The Law Society response

Consumer choice and providing access to good-quality legal advice is essential, and the Law Society welcomes any moves by the OFT that will help us achieve this while at the same time maintaining consumer protection.

The Law Society has for some time been looking at ways to widen the opportunities for solicitors to work in partnership with other professionals, so that the public have the benefit of a one-stop shop when they need it. We have been working on the complex problem of how to maintain the standards of different professionals as well as provide protection for the consumer. The OFT’s recommendation that the restriction on MDPs should be relaxed is therefore very helpful.

On other restrictions, such as advertising and referral fees, the Law Society had already begun a review of these rules, with a view to deregulation, before the OFT began its review. It is worth noting, however, that the OFT report itself recognises that some restrictions are justifiable for the public interest, and the society’s review seeks to undertake that balancing exercise; the current ban on cold calling, for example, may be deregulated in relation to business clients but not for individual consumers.

The OFT also recommended that in some cases there is an argument for reviewing the scope of legal professional privilege. However, any changes would have to be carefully considered. It is a fundamental part of access to justice that communications between lawyer and client are always confidential, but the opposite is often the case for those accountants with a duty to disclose.

Fee guidance was also under review by the OFT. The Law Society has published informative guidance on fees, and it does not believe that they operate to inhibit or distort price competition, as the market in these areas is competitive. The OFT report indicates that it has not included any economic assessment of the impact; if the guidance unintentionally has such an effect, then we will consider it.

Another concern is that the conveyancing market has not opened up, but it is hard to see how this will benefit consumers. The conveyancing market in this country is fiercely competitive and one of the cheapest in Europe. Also, there are concerns that because banks and building societies are primarily interested in selling mortgages and other financial products, there is a danger of conflict if they also provide independent legal advice.

We will consider the OFT’s report carefully and continue to work with the Government on all these issues. n

Michael Napier is president of the Law Society of England and Wales