Unregulated legal services providers
Background
In 2015/16 we undertook a project which sought to address the lack of evidence concerning unregulated legal services providers.
The project had the following objectives:
- Advancing our understanding of the choices and decisions that consumers make when they have a legal problem;
- Analysing the benefits and risks presented by for profit unregulated providers;
- Providing an evidence base that helps to improve our effectiveness in promoting the regulatory objectives; and
- Informing an in-principle decision on whether we should seek to extend consumer protection to any unregulated providers.
Findings
In June 2016 we published the findings from this project. The main outputs were two research reports:
- An in house mapping report. This was primarily based on an analysis of LSB legal needs survey data and provides indicative market shares of for profit unregulated providers.
- In depth qualitative analysis by Economic Insight, which considers the supply side characteristics of unregulated providers in the wills and estate administration, divorce and intellectual property areas.
These reports provide, for the first time, an evidence base on the scale and type of for profit unregulated providers in the market, as well as the benefits and risks that they present to consumers. The full reports are available on the research pages of our website here. The main findings are also set out in our research summary.
Next steps
Our Board decided, on the basis of the evidence generated through this project, that the LSB should not pursue further consideration of extending consumer protection to unregulated providers. A copy of the paper that the Board considered at its April 2016 meeting can be viewed here.
We note the Competition and Markets Authority, in its Legal Services Market Study, has so far not found that consumers are exposed to material risks as a result of a lack of knowledge or understanding of differences between regulated and unregulated providers. However, the CMA is considering measures to improve consumer awareness of the regulated status of providers and the differences in consumer protection. The LSB will give careful consideration to the CMA's proposals as these develop further.
Further information
If you would like to discuss this project further or contribute to the evidence gathering, please contact Regulatory Project Manager Chris Nichols at chris.nichols@legalservicesboard.org.uk.