By: 16 December 2016
CMA report finds that PI firms are among the worst offenders when it comes to price disclosure

A Competition and Markets Authority (CMA) study into the legal services market has found that specialist personal injury firms and departments provide fewer examples of detailed price disclosure when compared with other commoditised legal services.

The CMA investigated a number of firms in the personal injury sector and found that there is generally a two stage process for service provision.

The first stage is an initial consultation which could be free or paid for. The purpose of the consultation is to assess the client’s case and the likelihood of winning the claim, explain the legal services that can be provided, and discuss the potential level of compensation. There is more limited upfront information about what would be involved if a consumer did decide to pursue his or her claim and while payment was often described as being on a ‘no win, no fee’ basis there was limited explanation of this.

Overall, the study found that competition in legal services for individual consumers and small businesses was not working well because there is not enough information available on price, quality and service.

The CMA has set out a package of measures to improve competition. These have been drawn up after it spoke to the legal sector’s various regulators and will be overseen by the Legal Services Board and include a requirement on law firms to display information on price, service, redress and regulatory status. This would include publishing pricing information for particular services online (only 17% of firms do so at present).

Other measures include revamping and promoting the existing Legal Choices website; information and guidance on how to navigate the market and purchase services; and 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.

Qamar Anwar, managing director of First4Lawyers, said the report echoed its own look into the market and said that that law firms should be no different to other service providers when it came to allowing people to compare price, product and service.

“The legal services market must answer this wake-up call and quickly step up to the challenge,” he said.

“The disruptors are already out there and if firms don’t act quickly, they will be left wondering who has eaten their breakfast as their clients move in droves to other providers who quickly embrace change.”

“In our report, we said that firms wanting to win the race for customer service would need to address the key challenges of: offering a fully-automated online capability; accepting that comparison websites will be the norm; recognising that the client manages the customer journey; seeing that big data will drive everything; and collaboration with others.

“Those firms who don’t accept the challenges will quickly find that they are left behind in the race for clients.”