convinced that imaginative and innovative lawyers will be able to develop new forms of legal service which will both offer them a living and provide a needed service to the public.

The report reinforces the view that students coming new to the study of law will have a lot to keep up with if they are to understand the professional world they may hope to enter in just 5 – 6 years’ time.

To see the report, go to http://www.lawsociety.org.uk/news/stories/future-of-legal-services/

Written by lwtmp

February 2, 2016 at 6:25 pm

Regulation of the Legal Profession: Competition and Markets Authority gets in on the act

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After the regulatory upheavals which led up to the Legal Services Act 2007 and the creation of the Legal Services Board, lawyers might have been forgiven for thinking that the regulatory playing field might be left untouched for a bit. But no. The Competition and Markets Authority announced in January 2016 that it was going to take a close look at competition in legal services provision by launching what is called a Market Study.

The Press release of the annoucement states:

The Competition and Markets Authority (CMA) will examine long-standing concerns about the affordability of legal services and standards of service. Concerns have also been raised about the complexity of the current regulatory framework.

In light of these concerns, the CMA’s market study plans to examine 3 key issues:

  • whether customers can drive effective competition by making informed purchasing decisions
  • whether customers are adequately protected from potential harm or can obtain satisfactory redress if legal services go wrong
  • how regulation and the regulatory framework impact on competition for the supply of legal services

The announcement also stated: According to recent surveys …  around one in ten users of legal services in England and Wales have said that the overall service and advice provided to them was poor value for money …, [and] amongst small businesses, only 13% said they viewed lawyers as cost-effective and around half agreed that they used legal service providers as a last resort to solve business problems.

The outcomes of a Market Study are very varied, and may range from a finding that all is well and that no further action need be taken, to a full scale investigation into the particular market.

The time line for the present study is that after a very short consultation (ending early Feb 2016) an interim report will be published in July 2016, with a final report at the end of the year.

For further information go to https://www.gov.uk/government/news/legal-services-study-launched-by-cma

This also provides links to some of the reports on which the case for launching the Market Study is based.

Written by lwtmp

January 24, 2016 at 12:00 pm

Increasing competition in the legal services market

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HM Treasury has just published (30 November 2015) a policy paper: A better deal: boosting competition to bring down bills for families and firms.

It notes that 40% of the average persons post-tax income is spent on buying essential services, including
Housing costs including mortgage repayments: £4,880
Energy £1,280
Clothing £1,180
Insurance £875
Telecoms £725
Water £385
Health products and services £325
Legal and Banking £35
Total £9,685

The policy paper sets out its aim of ensuring that there os more competition in all these markets to drive down costs to the indovidual and small business. This is also part of the drive for increased productivity.

Although only a small part of the total, the provision of legal services is not going to be immune from scrutiny. In a Consultation paper, to be published in Spripng 2016, ideas will be set  out on new business models, and independent regulators, for legal services.
The White Paper states:

2.10 According to a recent survey by YouGov, 62 per cent of adults have used a law firm or solicitor at some point in their lifetime and the cost of legal services is now considered the most important factor when searching for a legal representative. The government wants to ensure that innovative businesses are able to enter the market, providing greater choice for consumers. Alternative business models are around 15 percentage points more likely to introduce new legal
services than other types of regulated solicitors’ firms.
2.11 The government will launch a consultation by spring 2016 on removing barriers to entry for alternative business models in legal services, and on making legal service regulators independent from their representative bodies. This will create a fairer, more balanced regulatory regime for England and Wales that encourages competition, making it easier for businesses such as supermarkets and estate agents among others, to offer legal services like conveyancing, probate and litigation.

But that is not all. The policy paper promises other initiatives as well. These include:

Saving motorists money on their insurance policy
2.13 The government is determined to crack down on the fraud and claims culture. Whiplash claims cost the country £2 billion a year, an average of £90 per motor insurance policy, which is out of all proportion to any genuine injury suffered. As set out at the Spending Review and
Autumn Statement 2015, the government intends to introduce measures to end the right to cash compensation for minor whiplash injuries, and will consult on the details in the New Year. This will end the cycle in which responsible motorists pay higher premiums to cover false claims
by others. It will remove over £1 billion from the cost of providing motor insurance, and the government expects the insurance industry to pass an average saving of £40 to £50 per motor insurance policy on to consumers.

These changes are likely to have significant impact on those firms which specialise in providing legal services to the victims of road accidents.

Injecting innovation into the process of home buying
2.18 The government wants to inject innovation into the process of home buying, ensuring it is modernised and provides consumers with different – and potentially quicker, simpler and cheaper – ways to buy and sell a home. Encouraging new business models (for example, online only estate agents) is key to enhancing price competition in the real estate sector, but these have yet to penetrate the market.
2.19 In addition, emerging findings from government research suggest that consumers incur costs of around £270 million each year when their transactions fall through and they have already spent money on legal fees and surveys, and many more sales are subject to costly delays. Similar issues can affect businesses trying to buy or sell commercial property – the UK ranks 45th for registering property in the World Bank’s Doing Business index, and improving performance will help unlock additional economic growth.
2.20 The government wants to consider and address the way the real estate and conveyancing markets have developed around the existing regulatory frameworks, encourage greater innovation in the conveyancing sector and make the legal process more transparent and efficient. The government will therefore publish a call for evidence in the New Year on homebuying, exploring options to deliver better value and make the experience of buying a home more consumer-friendly.

The knock on implications for changes to conveyancing are also likely to impact significantly on law firms and conveyancers.

In addition, the Government has promised a further review of how the regulatory structure created by the Legal Services Act 2007 is operating, with a view to making it more efficient. Although nothing will happen immiediately, the legal profession faces considerable policy change which will require innovative and and imaginative reponses, which professionals need to start thinking about now.

The text of the paper is at https://www.gov.uk/government/publications/a-better-deal-boosting-competition-to-bring-down-bills-for-families-and-firms

Written by lwtmp

December 4, 2015 at 5:16 pm