Redress for “Legal Services” - Legal Ombudsman

Redress for“Legal Services”A Report for the Legal OmbudsmanMay 2013Centre for Legal Management and Regulation, Northumbria Law School,Faculty of Business and Law, University of Northumbria.

ContentsRemit ......................................................................................................................... 3Introduction .............................................................................................................. 4Who, then, is a consumer of “legal services”? ........................................................ 4Consumer perception of what amounts to legal services: ....................................... 7The “Legal Services” Market (s) ........................................................................... 10The Core Authorised Person Legal Services Market ............................................ 10The Alternative Legal Services Market ................................................................. 11The Third Legal Services Market – who else may provide legal advice(even if as an ancillary)? ....................................................................................... 19Consumer Protection - legislative remedies ........................................................ 37The balance of power in the provider/ consumer relationship........................... 39Consumer Empowerment ..................................................................................... 41What choice tools might help empower the consumer? ........................................ 44Potential Impact of the Unempowered Consumer ................................................ 48Where might redress mechanisms do more to empower the consumer? ............. 49Conclusions and Key Questions .......................................................................... 522

IntroductionThe aims of this report, and associated questions to be answered, demonstrate adesire on the part of the Legal Ombudsman to consider redress for legal servicesfrom the perspective of the consumer of these services. This is a natural step inworking towards the Legal Ombudsman’s Vision “that everyone can access legalservices in which they have confidence” 1 . To realise this Vision, the Ombudsmanmust have insight into the experience of legal service provision from a consumerperspective, albeit that it is committed to considering the perspectives of providerand consumer in the resolution of any actual complaint.Who, then, is a consumer of “legal services”?Exploring redress for “legal services” from the perspective of the consumernecessitates an attempt to define the scope of “legal services”, no matter howblurred some of the boundaries required to set parameters may be. What sort ofservices come within the umbrella of “legal services”? That is a question to whichthere is no immediate or obvious answer when posed to legal service providersthemselves, let alone the consumers of those services. It is also problematic forRegulators – the Legal Services Board (LSB) itself will be consulting shortly onwhether “general legal advice” should be a reserved activity, and part of that willinvolve exploring and pinpointing what could be said to constitute “legal advice”.When posed to a consumer of legal services, it is a question which is challengingindeed.The legal services market is complex. The introduction of ABS in October 2011 hasheightened the breadth of business models operating in the sector and, along withother regulatory changes and economic conditions, has acted as a catalyst forchange in the legal services market. This has lead to the need for the LSB andothers to monitor the impact of ABS and other regulatory change on this market.They too must grapple with defining the market to be monitored. Oxera prepared areport in September 2011 for the LSB, seeking to provide a framework to monitor thelegal services sector. Introducing the report, Chris Kenny of the LSB noted that “thelegal services market is hugely complex...” 2 .1 Legal Ombudsman Strategy 2013-16, 20132 Oxera (for the Legal Services Board A Framework to Monitor the Legal Services Sector, September20 20114

In his report 3 on the regulatory framework for legal services, Clementi charted thehistorical difficulty of defining “legal services” and touched on the issue of reservedand non-reserved activities 4 . He did not himself review the distinction, and took theview that the time taken would be prohibitive and that it was for the government todetermine where the regulatory net fell 5 . He did consider that the market could beanalysed in terms of an “inner circle” of reserved legal activities, and an “outer circle”of non reserved legal services more broadly defined (considered below). Thisapproach, however, does not tell the full story. The central problem is that if a personis authorised to carry out an “ inner circle” activity (a reserved activity), other “ outercircle” activities provided by him/her which are not reserved also happen to beregulated by virtue of his/her already “authorised”, inner circle status. Anotherprovider only carrying out an “outer circle” activity would not be so regulated.However, in attempting to chart the legal services market, any definition wouldinclude the “core” authorised person legal services market – ie services where therewould be little argument (from either provider, consumer or regulator) that they fellwithin the definition of “legal services”, for example services provided by a Solicitor,practising Barrister or Chartered Legal Executive. Even within that “core” authorisedperson market there is a divide between reserved and unreserved legal activities.For instance, both Solicitors and consumers may broadly agree that all servicesprovided by a Solicitor are “legal services” but only a minority of services offered willin fact require regulatory authorisation eg be reserved activities. So, a Solicitorrequires to be authorised and regulated to provide probate advice but would notneed to be authorised and regulated to provide employment advice: s/he justhappens to be so regulated by virtue of the fact that s/he is in any event authorisedin relation to reserved activities. Someone else providing employment law adviceneed not be regulated for that activity per se. This distinction may not matter if itwere understood by the consumer, but the reality is that consumers are highly likelyto be blind to this distinction. The Legal Services Institute has argued that thedistinction between reserved and unreserved activities is without rationale and islargely a result of historical political horse trading 6 . Whatever its roots, its impact in2013 is that it continues to fundamentally affect the shape of the legal servicesmarket and its regulation. The impact of the distinction is softened by the practitionerbased approach of frontline regulators. This means that where a practitioner is3 Clementi (2004) Review of the Regulatory Framework for Legal Services in England and Wales4 Reserved activities are listed in Schedule 2 of the Legal Services Act 2007 and include: exercising aright of audience, conducting litigation, reserved instrument activities, probate activities, notarialactivities and administration of oaths5 Op cit p100-1026 Legal Services Institute (2010) Reserved Legal Activities – History and Rationale5

carrying out a reserved activity, they are also regulated for all other activities theycarry out, even if unreserved. This means for example that a practitioner regulatedby the SRA to carry out probate activities would also be regulated by the SRA inrelation to will writing. A provider who was not caught by the regulatory net for areserved activity would not be regulated in relation to will writing 7 .There are tensions between the activity-based approach of the reserved/ unreservedactivity distinction, and the remit of the LSB whose remit, Oxera note, is in practice“practitioner based”. They stated that this limited their report, and set the parametersof the market to be studied, as this means that the LSB is concerned with monitoringall activities (reserved or otherwise) undertaken by reserved or authorised persons.To properly put unreserved activities carried out by reserved persons into some sortof context, Oxera note, would require some acknowledgement and monitoring ofunreserved work carried out by unreserved organisations such as charities, tradeunions, CAB, CLACs. To adopt this approach they say, “it may be necessary to usea much broader definition of legal service suppliers and include non-authorisedpersons.” Focusing on activities of authorised persons without looking at the whole ofthe “legal services” market gives an incomplete picture of a consumer’s experienceof what they may perceive the market to be.This is important, Oxera note, because:“where alternative legal service suppliers to authorised persons are available, thiscan directly affect the consumer’s experience. For example, trade unions mayprovide free advice about employment law; the CAB or CLACs may be able to offerface to face advice more locally than authorised persons; and the quality of advicereceived from alternative legal service suppliers may also affect consumerconfidence in the service provided by authorised persons.”Thus, they note that for such reasons it is important to bear the “alternative legalservice suppliers” in mind, but that it “is unlikely to be practical to collect data on thefull breadth of the legal services supply base.” The legal services market for Oxera,is hard to frame as it is difficult to define and to monitor. They do explore thecomplexity of the more narrow authorised person legal services market and attemptto categorise work types and suppliers to provide a framework enabling the LSB tomonitor and analyse that market going forward. Thus there are complexities evenwithin this core authorised person legal services market in terms of supply sidesegmentation 8 .7 The LSB has recommended that will writing becomes a reserved activity but this recommendationwas rejected by the Ministry of Justice in May 20138 Oxera op cit Table 2.6 p 256

If the core authorised person legal services market is complex, it is itself acategorisation or label which would mean little to most consumers in terms of theirperception of what the legal service market is. Many law graduates have littleconcept of reserved activities and that an “alternative legal service supplier” marketexists. Law graduates are often deflated when asked to focus on what you actuallyneed to be legally qualified to do. Oxera note “the reserved activities are limited inscope compared with what are commonly understood as legal services”. Clementihimself noted that “there are a number of services which would be regarded by mostpeople as legal services which are not reserved and can be provided by anyone whocares to do so 9 ”.To get a sense of the size of this alternative legal supplier market , the Law Society’sMarket Analysis 2012 stated 10 that In England and Wales the legal services marketcomprises between 267,000 and 320,000 regulated and unregulated individualsproviding reserved and unreserved legal services. Solicitors account for 38-46% ofindividuals, 44% of entities and 58% of turnover. However, they note that “the role ofnon-solicitors and non-barristers is significant”, clearly – as they are in the majority ofindividuals.Consumer perception of what amounts to legal services:Most consumers would be oblivious to the distinction between reserved andunreserved legal activities, and that between “core authorised person legal servicesmarket” and the “alternative legal service supplier market”. Both of these labels willcover areas that consumers would most probably consider as “legal advice” ieprimarily concerning legal rights and obligations such as in relation to property,probate, employment law, will writing etc.There will, however, be other advisers who give what the consumer may perceive tobe “legal advice”, ie advice on legal issues, which fall outwith either the coreauthorised person market or the alternative supplier market, in so much as they aresecondary or incidental to a related primary service such as estate agency, financeor insolvency. This could include for example, advice from accountants, architectsand charities on matters which concern legal rights and obligations. A consumer maywell label such advice “legal advice” even where the supplier is not labelled primarilyas a legal services supplier – core authorised person or alternative. Clementi’sdefinition of the “outer circle of legal services” would include both this alternative9 Clementi op cit p9210 Law Society Market Analysis 2012 Summary: Overview and scenarios p2available athttp://www.lawsociety.org.uk/representation/research-trends/market-assessment-2012/7

legal services market where services are perceived as primarily legal, and a “Third”legal services market where legal services provided by others whose primaryfunction may be in relation to a related service (eg. an architect giving advice onplanning law):“advice and assistance in relation to the operation or exercise of legalrights and the performance of legal obligations; and advice andassistance in relation to all forms of resolution of legal disputes 11 ”The key concern for this report arising from lack of consumer awareness about whatdoes and does not amount to “legal services” relates to redress where the provisionof that service goes awry. There are many examples of situations where a consumermay receive what they perceive to be legal advice from a provider not regulated byan Approved Regulator within the supervisory ambit of the LSB – this could be egfrom a supplier in the “alternative legal supplier market” or an adviser such as anarchitect who also advises on planning as part of his/ her service.In policy terms, confusion about redress matters for two principal reasons:What redress is available for services provided, and how does this differfrom redress that would have been available if the party giving “legaladvice” had happened to be an authorised person? Any disparity in redresswould be of concern to those seeking to engender confidence in legalservice provision.Confusion about redress is likely to act as a deterrent to consumer pursuitof redress. If a consumer is confused about the nature of services provided– and in particular, whether they are legal services – they will be unable toeffectively seek redress or complain. Complaints and redress mechanismshave a role to play in securing standards of quality of services. Clementianticipated 12 a legal services market shaped by competition, with theconsumer as an agent to shape the competitive landscape. It is thereforeimportant to consider the extent to which confusion over effective redressinhibits consumer empowerment and has a potential impact on theconsumer’s ability to shape the market as Clementi envisaged.11 Clementi op cit p94-512 Clementi op cit p998

In practical terms, the problem with consumer confusion and perception of what mayamount to legal services arises where:They think a service is a legal service and is regulated, but it is not – theremay be no redress. For example, a consumer may receive housing advicefrom a charity which is not regulated, and is part of the alternative legalsupplier market. His/ her neighbour may receive housing advice from aSolicitor or Chartered Legal Executive, and this service is regulated, as partof the core authorised person legal market.They think a service is regulated – it is, but there is confusion as to bywhom it is regulated. This deters the consumer pursuing redress. Forexample, the consumer receives advice on inheritance planning from anaccountant which s/he perceives as legal advice. S/he is unclear about whoto complain to when it goes wrong, and this deters him/her seeking redress.This paper aims to illustrate situations in which this might arise and consider theextent to which that may result in consumer confusion. Which services attract aredress mechanism and which do not? From whom may redress be sought? Whatsort of redress mechanism is available? What powers are available to the complainthandler? In a market which comprises numerous regulators, the mixture of reservedand non-reserved activities, the separation of service and conduct complaints and soon, it may be difficult for consumers to understand their rights and protections.The first step in that process is therefore to consider some (non-exhaustive)scenarios in which this may occur:What “legal” services/ linked professional services are being offered toconsumers and under what operating models?What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?9

The Alternative Legal Services MarketThis market comprises providers who may be regarded by a consumer as primarilyproviding “legal services” but who need not be authorised (and are not authorised) inrelation to those activities.Barristers - non practisingWhat “legal” services are being offered and under what operating models?A consumer may receive legal advice from an adviser who states that they are a nonpractising barrister. The consumer could perceive this as advice from an authorisedperson who just does not appear in court.Generally speaking (subject to limited exceptions) any barrister who does not hold apractising certificate must not hold himself out as a barrister in connection with theprovision of legal services. A non-practising barrister 13 must notify the Bar StandardsBoard 14 if s/he is providing legal services, which is defined very generally, butbroadly "legal services" includes legal advice representation and drafting or settlingany statement of case witness statement affidavit or other legal document but doesnot include:a) sitting as a judge or arbitrator or acting as a mediator;b) lecturing in or teaching law or writing or editing law books articles orreports;c) examining newspapers, periodicals, books, scripts and otherpublications for libel, breach of copyright, contempt of court and thelike;d) communicating to or in the press or other media;e) exercising the powers of a commissioner for oaths;f) giving advice on legal matters free to a friend or relative or acting asunpaid orhonorary legal adviser to any charitable benevolent or philanthropicinstitution;13 who was called to the Bar before 31 July 200014 https://www.barstandardsboard.org.uk/code-guidance/guidancebarristers-without-practisingcertificates-who-supply-legal-services/11

g) in relation to a barrister who is a non-executive director of a companyor a trustee or governor of a charitable benevolent or philanthropicinstitution or a trustee of any private trust, giving to the other directorstrustees or governors the benefit of his/ her learning and experience onmatters of general legal principle applicable to the affairs of thecompany institution or trust.They must have a minimum insurance against professional negligence claim of£250,000 and must give any potential client a “health warning” detailing their statusand any limits on the services they can provide and make explicit that they are notregulated by the BSB and that, as such, they are not governed by compensatorypowers in relation to inadequate services. A “barrister” can therefore call him/ herselfa barrister in relation to a client or third party provided s/he complies with the healthwarning and notification provisions above. S/he cannot carry out reserved legalactivities.If however, all the work that a non practising barrister does falls outside the definitionof "legal services", someone may hold him/ herself out as a barrister withoutcomplying with the "health warning" provisions described above.Traditionally, consumers have accessed the services of a barrister using a solicitoras an intermediary. There are now businesses and barristers that offer directbarrister access, and it is likely that there will be an increase in consumers accessingthe services of a barrister directly. See for example, Advise Me Barrister and StobartBarristers 15 .In each case, with whom the consumer contracts would depend on the contractualterms and conditions. Does the consumer contract directly with eg Advise MeBarrister? Or does the consumer contract with the barrister directly, with Advise meBarrister acting as an introducer? If the latter, the legal services provided by thebarrister would be regulated by the BSB. If the former, then the legal services wouldbe provided by an unauthorised company, part of the alternative legal servicesmarket.In the case of Advise Me Barrister, for example, while terms and conditions areavailable on their website 16 , it would be difficult for the consumer to interpret them toestablish the boundaries of their contractual relationship with the barrister, and withAdvise Me Barrister. Advise Me Barrister refer to pending approval from the Ministryof Justice and in their terms and condition to being subject to LeO jurisdiction, so itcan be inferred that they are acting as a Claims Management Company but would15 http://www.advisemebarrister.com/home http://www.stobartbarristers.co.uk/personal/how-it-works/16 http://www.advisemebarrister.com/terms-and-conditions12

this be clear to a consumer? The linguistic emphasis on direct access may give adifferent impression, particularly when viewed in conjunction with the terms andconditions.The Legal Services Consumer Panel has pointed out:“At present, the vast majority of clients will find a barrister throughsolicitors, who are better able to unpick the subtle differences interminology. However, as more clients select a barrister directly, often inresponse to advertising, it is even more important that professional titlesare unambiguous in their meaning. 17 “What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?For a non-practising barrister not providing “legal services”, who is not required toprovide a health warning, there is no redress mechanism available to the consumerother than common law remedies. There are examples of prosecutions 18 , where anon practising barrister has failed to give a health warning and has sought to provideimmigration advice, but this is of little comfort to the consumers involved.For a direct access barrister where the consumer actually contracts with the barristerdirectly, or a regulated barrister or a non practising barrister providing “legalservices” who has given a health warning a redress mechanism is available throughLeO. The BSB explain that “Barristers can be employed, self-employed or nonpractising.Barristers who are self-employed work from offices known as 'chambers',the process for making a complaint about a barrister is the same for all types ofbarristers 19 ”17 www.legalservicesconsumerpanel.org.uk/.../2010-05-20_BSB para 1618 http://oisc.homeoffice.gov.uk/latest_information/press_releases/nonpracticing_barrisrer_convicted_of_illegally_providing_immigration_advice/19 https://www.barstandardsboard.org.uk/complaints-and-professional-conduct/concerns-about-abarrister/frequently-asked-questions-complaints/faqs-complaints-about-a-barrister-that-is-not-or-hasnot-acted-for-you/)https://www.barstandardsboard.org.uk/code-guidance/guidancebarristers-without-practisingcertificates-who-supply-legal-services/13

Housing adviceWhat “legal” services are being offered and under what operating models?A consumer may receive housing advice from a charity or local authority. Housingadvice is generally sought by people in need, and vulnerable consumers. Keysources of advice include charities and local authorities. Advice can typically coverarrears including eviction, repossession, rent arrears, emergency housing andlandlords’ responsibilities. Given the recent legal aid cuts (1 April 2013) which willremove this advice from the remit of legal aid, this is an area which is likely toincrease in use. Shelter reported in their most recent Annual Report (for 2011/12)that “more than 50,000 households are in temporary accommodation in England.More than 1.8 million households are on a waiting list for social housing, and morethan 200,000 possession claims have been issued in England alone in the lastyear 20 ”.Operating models therefore include, for example, local authorities which are a keysource of housing advice 21 and charities such as Shelter.What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?In the case of the local authority, the relevant Council complaints procedure wouldapply and a redress mechanism is available under the auspices of the LocalGovernment Ombudsman (LGO) 22 . This mechanism provides that complaints aboutvarious categories of housing advice will be considered where advice has beenprovided by a local authority. An internal complaint must be pursued first and thelocal authority has 12 weeks to resolve it, failing which the Ombudsman caninvestigate a complaint. The Ombudsman has a wide range of outcomes availablesuch as order an apology, ordering a decision to be reconsidered, requiringimproved future procedures, and may reimburse or compensate a party. It does statehowever that it has no legal power to force a body to follow their decision “but bodiesalmost always do 23 .”Shelter give detailed advice on how to complain about housing advice from a localauthority, but give less detail on how to complain about Shelter themselves. Those20 http://england.shelter.org.uk/home21 http://www.stevenage.gov.uk/housing/homelessness-and-housing-advice/housing-advice/ istypical of the sort of provision and advice offered22 http://www.lgo.org.uk/23 http://www.lgo.org.uk/making-a-complaint/possible-outcomes/14

unhappy with service from Shelter are advised by them to give full details of theShelter service complaint. They undertake to acknowledge the complaint within 3working days and to investigate and respond within 21 working days. No details aregiven of how any such complaint may be resolved or determined.There is no standard redress mechanism for charities offering housing advice. Thislack of redress mechanism is also a problem for the consumer who receives advicefrom a charity on other legal matters.There is a clear disparity in redress where someone uses a local authority, or charityhousing adviser, or an adviser giving housing advice who happens to be alreadyregulated as an authorised person.Immigration AdviceWhat “legal” services are being offered and under what operating models?The Immigration and Asylum Act 1999 established the Office of the ImmigrationServices Commissioner (OISC) 24 , which is an independent public body. It is acriminal offence for anyone to give immigration advice or services in the UK unlessthey are either: a regulated solicitor, barrister or chartered legal executive orregulated by the OISC. Their website details numerous instances of successfulprosecution of illegal immigration advice. As a result of the practitioner focus ofreserved activities, even although immigration advice is not reserved, an adviserregulated by another Approved Regulator can also provide immigration advice andneed not register additionally with the OISC. Their website also lists numerousregistered immigration advice providers – both for profit and non-profit. It also has avery small list (4) of prohibited advisers.Immigration advice is not a reserved activity, and may be provided by companiessuch as Immigration Advise Service 25 who claim:“At the Immigration Advice Service we have become one of the mosttrusted immigration lawyers (emphasis added)that people withimmigration issues approach, offering a friendly, professional anddetailed service that does all it can to argue your case to the UKBA andthe courts.”24 http://oisc.homeoffice.gov.uk/complaints_about_immigration_advice/25 http://www.iasservices.org.uk/15

It may be difficult for a consumer to know if an adviser is regulated by the OISC asmany companies have closely associated names. For example, if a consumer was touse a search engine such as Google to look for “Immigration Advice Service”, itwould offer the consumer the webpage www.iasservices.co.uk . This site is headed“Immigration Advisory Service” on the search report. The provider website itselfhowever is headed “Immigration Advice Service”. On a homepage busy with text, itcarries a box with the OISC logo. If the consumer is aware of the meaning of theOISC logo then they may seek to check the OISC register. On checking the list theywill find several companies with similar names. At this point, they will already havecome across two names for the company– Immigration Advisory Service andImmigration Advice Services. On checking the OISC register they will findImmigration Advice Service listed at several addresses and also two entries forImmigration Advisory Services (UK) Limited. As the original website did not contain acompany number, and the OISC register does not list company numbers, how is aconsumer to be sure whether the company they are interested in is registered?The Legal Services Consumer Panel reported 26 that:“ The SRA currently regulates around 1,300 firms which carry out someform of immigration work, while the Office of the Immigration ServicesCommissioner (OISC) regulates 1,930 organisations (3,375advisors)providing immigration advice. ILEX ProfessionalStandards/CILEX currently have 27 immigration advisors on theirimmigration register. The Bar Biennial survey identified 4% of barristerswho indicated that they provide immigration advice and services, withonly 2% stating that it is their main area of practice; “They also identified that it is an area which is problematic in that many consumersare extremely vulnerable and much advice is poor – and good advice makes ademonstrable difference to outcomes. They advised that “asylum seekers were atrisk of “serious detriment” from a complex asylum process and potentially “sloppy”work by immigration advisers”.26 Legal Services Consumer Panel (15 October 2012) Research Note: Immigration and AsylumServices and see also, eg. http://www.legalfutures.co.uk/latest-news/the-legal-lot-asylum-seekercomplex-system-hard-to-find-lawyers-sloppy-advice16

What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?A complaint about immigration advice provided by an authorised person (eg by SRA,BSB and CILEX) would be made to LeO and a redress mechanism is available.The OISC will receive complaints about anyone giving immigration advice and filteraccordingly. If the adviser is regulated by an Approved Regulator, the complaint willbe passed on to that regulator. If the adviser is regulated by OISC, it will investigatethe complaint for regulatory purposes. The OISC can also pursue action such asprosecution against advisers who are not registered and are therefore advisingillegally. They state that the investigation process can take up to 6 months and that ifthe adviser is otherwise regulated they will “probably” refer it on to the otherregulator. The suggestion is therefore that this is not done immediately and theremay be a time lag initially.What redress may be given? The OISC can take action against the adviser toprevent others receiving poor advice or services for example, by raising practicepoints which an adviser is expected to implement. They cannot help with refunds oraward compensation.There is a clear disparity in redress where someone uses an adviser regulated OISCand an adviser giving immigration advice who is already regulated in any event as anauthorised person.Employment adviceWhat “legal” services are being offered and under what operating models?Employment law is not a reserved activity 27 . There are no restrictions on who mayprovide employment law advice and in practice it can come from a number ofsources – a regulated provider such as Solicitor or Barrister or an HR company ortrade union or an insurance company or a claims management company. Anadditional example is where a consumer may be given employment advice by ACAS.What redress mechanisms are available (if any) in these services? What powers areavailable to the complaint handler?27 There are now some restrictions on who can appear in an employment tribunal.The adviser representing a party in the employment tribunal must either be anauthorised person, or someone otherwise authorised by the Ministry of Justice. TheMOJ regulates registered Claims Management Services (Compensation Act 2006s4) and that includes services which amount to employment tribunal representation.;http://etclaims.co.uk/2007/12/unqualified-representatives/17

A complaint about employment advice provided by an authorised person (eg bySRA, BSB and ILEX) would be made to LeO and a redress mechanism is available.If advice (rather than employment tribunal representation) is provided by anunregulated adviser then there is no redress mechanism, aside from common lawremedies (e.g. where a claims management company is used).There is a clear disparity in redress where someone uses an authorised person foremployment law advice, and an adviser giving employment advice who is alreadyregulated in any event as an authorised person.Legal adviceThis covers general legal advice on issues in addition to those dealt with specificallyearlier in this report.What “legal” services are being offered and under what operating models?The LSB as part of its Business Plan 2013/2014 will continue to examine the scopeof regulation and will assess in particular the risks posed to consumers byunreserved legal activities (general legal advice) irrespective of whether or not theseare delivered by an authorised person 28 . The LSB will also be assessing risksassociated with “DIY Law” – this would include for example, the use of onlinedocuments (see below). There are practical and political difficulties in seeking toregulate the provision of general legal advice and the Legal Services Board’s comingconsultation on this should be interesting.What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?At present there is no redress mechanism for consumers in relation to general legaladvice about unreserved legal activities from an otherwise unauthorised person.Such advice from an otherwise regulated person would carry a redress mechanism.There is a clear disparity in redress where someone uses an unregulated legaladviser and an adviser otherwise regulated as an authorised person.DIY Documents28 http://www.legalfutures.co.uk/latest-news/lsb-to-investigate-regulating-all-general-legal-advice.18

What “legal” services are being offered and under what operating models?Several companies now provide online legal documents. For example, AA LegalDocuments, Law on the Web and Rocket Lawyer 29 all enable consumers topurchase legal documents which require the consumer to complete the blanks.There is scope for consumer confusion here as to the nature of what is provided;goods, or legal services? This becomes especially confusing where, for example,consumers with AA legal expenses cover get free access to legal documents andare entitled to a free half hour of legal review. Non-policy holders can also opt for a“Lawyer Managed Document Review Service” who will review and makeamendments to draft documents where required. The terms and conditions used bythe AA in this instance compound this confusion 30 . The LSB will be investigating theconsumer risk posed by online document services (2013/14 Business Plan).What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?It is not entirely clear (below) whether provision of these documents is classed as thesale of goods or provision of a service, but while the provision would attract someredress at common law in either case, there is no redress mechanism for suchprovision – unless the provider happened to be otherwise authorised in any event.The Third Legal Services Market – who else may provide legaladvice (even if as an ancillary)?This market comprises advice from other advisers whose function may not primarilybe as a legal adviser, but who may nevertheless give advice which may beperceived by the consumer as legal advice, in the course of providing anotherservice. This could include advice which impacted or concerned the consumer’slegal rights and obligations.InsurersWhat “legal” services are being offered and under what operating models?This is an active area of the market, particularly in light of legal aid cuts. Manycompanies now offer legal expenses insurance as an add-on to other forms of29 http://www.aalegaldocuments.co.uk/aa/ http://www.lawontheweb.co.uk/Legal_Documentshttps://www.rocketlawyer.co.uk/30 http://www.aalegaldocuments.co.uk/aa/index.cfm?event=base:cpage&c=cpage%5Fterms19

insurance and consumers can also purchase stand alone legal expenses productsand deal directly with a legal expenses insurer such as, for example, MSL Group 31who offer packages for family law and others. The main legal expenses insurer hasbeen DAS 32 . They have just taken their offering a step further by acquiring a law firmand becoming an ABS 33 . This means that the following examples could occur:A consumer buys legal insurance with another item. When something goeswrong the consumer will then receive advice directly from the insurancecompany.A consumer takes legal expenses insurance out directly with an insurersuch as MSL group, and receives legal advice from MSL in the initialstages, before being passed on to a Solicitor if the matter becomes morecomplicated.A consumer takes legal expenses insurance out with a company such asDAS which is an ABS and receives advice from that ABSWhat redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?In the latter scenario of dealing with an ABS, regulation would be provided by anApproved Regulator and redress would be available through LeO.In the other scenarios, LeO would not have jurisdiction and redress for legal advicefrom the insurer themselves would be available via the Financial OmbudsmanService 34 (FOS), which covers claims against an insurance company. The FOSwebsite by its nature focuses on the financial aspects of a complaint against aninsurer; its remit is based on regulated activities. The FOS covers a wide area ofcomplaints, as they say themselves “from pet insurance to stocks and shares”, and itincludes complaints about insurance.It cannot consider certain disputes but these are explained as being complex on theirwebsite and they advise consumers to call them to discuss. There is a link on theirwebsite to the rules governing excluded claims which is currently unavailable. Inshort, it is not easy for a consumer to know whether or not the claim is covered or31 http://www.msl.co.uk/32 http://www.das.co.uk/33 http://www.legalfutures.co.uk/latest-news/das-buys-law-firm-bids-build-major-consumer-brand34 http://www.financial-ombudsman.org.uk/20

even what types of complaints will be considered. The Handbook is accessible via agoogle search but is difficult in itself for consumers to navigate in terms ofsignposting and the number of numerical hyper links 35 .There are also time limits within which a complaint must be made – a complaint mustbe made within 6 months of the date of the firm’s response (and the response mustmention this 6 month time limit) and within 6 years of the date of the event theconsumer is complaining about (or 3 years from the date they knew or should haveknown that they had cause to complain).The FOS’s powers include compensation for losses up to £150,000 (for complaintsmade after 1 January 2012).SurveyorsWhat “legal” services are being offered and under what operating models?Many Chartered Surveyors offer a service restricted to property valuation. However,many Chartered Surveyors also additionally offer advice on matters such as theParty Wall Act 36 , loft conversions and planning. Much of this could easily beclassified by the consumer as legal advice.What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?If a consumer wanted to make a complaint about such advice, the Royal Institute ofChartered Surveyors 37 (RICS) deals with complaints against chartered surveyorswhom it registers. Every regulated firm is required to have a Complaints HandlingPolicy (CHP) and consumers are advised that reference to the CHP may be found inits terms and conditions of engagement. A regulated firm’s CHP will provide for a 2stage resolution:Consideration of complaint by a senior firm member or designatedcomplaints handlerIf the complaint cannot be resolved at step 1, then the complaint should bereferred to an independent redress scheme. There are several independent35 http://www.fshandbook.info/FS/html/FCA/36 See, for example, http://www.peterbarry.co.uk/surveys/37 http://www.rics.org/us/regulation/complaints/21

edress schemes and the firm’s CHP must give details of the redressscheme to which it refers complaints.The RICS itself has very limited powers to investigate:Failure to use a CHPMisuse of clients moneyConflicts of interestFailure to answer correspondenceA conviction of a criminal offenceIf the RICS do investigate a complaint on any of these bases, then they will decideas a preliminary matter whether the information provided by the consumer indicatesthat the member firm may have breached RICS rules and regulations. Their tonediffers from that of, for example, LeO. They stress, for example, that:“Your complaint is important to us as we want to ensure that RICSMembers and Regulated Firms are operating within the Rules andRegulations. At the same time any complaint is a criticism of theirprofessionalism and we must ensure that it is justified.”If they decide that further investigation is required they can request documents fromboth parties. The investigation will be done as quickly as possible, but no time limitsare set. If the investigation team believes a member of firm has breached RICS rulesand regulations (and that they have been able to gather sufficient evidence of thealleged breach) then the RICS will refer the matter for disciplinary action. This actionmay include:Closing the caseNegotiating a consent order with the member or firm – this can agreerestrictions for a period or impose a fine/ make an order re costsReferring to a RICS Disciplinary Panel (usually in public)They cannot:22

Investigate complaints against anyone who is not an RICS memberDetermine whether a member firm has acted negligentlyInterfere with or become involved in court action against a member firmPay compensation or instruct a member firm to do so.The Complaints Handling Procedure 38 provides that the CHP must include a redressmechanism that is approved by the Regulatory Board. RICS maintains a list ofapproved redress providers. One such approved redress provider is OmbudsmanServices 39 who have a list of RICS providers 40 who have nominated their redressscheme. Ombudsman Services will consider complaints against registered membersby individuals. The individual must have exhausted the internal CHP and themember firm has eight weeks to resolve the complaint internally. They will consider acomplaint within nine months of the date of the first complaint to the firm/ company.Complaints might include:An apparent breach of obligationsUnfair treatmentAvoidable delaysFailure to follow proper proceduresRudeness or discourtesyNot explaining mattersPoor or incompetent serviceThis Ombudsman cannot investigate:Complaints they consider to be malicious or unjustified38 Guidance for RICS Firms Version 2 with effect from 01 February 201139 http://www.ombudsman-services.org/memberlists/property/40 http://www.rics.org/uk/regulation/23

Disagreements between the companies that participate in theOmbudsman’s serviceComplaints that are already being dealt with by the courts or othercomplaints proceduresFirms or companies which have not joined their service.The powers available to Ombudsman Services (Property) include ordering anapology or explanation of what has gone wrong, practical action to correct theproblem, recommendations to a firm to avoid similar problems in future, and afinancial award up to £25,000.ArchitectsWhat “legal” services are being offered and under what operating models?Many architects provide advice on the serving of party wall notices and on planningpermission. They may even become involved in the initial stages of a dispute.What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?Chartered Architects – RIBAMost, but not all architects are members of the Royal Institute of British Architects(RIBA). These members are entitled to call themselves Chartered Architects. RIBAdirects a consumer to the Architects Registration Board (ARB) in relation tocomplaints, but also stresses that a Chartered Architect must conduct him/herself inaccordance with both the ARB and RIBA Codes. RIBA therefore has a separate,additional complaints process for a RIBA registered architect – and will considercomplaints against RIBA members for breach of the RIBA Code. RIBA themselvesacknowledge:“Difficulties can arise when insufficient information has been providedand there is an incomplete understanding of the architect's role andresponsibilities in design, planning and construction processes. Incorrect24

assumptions about the architect's role and duties in a project can lead todisputes 41 ”.They have produced a document titled “It’s useful to know...Guidance to helpunderstand the architect’s role in a building project and what happens if things getdifficult” 42 . They encourage architects to be up front and clear with the client abouttheir role. They encourage mediation and adjudication of disputes and set out thesmall claims limit where litigation may be necessary: as a last resort, they caution.Architects - ARBThe ARB is a government established body tasked with regulating architects in theUK. They can consider complaints about a registered architect (it is a criminaloffence to offer services as an architect without being on their register). They cannot:Order the architect to put right something that has gone wrong or awardcompensation for poor serviceBecome involved in disputes about a contract or fee levels, or if thearchitect has been negligent. All of these are matters for the courtMake the architect apologise.The ARB will only therefore consider unacceptable professional conduct or seriousprofessional incompetence. Once information is received from the complainer andthe architect the complaint is considered by an Investigations Panel. This is a 3member panel – 1 architect and 2 lay. The Panel has power to:Dismiss the complaintGive the architect advice about their future conductRefer the complaint to the Professional Conduct Committee (PCC) for a fullhearing. (The PCC can reprimand/ fine/suspend/ remove from register.The Panel try to reach a decision within 12 weeks of receiving it.41http://www.architecture.com/UseAnArchitect/GuidanceAndPublications/PracticalMatters/PracticalMatters.aspx42 October 201025

Estate AgentsWhat “legal” services are being offered and under what operating models?Estate agents may give consumers advice on planning, disputes and even thetechnicalities of the sale process – when does this become “legal advice”? This canbe confusing for the consumer where there are organisations consisting ofconnected services or business. For example, Bridgfords 43 are part of theCountrywide group and offer estate agency services; Countrywide also offerconveyancing services. From a consumer perspective the lines between servicedelivery may not be clear, regardless of any regulatory separation.What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?Unless an estate agent is already regulated as an authorised person (for example bythe SRA) and therefore exempt, it must be registered with an OFT approved 44redress scheme – either the Property Ombudsman 45 or Ombudsmen Services,Property 46 .The Property Ombudsman can consider complaints against a registered estateagent member where the complainant has already submitted a written complaint tothe organisation and 8 weeks have passed from the date of that complaint, withoutthe complaint being resolved.The Property Ombudsman can deal with unfair treatment, inefficiency and unduedelay, breach of law, failure to fulfil obligations under any Code of Practice to whichthey subscribe, where there has been a financial loss to the consumer or avoidableaggravation suffered, distress or inconvenience. In terms of complaints they cannotdeal with, most exclusions are procedural eg where a complaint is being – or hasbeen – dealt with by a court, where the estate agent is not registered with theOmbudsman, where complaint relates to a survey/ valuation / mortgage or a solicitor.43http://www.bridgfords.co.uk/aboutus/http://www.countrywidelegalservices.co.uk/about.phphttp://www.countrywidegroup.co.uk/44 http://www.oft.gov.uk/business-advice/estate-agents/estate-agent-complaints:45 http://www.tpos.co.uk/46 http://www.ombudsman-services.org/property.html26

A case officer undertakes a (generally) paper based review and make arecommendation to the Ombudsman re decision. That may be:To support the complaintNot to support the complaintTo propose a settlement.The Ombudsman will “be influenced by the evidence that he sees and will be guidedby best practice. He will always try to use common sense and arrive at a decisionbased on what seems to him to be fair and reasonable in all the circumstances”The outcome of the case review is firstly sent to the agent, who has 14 days to eitheraccept the decision or make a representation. The agent’s response – and thedecision – are then sent to the consumer who has 28 days to accept the decision ormake their own representation. However, the Ombudsman can only change his/ herdecision in limited circumstances, such as where it can be shown that there was asignificant error in fact that would have had a material effect on the decision, orwhere either party can produce significant new evidence that will have a materialeffect on the decision.What powers does the Property Ombudsman have? It can criticise the agent for anyfailings or breaches of the Code of Practice where it applies. The impact of this isgenerally to require an estate agent to examine his/ her procedures and supervision,so that such failings are reduced or eliminated. However, on occasion, this criticismcan result in the Ombudsman reporting a serious breach of the Code to the TPOCouncil for consideration of their further action against the Agent (which could leadto dismissal from the TPO Scheme).The Property Ombudsman can also make a financial award to compensate theconsumer (paid for by the estate agent). The Ombudsman can make awards up to£25,000. He will do so if he is convinced that the complainer has suffered:Actual, proven financial loss as a direct result of actions or inactions by theagentAnd/or any avoidable aggravation, distress and inconvenience, over andabove what is a stressful and inconvenient process at the best of times27

To illustrate the size of awards the Ombudsman makes, this has been the range ofawards over the last three years 47 :£1-99 (159)£100-499 (645)£500-999 (162)£1,000-2,999 (107)Over £3,000 (31)The Ombudsman may ask the agent to apologise to the consumer. The Ombudsmandoes not publicise decisions, but does publish abridged and anonymised casesummaries on its website and in the Ombudsman's quarterly and annual reports 48 .The other approved redress scheme for complaints against estate agents isOmbudsman Services - Property.AccountantsWhat “legal” services are being offered and under what operating models?There are several different types of accountant and associated regulatory bodies egmanagement accountants who are regulated by the Chartered Institute ofManagement Accountants (CIMA) and chartered certified accountants who areregulated by the Association of Chartered Certified accountants (ACCA). However,chartered accountants regulated by the Institute of Chartered Accountants ofEngland and Wales (ICAEW) or the Institute of Chartered Accountants of Scotland(ICAS) are the most likely type of accountants to provide advice to consumers. Forexample they can offer a range of services where the boundary between financial,accounting and tax consultancy on the one hand, and legal advice on the other,becomes blurred. For example, an individual may use an accountant’s services toobtain financial and estate planning, tax planning advice. There may be a regulatoryoverlap in the case of a chartered accountant who is also an Insolvency Practitionerand/or a Certified Tax Adviser.In December 2012, following previous applications by ICAS and ACCA, the ICAEWapplied to become an Approved Regulator of legal services. It has expressed anintention to license existing accountancy firms to carry out probate services which47 http://www.tpos.co.uk/make_complaint_sales.htm28

are a reserved activity and had indicated that its interest would extend to will writing.This may lead to further confusion from a consumer perspective about which otherservices provided by an accountant can be classified as legal.If an accountancy firm set up a separate ABS probate business, this could alsomean that a consumer receiving probate services from an ICAEW regulated ABS,but with redress available through LeO. Depending on how such a service wasmarketed this could be confusing for the consumer. This is something that will clearlyneed to be taken into account by the LSB when considering the ICAEW ApprovedRegulator application.If an accountancy firm simply provided such services as part of an Multi DisciplinaryPractice, the position is potentially more complicated with the possibility in future ofregulator and Ombudsman shopping, for example, an MDP ABS may be in aposition to choose its Approved Regulator and associated Ombudsman (in theabsence of further regulatory guidance on this from the LSB or agreement betweenApproved Regulators).What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?Each accountancy regulator has its own complaints procedure. Focussing onredress against Chartered accountants in particular, the ICAEW has a complaintsprocedure that provides 49 :Complaint to be made directly to the Chartered Accountant who mustrespond to the complaint within 28 days.Their jurisdiction is not clearly set out, but they do explain that “Although wemay be able to deal with certain issues of professional conduct related tothe dispute (such as obtaining a breakdown of the bill), only the courts canpass judgement on contract terms. “If they can deal with a complaint they will offer conciliation or investigationThe ICAEW state that the investigation “Concentrates on whether we candiscipline the accountant” They estimate the time for a complaint to be investigated as being from 3months to a year, or moreThe ICAEW has no powers to make a member or firm pay compensation.49 http://www.icaew.com/en/about-icaew/what-we-do/act-in-the-public-interest/complaints-process29

Tax AdvisersWhat “legal” services are being offered and under what operating models?Again, tax advisers can provide a consumer with a range of services where theboundary between tax consultancy and advice on the one hand, and legal advice onthe other, becomes blurred. For example, an individual may use a tax adviser’sservices to carry out financial planning which could involve acquisition and disposalof assets, estate planning and tax planning advice.What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?The Chartered Institute of Taxation (CIOT) professes that it is “the leading body inthe UK for taxation professionals dealing with all aspects of taxation. Our primarypurpose is to promote education in taxation.” Its website has a member rather thanconsumer emphasis. The Complaints Procedure is not prominent. It links to thewebsite of the Taxation Disciplinary Board (TDB) 50 . This Board is an independentbody that runs the complaints and disciplinary process for 3 taxation bodies – theCIOT, Association of Taxation technicians (ATT) and Institute of Direct Taxation(IIT).When a complaint is made to the TDB, a completed standard complaint form will beexamined by a Reviewer (officer of the Board). The Reviewer will consider whetherthe complaint falls within the jurisdiction of the TDB, and that the complaint has beensubmitted in time (within twelve months of the events which form the subject matterof the complaint). The Reviewer then investigates the complaint and in most caseswill refer the complaint to an Investigation Committee for further examination. TheTDB caution that it is likely to take three or four months for a complaint to reach theInvestigation Committee. No guidance is given about the jurisdiction or types ofcomplaints that can be considered. The Committee can reach a decision on thebasis of written evidence (no time limit) and there is a right of appeal for both partiesto an Investigatory Assessor (no time limit). S/he can refer it back to a differentCommittee or may uphold the decision of the initial Committee.Alternatively the Committee can decide that a hearing is necessary before aDisciplinary Tribunal which sits in public. The Tribunal has a wide range of powersavailable to it – it can eg require an apology, impose a fine or suspend or expel a50 http://www.tax.org.uk/about_the_ciot/how-to-complainhttp://www.tax-board.org.uk/guidance30

member. The Tribunal also has power to award compensation where it finds thatthere has been Inadequate Professional Service (limits not specified). There is a finalright of appeal against the decision of the Disciplinary Tribunal, but only to themember. No right of appeal is available to the consumer. A member may appeal onthe basis that there has been a serious procedural or other irregularity in theDisciplinary Tribunal, that the finding or sanction was wrong or unreasonable or thatnew evidence has become available which, would materially have affected thefinding of the previous Tribunal.Financial Advisers (and Banks)What “legal” services are being offered and under what operating models?An independent financial adviser may give advice (among others) on investments,home finance activities, and funeral plan contracts. The business models operatingin this area are therefore disparate, ranging from large operators such as BrewinDolphin to niche operators such as Age UK and its appointed representatives onFuneral Care Plans and other age related products, and free, government backedorganisations such as the Money Advice Service 51 . Advice given by each operatorcould touch on issues perceived by the consumer to be “legal advice” such as homeownership, title problems, and probate matters.Consumer perception may become further blurred as organisations such as, forexample, the Co-op Group provides services across several sectors – these areprovided by separate companies, but with a shared brand identity. Co-operativeFuneralCare do state on their website that they are able to provide legal advicethrough Co-operative Legal Services but it is not difficult to see that this distinctionmay be unimportant to the consumer who may be given advice from Funeralcare oneg probate procedure and timescales that stray into legal advice. Someorganisations without the ethos and training capabilities of Co-operative Group maybe less prepared to manage formal and informal separation of activity (even if it isrequired by eg the SRA Code of Conduct).The Financial Conduct Authority (FCA) invites 52 consumers to report unauthorisedfirms and maintains an extensive list of unauthorised firms to avoid. It encouragesconsumers to check the FCA online Register to ensure that a financial adviser isindeed authorised 53 .51 https://www.moneyadviceservice.org.uk/en52 http://www.fca.org.uk/consumers/protect-yourself/report-an-unauthorised-firm53 http://www.fca.org.uk/firms/systems-reporting/register31

What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?The Financial Services Act 2012 abolished the Financial Services Authority (FSA)and introduced a new regulatory framework for financial services. The Act came intoforce on 1 April 2013. It replaced the FSA with other bodies, one of which is theFinancial Conduct Authority (FCA). A financial services adviser can only conductregulated financial service activities 54 in the UK if they are authorised by the FCA todo so.The FCA provides that:Complaints should be made to the firm in writing and the firm shouldrespond to the complaint within 8 weeks.If the firm has not responded within 8 weeks, the complaint is rejected orthe consumer is otherwise unhappy with the response, then they maypursue a complaint with the Financial Ombudsman Service (FOS) seeabove at Insurers.Debt managers – bailiffsWhat “legal” services are being offered and under what operating models?There are restrictions on what belongings a bailiff may take from a property and abailiff could become involved in a discussion with the debtor about the respectiverights of the bailiff and the debtor. This could be perceived by the debtor as legaladvice rather than simply a statement of intent. For example, a bailiff maintains thathe is entitled to remove an item which the debtor regards as an essential item, orwhich the debtor asserts belongs to someone else. The consumer could perceive thebailiff as an agent of the law, and therefore as a legal adviser.The Citizens Advice Bureau has concerns about harassment from bailiffs and claimsthat they have seen a 38% increase in the last 5 years in problems with private54 The regulated activities are detailed in the Financial Services and Markets Act 2000 (RegulatedActivities) Order 2001 which is secondary legislation under the Financial Services and Markets Act2000. Regulated activities include banking; insurance; mortgages; credit cards and store cards; loansand credit; pensions; savings and investments; hire purchase and pawnbroking; money transfer;financial advice; stocks, shares, unit trusts and bonds.32

ailiffs and that “In the last year alone, two and a half times more people havesought online advice about bailiffs” 55 .What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?An individual may want to complain about a bailiff on the basis that they have takengoods that belonged to someone else. There are 3 possible complaint options,depending on whether the bailiff works for a private company (a private bailiff) or is acounty court bailiff or a civilian enforcement officer who works directly for the court.Redress against a private bailiff is very limited – the government advises 56 that youshould simply write to the bailiff’s company and if there is no response, write to theorganisation who instructed the bailiff.If the private bailiff is a member of a trade association, then a consumer can alsoseek redress via that association. Eg the Civil Enforcement Association (CivES) has41 members and provides that once a consumer has written to the bailiff, allowedthem time to respond and remains unsatisfied they can pursue that complaint furtherwith the CivEA. The complaint is assessed on the basis of written documents. If theconsumer is unhappy with the decision then they can seek to appeal it, but CivEAwill determine whether they feel an appeal to an Independent Panel is justified. Thenature of complaint to be considered and powers available are not detailed byCivEA.The High Court Enforcement Officer Association 57 (HCEOA) deals with complaintsagainst a High Court Enforcement Officer. There is some ambiguity on the HCEOAwebsite about the complaints they can consider, for example:“2 You should first make your complaint to the relevant High CourtEnforcement Officer. Most High Court Enforcement Officers' are employed bya company providing enforcement services. You can get details of thecompany address for all High Court Enforcement Officers' from our Secretary(please see point 6).3 You should only make a complaint to us if the case involves a selfemployedHigh Court Enforcement Officers. You can get details of the HighCourt Enforcement Officers' who are self-employed or members of a tradingorganisation from our Secretary.55 http://www.citizensadvice.org.uk/index/campaigns/current_campaigns/bailiffs.htm56 https://www.gov.uk/your-rights-bailiffs/how-to-complain-about-a-bailiff57 http://www.hceoa.org.uk/regulatory-information/want-to-complain.html33

Once the internal complaint has been exhausted, the HCEOA are obliged to tell thecomplainant with reasons within 21 days whether or not the complaint will beinvestigated. They will not consider disagreements about the amount claimed on thewrit, or whether a writ is legal but will consider complaints about the behaviour of thebailiff.This lacks clarity as far as any problem arising from what may be perceived as legaladvice is concerned. Their Complaints Board will consider the complaint and mayhold a hearing if it wishes. If the Board accepts the complaint, its powers are:give instructions about their behaviour, which the High Court EnforcementOfficer must follow in the future;give general instructions about behaviour to the Company the High CourtEnforcement Officer works for;punish the High Court Enforcement Officer;make the High Court Enforcement Officer pay up to £15,000 in penalties; orrecommend to the HCEOA that the membership of the High CourtEnforcement Officer is removed and take the case (and report from theComplaints Board) to the Lord Chancellor. The board will makerecommendations about whether the High Court Enforcement Officershould continue to be a member, or whether they should be an authorisedHigh Court Enforcement Officer.Insolvency PractitionersWhat “legal” services are being offered and under what operating models?Insolvency Practitioners (IPs) are regulated by the Insolvency PractitionersAssociation (IPA) or by an accountancy body, if the provider is an accountant. In theconsumer context, IPs are able to advise on all formal insolvency procedures suchas bankruptcies, sequestrations, individual voluntary arrangements and trust deeds.Consumer facing services such as these are available from a range of insolvencypractitioners 58 . Free individual voluntary arrangements (IVA) help is also availablefrom any registered debt charity, for example, such as Debt Support Trust and DebtAdvice Foundation.Such advice has huge legal implications for the individual and may frequently involveconsidering the position on legal ownership of assets, such as liabilities and rights to58 eg http://www.vardennuttall.co.uk/ http://www.harringtonbrooks.co.uk/34

e asserted in relation to property, and the rights and powers of creditors andwhether bankruptcy or an IVA is preferable. This is advice that has a legal impactand could be perceived by a consumer as legal advice.What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?Several bodies are authorised by the Secretary of State for Business and Skills tolicence and regulate IPs. There are 9 recognised professional bodies under s391 ofthe Insolvency Act 186 who authorise IPs, including the ICAEW, ACCA and the LawSociety. These bodies include the Insolvency Practitioners Association (IPA) 59 . Thebody by whom the IP is licensed will consider any complaint that arises from the IP’sconduct. The IPA states that “in most cases” the IP’s firm will have its own internalcomplaints policy that should be exhausted first, before contacting the IPA. TheIPA’s role in considering a complaint is to determine whether disciplinaryproceedings should be brought against the member. The IPA will take disciplinaryaction against any member where there is evidence of serious breach of requiredstandards. They aim to substantially complete an investigation within 6 months.They have power to issue a warning letter, a consent order, refer the complaint to adisciplinary committee, withdraw a licence. The IPA has no powers to awardcompensation.There are disparities in redressing depending on which recognised professional bodyauthorises the IP in question.MediatorsWhat “legal” services are being offered and under what operating models?Advice could be provided by mediators across a range of areas. One such area isfamily law, selected on the basis that family law is fertile ground for complaints toLeO. Some mediators associations such as National Family Mediation 60 do state thatmediators do not provide legal advice. Nevertheless, they state that a mediator canhelp achieve agreement on financial matters, separation and divorce. The consumermay find it difficult to appreciate that advice is not being given. Some law firmsprovide a mediation service 61 .59 http://www.insolvency-practitioners.org.uk/.60 http://www.nfm.org.uk/61 Eg. http://nicolawilliams.co.uk/InformationPages/ChildrenDisputes.html35

What redress mechanisms are available (if any) in these services? Whatpowers are available to the complaint handler?If a consumer wanted to complain about a mediator then redress depends on whothe mediator was rather than advice given. For example, if a law firm is alsoproviding a mediation service then they will be regulated by the SRA. Whetherredress may be obtained through LeO is not clear as the mediator is neutral betweenthe parties and it would therefore be difficult for Leo to deal with a complaint that wasseen to favour one party over the other.The Family Mediation Association 62 has a Code of Practice and a ComplaintsProcedure which covers its members, which provides that all of its members musthave a written complaints procedure to be given to clients. The mediator’scomplaints process should be exhausted first and then it may be followed up with theAssociation which will implement its own complaints procedure. No further detailsare provided to the consumer via the website.There is a disparity therefore between redress for mediation provided by a mediatorand an otherwise authorised person.62 http://www.thefma.co.uk/about_the_fma36

Consumer Protection - legislative remediesIn addition to these redress mechanisms, a consumer has rights at common lawarising from the contract between the provider and consumer for the provision ofadvice and services. Existing statutory protection for consumers differentiatescontracts for the provision of goods, and contracts for the provision of services. Evenin the latter category, the current law distinguishes between contracts for serviceswhere the service is accompanied by the supply of goods (or where the serviceincludes the manufacture of goods) and “pure” service contracts where only servicesare provided 63 .Most legal services would be “pure” service contracts. In such contracts section 13 ofthe Supply of Goods and Services Act 1982 (SGSA) provides that in a contract forthe provision of a service by a supplier in the course of a business (which wouldinclude a legal services supplier) “…there is an implied term that the supplier willcarry out the service exercising reasonable care and skill”. In such a case, a legalservices provider could be held to have failed to act with reasonable care and skill.This will be the case where the provider has failed to exercise the standard of carethat would have been exercised by a reasonably competent member of the trade orprofession in question ie the Solicitor or CILEX fellow or unqualified paralegal.However, there are many situations in which goods and services are providedtogether. This is, of course, more obvious in the case of eg new parts supplied for acentral heating system but can also occur in a contract for the provision ofprofessional services such as legal advice. For example, it would be possible forlegal advice to be provided along with tangible materials such as legal documents.This is something which may occur more often in future with the unbundling of legalservices and provision of some “DIY” documents and document checking services.In that case, legislative protection depends on what can be said to be the substanceof the contract – the services or the goods? If the service is the substance, and thegoods are incidental, then the contract would be governed by the SGSA. If goods arethe substance of the contract then the Sale of Goods Act 1979 (SGA) would governthe contract and the SGA would imply terms regarding description, quality andfitness for purpose. SGSA would still apply to the service element of the contract.What of the situation where tangible goods such as documents are provided on astand-alone basis eg this is an option with AA Legal Documents? The provision ofdocuments would be classed as a sale of goods. Where for example, there was adefect in the documents, SGA would provide implied terms about quality and fitnessfor purpose which are judged by outcome based standards ie the question is notabout reasonable care and skill as with SGSA, but whether the “goods” meet their63 SIS Consolidation and Simplification of UK Consumer Law November 2010, p437

description, whether they are of satisfactory quality or whether they are reasonably fitfor a particular purpose.The position becomes even more complex where the service provided actuallycaused the defect in the goods ie incompetent drafting creates a legally flaweddocument. In such a situation, the current law is unclear as to when and how the lawmay impose an outcome based standard 64 .As the basis of establishing liability under the SGSA and SGA differs, the remedyavailable to consumers may also differ. For pure service contracts, remedies are amatter of general contract law. Depending on the status of the term the appropriateremedy would be damages for a more minor breach and a rescission (an unwinding)of the contract for a more major breach. The fact that remedies are not set out instatute makes remedies for a poor quality of service, at common law, inaccessible tothe consumer. The remedies available to consumers are a mixture of common lawand statutory remedies. This leads to confusion to consumers about exactly whattheir remedies are. For example, the right to reject goods if they are not ofsatisfactory quality is a common law right. Additional consumer remedies e.g. theright to replacement goods or to rescind the contract are statutory remedies. It iswell recognised that the remedies are confusing and in fact lead some consumers tobelieve they actually have better remedies than those the law actually provides.The Department of Business, Innovation and Skills (BIS) have recommended thatthe remedies for both pure service contracts and mixed contracts be put on astatutory footing “to a much greater extent 65 ” and suggest that the law in relation toservices should be comprehensively codified. They acknowledge “it would be asignificant undertaking and it would require confronting and resolving somecontroversial issues. But in terms of clarity and accessibility, this is the best solution”.It may be that this is dealt with in the forthcoming Consumer Rights Bill.The Unfair Terms in Consumer Contract Regulations 1999 could also apply to acontract for the provision of legal goods or services and would allow consumers tochallenge standard terms in a contract which they consider unfair. The Regulationshave for example been used to challenge standard terms in a Chartered Architect’scontract 66 . The OFT has powers under these Regulations to investigate a claimmade by a consumer about such a term and to take action against the supplier.There is likely to be a lack of awareness among consumers about such legislativetools, as they are not signposted to the consumer as part of the contracting process.64 Op cit p5365 Op cit p8966 Munkenbeck & Marshall v Harold [2005] EWHC 356 (TCC)38

These 1999 Regulations are also expected to be reconsidered in the ConsumerRights Bill.The balance of power in the provider/ consumerrelationshipThe Legal Services Act 2007 sought to liberalise the legal services market andincrease competition among different types of provider. This liberalisation of the legalservices market is predicated on the basis that increased supplier competition willraise standards and improve access to justice for the consumer. This was in linewith the then current, general governmental approach to consumer policy typified bythe 2004 consultation by the DTI “ Extending Competitive MARKETS: EmpoweredConsumers, Successful Business “ which stated 67 :“Competition is driven by empowered consumers, who can make informed choices,and who are prepared to assert their rights and to complain about poor quality goodsand services. If consumers cannot choose effectively between different products orservices, then they are not putting any pressure on the poorest traders to improve.And if people simply put up with poor quality services, then those traders whoprovide good quality services do not receive any more customers than those who aresubstandard.”Thus the emphasis was on the consumer to make informed choices, based onquality. Several commentators 68 have noted that in the context of legal services, it isdifficult for consumers to judge the quality of service delivered. Recent research forthe LSB 69 explored the division of risk and responsibility between consumers andproviders in the legal services market, as part of the LSB’s wider research into whatis considered an acceptable level of risk for consumers of legal services. They foundthat there was little knowledge of existing protections (ie for the core authorised legalservices market) and that there was limited ability to differentiate between differenttypes of legal service provider such as solicitors, licensed conveyancers and willwriters. For example they found that “there was little knowledge about unlicensed will67 2.16 cited by in Howells, G “The Potential and Limits of Consumer Empowerment by Information”Journal of Law and Society 2005 Vol 32 349, at 35068 Roy, A (March 2011) Legal Services Board: Understanding the economic rationale for regulation –a collection of essays; bdrc continental (2012) Legal services Benchmarking Report 1151669 Vanilla Research: Risk and the role of regulation, January 201339

writers, with some participants thinking they were just solicitors who specialised inwills. 70 ”If the consumer finds it hard to judge quality and make effective choices on thatbasis, this is compounded by confusion about the status of legal service providers.For example, consumers find it difficult to differentiate between solicitors andbarristers, regulated and unregulated providers. A recent Report 71 for the Office ofFair Trading (OFT) alleges continuing confusion for consumer.Thus, there are currently limitations on the consumer of legal services acting as aforce to determine the shape of the legal services market. The Legal ServicesConsumer Panel (LSCP) has warned very recently, “Don’t leave consumers in thedark yet expect them to vote with their feet”. The LSCP found 72 , inter alia, that only30% of people think lawyers are well regulated, only 22% of consumers shop aroundfor legal services and 42% of people do nothing when dissatisfied with the servicethey receive and only 1% of consumers use comparison websites to find lawyers andjust 4% refer to an accreditation scheme:“3.15 The evidence suggests there are low levels of shopping aroundand many consumers who do search find it difficult to make comparisons– although this data has improved slightly over time. The absence ofcredible choice tools inhibits comparisons. Referrals by commercialintermediaries are widespread, but this tends to produce lower servicesatisfaction ratings than other selection methods. 73 “Given the importance afforded the consumer in shaping the legal services market,and the focus across government policy generally on the empowered consumer,there have been several studies on this carried out, some of which are pulledtogether and analysed by the LSCP. They cite, for example, research 74 that found70 Op cit, p1271 Europe Economics, Economic Research into Regulatory Restrictions in the Legal Profession –report for the Office of Fair Trading, 201372 LSCP Report – Phase 1 – Empowering Consumers LSCP January2013 Empowering Consumers –Background Paper 1: Possibilities and Limitations73 Op cit74 BERR (now BIS), Benchmarking the performance of the UK framework supporting consumerempowerment through comparison against relevant international comparator countries, University ofEast Anglia, 2009 cited in LSCP op city at p740

that in terms of legal framework and consumer interface (this included informationand consumer advocacy), the UK was on a par with the best, but that furtherprogress was needed on redress mechanisms 75 .Consumer EmpowermentPutting the consumer at the heart of shaping the market relies on notions of“consumer sovereignty” that is that the consumer demand will determine prices andthat “effective consumer demand will govern ‘all economic phenomena’ and optimallysatisfy itself” 76 . Gonse himself lists a critique of what could be seen as a theoreticalargument, and notes that other factors will also shape the market – such as theefforts of the producer in selling, income distribution among consumers, massproduction of standardised products and real costs 77 . This is also noted by Oxera inthe context of legal services. Oxera note that the legal services market comprises aset of diverse markets and in some there are factors which indicate likelihood ofmarket failure. For example, Oxera note 78 that various factors can contribute to thefailure of a market such as the legal services market – such as asymmetricinformation (which can mean that the consumer is less well informed about theservice than the provider and is less able to judge the quality of the service provided), asymmetry of market power where, for example, there is a geographic or sectorbased supplier shortage, and consumer switching and search costs that meanchoosing or switching supplier is not easy. Nevertheless, consumer choice will be akey factor in shaping the market and there are limitations on the extent to which thisis currently happening due to lack of empowerment of the consumer. On a practicallevel, the LSCP note that where information a consumer needs to use their buyingpower is spread over various websites, this means that the consumer is not shapingthe legal services market in the way that was hoped.The emerging knowledge economy and in particular the availability of information(mainly but not wholly through the internet) has impacted on the role of the consumerin shaping the market, and on the nature of consumer empowerment. Newholm,Laing and Hogg have carried out research examining the nature and dynamics ofconsumer empowerment in the context of this emergent knowledge society. They75 Op cit p1776 Gonse (1990), cited in Newholm, Laing and Hogg “Assumed Empowerment: consumingprofessional services in the knowledge economy” European Journal of Marketing 2006 Vol 40 994, at99677 Op cit 99678 Oxera op cit 1.3.241

focus in particular on this in the context of professional advice, conducting researchamong providers and consumers of medical, financial and legal services.Specifically, they sought to explore the impact on the consumer/ professionalexchange as a result of the consumer using information available by, eg. theinternet, whether that be the patient printing off information from NHS Direct, or awould be divorcee with information from the internet.They argue that while the debate about consumer empowerment in a professionalcontext has a “long pedigree 79 ”, the use of the knowledge economy has altered thedebate, but caution that the approach of consumers should not been seen asuniform: the attitude and impact of the consumer as a market force will be shaped bytheir capacity to use information available, and their willingness to use thatinformation to alter the balance of the consumer/ professional relationship.They found that the majority of professionals were sceptical about the idea ofconsumer empowerment, and across all 3 sectors there were concerns from theprofessionals that consumers would not effectively use knowledge available becauseof barriers to empowerment such as:Lack of understandingLack of interestApathyExcessive emotionLack of objectivityLack of context of the “bigger picture”Lack of technical skillsThe consumers in the research “ generally typified their relationship withprofessionals as a struggle to have their credibility in the field accepted. “ A keyfactor in this was the language used by professionals as a barrier to empowerment.In terms of the way in which the consumers wanted to use knowledge to alter thebalance of the relationship, they were found not to be seeking empowerment to theextent of parity or dominance but rather to achieve a dialogue. A small number ofprofessionals saw this as a way to use empowerment to enhance the professional79 Newholm et al op cit 100242

ole and service delivered, by achieving more of a two way discussion 80 .They alsofound that knowledge was used in different ways across the 3 sectors studied, forexample a consumer of legal services might check information beforehand but wouldstill seek professional advice, whereas in relation to financial services or a smallmedical problem that might differ, and online information could supplant professionaladvice.They identified that to use knowledge as empowerment required:interest + expertise + cultural capitalThey define cultural capital as “an expectation of empowerment”. Thus facts are notenough – changing values and attitudes to challenging professionals are also key.Some in the study had used knowledge to switch provider, while others had used itto change professional behaviour and service, effectively to alter the professionalconversation. Redress mechanisms and common law protections have a role to playin helping the parties alter that professional conversation. These elements areinterconnected, and in practical terms this means:Interest –recent research for the OFT 81 illustrates that a key barrier to complaining(for those dissatisfied with the service received) was that respondents did not thinkcomplaining was worthwhile given the amount of the respondent’s time the processwould require, and that they did not know they could complain. Consumers need toknow as a minimum that they can complain and that a redress mechanism isavailable.Expertise – another key barrier was concern that the process was not worthwhilegiven the amount of the respondents’ time it would take, and potential costs.Empowered consumers need to know how to complain and to understand theprocess, and have a redress mechanism there to facilitate complaints rather than actas a barrier to them.Cultural Capital – Consumers need to know that it is acceptable to complain. As astarting point this will be encouraged by knowledge that others complain, that thecomplaints process is there to ensure confidence in a body of advisers and thatredress is available. This requires provision of information, to begin to changeattitudes to professionals.80 Op cit 100381 Europe Economics op cit43

Vanilla Research for the LSB found minimal knowledge of existing legal protections,even among those who had experience of using legal services (some of whom hadsubstantial experience). They identified the central issue as being the difficulty of theconsumer knowing when to complain and being able to judge the quality of the legalservices they have received. They found that consumers feel vulnerable in the legalmarket and have much less confidence than when dealing with problems such as egfaulty white goods where problems are tangible. They cite 82 one participant whoillustrates the extent of the gulf to be addressed in empowering some consumers inrelation to a legal adviser:“ How would you whether they were incompetent? I don’t know where thelaw goes or where the law stops or how they begin or what to do, so ifthey do something, how do you know if they have messed up? What theytell me, for me is gospel. I don’t know any different”What choice tools might help empower the consumer?As the champion of the consumer of legal services, the LSCP echo the elements ofconsumer empowerment (above) and emphasise the role of the regulatoryframework in facilitating empowerment:“Consumer empowerment involves two broad elements which interact tocreate the conditions for consumers to thrive. Firstly, the resourcesconsumers have at their disposal to make better choices. This includes acertain state of mind (confidence and willingness to play an active role),decision-making tools such as good information, and the skills to usethese tools to make effective decisions that secure positive outcomes.Secondly, the institutions – for example, the competition regime,consumer protections and regulatory organisations – that supportconsumers to shape markets. 83 “This broadly reflects the interest + expertise + cultural capital argument of Newholmand others (op cit). In practical terms, they also identify some impediments toempowerment as being:82 Vanilla Research op cit p1083 LSCP March 2013 – Empowering Consumers op cit44

“Even within the professional services sector, consumers say they find itespecially difficult to compare the quality and price of legal services. Wehave examined a range of data relating to public confidence and theconsumer journey in legal services. This reveals problems of low trust inproviders and little faith in regulators, knowledge gaps about consumerrights and of what lawyers do, inaction in response to some serious legalissues, lack of shopping around and minimal use of choice tools,communication breakdown while cases are progressing, and someserious barriers to complaining. “Across consumer policy generally, Howells infers a preference for informationalprotection rather than intervention. This is the preferred approach of the LSB forwhom intervention must be justified by associated consumer risk. Howells thereforeexplores their potential and limitations as consumer protection tools:InformationInformation is an integral element of the interest and expertise required to empowerthe consumer 84 . A consumer information strategy can include information providedby the services provider and negative information held on providers. Informationalone however, is not enough. Howells identifies limitations, such as:Lack of time – do not assume all information will be readIs it a middle class tool? He states: “ those who take advantage ofinformation are likely to be the more affluent, well educated, middle classconsumers 85 “It may be that different types of consumers need different types ofinformation? What sort of information do low income or vulnerableconsumers need?Lack of alternatives – what use is the information if you have no alternative.There may for example, be areas of the country where a consumer haslimited geographic choice of provider, or providers in certain sectorsbecome scarce.Market impediments to switching84 Along with cultural capital85 Howells op cit 35745

Behavioural economics suggests that the focus on the average consumer, who actsrationally and is “observant and circumspect” is a mistake. Many consumers,Howells argues:Have limited ability to understand and process informationCan interpret information in a self serving wayCan be over optimistic about avoiding risk, and do not always accordinformation its proper significanceare affected by the presentation of information and this can impact their useof informationare affected by the way marketing influences use of informationWhat does this mean in practice for the consumer?A nuanced approach to information is neededToo high expectations should not be placed on informationThe ideal content of information should be carefully consideredInformation should be made most accessible and brought to theconsumer’s attentionInformation must be effectively targetedInformation alone therefore is not enough – at very least it has to be tailored to theconsumer. It could be argued that regulatory requirements on information provisionare not always done with the intent of informing the consumer, but of avoidinglitigation and can be self defeating. This could be said to be true of client care lettersunder the pre-2011 SRA Code of Conduct, but the 2011 SRA Code of Conductrequires them to be drafted in such a way as to be clearly understood by thatparticular client 86 .86 SRA Code of Conduct 2011 Chapter 146

Risk AllocationVanilla’s research for the LSB looked at how much of the risk in a transaction theconsumer was prepared to accept. It indicates that consumers do not want extremeempowerment which would equate to self service, and are uncomfortable withassessing risk themselves. Those sceptical about the power of information cautionthat in providing more information, it can be done in such a way as to present theconsumer with narrow, set choices within the “producers’ ‘regime of truth 87 ’”. There isa balance therefore between making information available to help empower theconsumer and helping equip the consumer to use it, and prescribing and narrowingchoices.Comparison websitesConsumers find it difficult to judge the quality of service received. In a Tripadvisorequivalent for legal services, it would be difficult for consumers to rate theirexperience. It has been argued that in order for comparison sites to work, someobjective data is required. There may, for example, be scope for regulators to useaccess to their data as a lever to improve the credibility of comparison websites, forexample by restricting access to those sites meeting specified licence conditions 88 .However, the OFT has warned about the risks of this approach creating marketconcentration, promoting inferior choice tools which become the default option forconsumers and limiting providers ‟ability to innovate and respond swiftly toconsumers needs”.Accreditation schemes or badgingThe LSB has previously accepted a recommendation from the LSCP to explore theviability of a single regulatory badge that would help consumers to identify moreeasily all authorised persons. This followed research which suggested consumersfalsely assume that all providers of legal services are regulated, and so they do notunderstand the implications of choosing between regulated and unregulated firms.There has been no public progress on this 89 .Culture and signposting87 Howells op cit 100888 LSCP March 2013 – Empowering Consumers op cit at 4.26 and LSCP (February 2012)Comparison Websites89 Op cit at 4.2747

While there may be deeper cultural issues to be addressed, doing so will be a longerterm project and this does not mean that simpler steps cannot be taken in themeantime to assist the consumer. Vanilla found that over and above cultural issues,there was also a lack of awareness of protections and redress available that couldbe improved with greater signposting and communication by providers. Previousresearch for LeO 90 found that there was low awareness of the complaints process.The impact of this was that a consumer will only complain where they are aware thatthey have a right to complain, they understand how to make it, they know who tocomplain to and when they should make it. Many of the redress mechanisms in thisreport fall short of facilitating complaints in this way.Potential Impact of the Unempowered ConsumerIt is useful to note the potential impact of an unempowered consumer in shaping thefuture market. The Law Society has recently carried out detailed analysis of the legalservices sector 91 . They set out 4 possible models of the future – legal services in2025. These range from:The Law is an APP, where there is high growth and high demand for legalservices and only the fastest adapting suppliers survive. The consumer isincreasingly powerful, but uses internet to explore self help, has little loyaltyto providers and is “emboldened by the availability of tailored informationthat minimises the information asymmetry between buyers and legalservice providers”. This is a utopia for the consumer, who also has highexpectations of delivery and outcomes. The consumer plays an active rolein shaping services. What enabled the consumer to do this? Tailoredinformation, internet access, high wages, wider use of the general termslawyer and a concern that a service is regulated effectively rather thanabout the job title ascribed to the provider.The other 2025 scenarios move away from the consumer utopia and look at eg:Wise Counsel model - a market predicated on the consumers need to havean expert sort everything out for them/ remove the burden of playing a partin that resolution themselves. This arises because high demands on family90 You Gov June 2011 First Tier Complaints Handling91 The Law Society Market Assessment 2012 accessible athttp://www.lawsociety.org.uk/representation/research-trends/market-assessment-2012/48

time and pressured economic conditions, and the fact that buyers areoverwhelmed with too much, irrelevant information means that theconsumer’s power to shape the market is limited. Consumers “ continue torely on job titles as a proxy for quality”.Their third scenario Mini Clubmen is a more nationalistic, inward lookingversion of Wise Counsel which blunts demand, with consumers remaining“recipients”: passive, with information asymmetry a continuing problem.The final scenario – Bleak House – paints a bleak picture for providers buta less bleak picture for consumers. Consumers are again empowered bythe availability of tailored information and shop around, negotiating on priceand having high expectations. This is bleaker for the consumer only in asmuch that the suppliers have not raised their game in response to suchpush from the consumer and this ultimately leads to diminishing choice forthe consumer as the supply side of the market stratifies with specialistniche practices and high volume low profit operators.Where might redress mechanisms do more to empower theconsumer?Complaints are a key way for consumers to express dissatisfaction and seekrecompense and censure for a provider. Aside from simply shopping with their feet,pursuing a complaint can achieve longer lasting impact on service provision in future.Redress mechanisms have a key role to play in empowering the consumer andensuring confidence in service provision. The LSCP Chair noted in the context of theNHS 92 that in launching a review to ensure that the NHS listened to, and acted upon,patient concerns, that the Health Secretary had stated:“complaints can be the earliest symptom of a problem in an organisation,and the NHS should use them to learn from and improve their service”At the moment, the LSCP claims that:“The evidence suggests only half of people are confident complaining toa lawyer and many dissatisfied consumers do not complain or give up92 Blog 21March 201349

efore their complaint is satisfactorily resolved. People are confusedabout what to do, get overwhelmed by legal jargon, believe they won’tget a fair hearing and fear that upsetting their lawyer could haverepercussions for their case. Signposting rules that would help alertconsumers to their right to complain are not working effectively. 93 ”More specifically:42% of people do nothing when dissatisfied with the service they receive23% of consumers decide not to complain to their lawyer because they haveno confidence their complaint would be resolved fairly70% of consumers who are dissatisfied with how their lawyer handled theircomplaint abandon their complaint at this stageOnly 35% of complainants to the Legal Ombudsman recall being informedabout the organisation by their providerAs long as there is some redress should it matter how it is found, whether from theProperty Ombudsman, the ARB, the FCA or LeO? If it is the case that there arecultural barriers to complaining even where the relevant redress mechanism isclearly signposted, this is compounded by any confusion arising about who tocomplain to, and how. If such confusion is a further barrier to effective redress, thenthe answer must be, yes. This accords with further research for the OFT whichfound:“The potential for consumer confusion on where to lodge a complainthas been reduced with the creation of the Legal Ombudsman but has byno means been eliminated. A recent YouGov consumer survey suggeststhat there are around three million users of legal services annually in theUK, of whom 15 per cent indicated they were dissatisfied with legalservices on the last occasion they used them. The survey also suggestedthat only about 13 per cent of dissatisfied users went on to make acomplaint. Evidence from other recent surveys suggests that confusion93 LSCP March 2013 – Empowering Consumers op cit at 3.1950

The legal services market – however broadly or narrowly it is defined – is diverseand fragmented. The redress available across “legal services” is also disparate andfragmented. In order to make redress in such a market effective, the options areeither to simply the regulation of the market itself or simplify the redress mechanismavailable. This presents key strategic issues for the LSB as oversight Regulator.The LSCP has commented 97 that:“1.6. It seems to us that the LSB‟s first priority should be to set the rightstrategic direction on a market-wide basis, by identifying the correctbalance between consumer and competition policy.”Chris Kenny of the LSB commented recently 98 that, “Sir David Clementi once talkedabout a ‘regulatory maze’ but the Legal Services Act managed to replace it with athree-dimensional labyrinth instead”. Given the competition and change that the LSAwas designed to produce, the legal services market is unlikely to be simplified in theshort term. There are fundamental policy and strategic decisions to be taken by theLSB as to what is to be regulated and how, which will not be answered quickly. YetChris Kenny acknowledges in this same article that, “I’m not sure you can have theposition where you can go to one person for advice and have access to the LegalOmbudsman and you go to another person and you don’t 99 .”If simplification of regulation of legal services is a longer term project, what can bedone in the short term to help consumers better understand the market and theirrights? This is essential for consumers themselves but also for the legal servicesmarket itself if it is to evolve as Clementi envisaged. The LSCP has said that some“cosmetic” changes could help make a difference for the consumer, and may be gotowards masking the complexities of what lies beneath. This could include utilisingchoice tools identified, and simplifying and harmonising redress. This could involvebringing redress services together in terms of jurisdiction, time limits, theconduct/quality of service approach and powers. In the shorter term, it could involvea signposting /triage service along the lines of Complaints Wales.97 LSCP March 2013 – Empowering Consumers op cit98 http://www.legalfutures.co.uk/latest-news/bringing-legal-advice-regulatory-net-may-resolveconsumer-confusion-says-lsb-chief99 Op cit53

Table 1*Where advice notfrom authorisedperson s129 LSA(regulated by anApproved Regulator)Complaints consideredagainstExhaust internalcomplaints systemFirst?Time limit forresolution of internalcomplaintTime limit forcomplaintPowersLegalOmbudsmanBarrister –nonpractisingHousingadvice *localauthorityLGOHousingadvice*charity egShelterImmigrationAdvisor*OISCAuthorised No redress Local authority Shelter Registeredpersonsitself advisorsYes Yes / No8 weeks 12 weeks 21 days None specified6 months None specified NonespecifiedSecure anNon binding Noneapology/Apology/order specifiedhave workchange inputdecisionright/refund/Compensate/reduce fees/reimbursecompensateFinancial Limits £50,000 Not specified Nonespecified6 monthsCan takeaction againstadviser topreventrecurrence. Nopowers ofcompensationor refund.n/aEmployment*No redressmechanismLegaladvice *No redressmechanismDIYDocuments*No redressmechanism

Table 2ComplaintsconsideredagainstType ofcomplaintconsideredExhaustinternalcomplaintssystemFirst?Time limitto resolveinternalcomplaintSurveyorsRICS –OmbudsmanServices(Property)RICSregisteredsurveyorConduct andservicerelatedcomplaintsYes – RICSprocessArchitectsARBRegisteredarchitectsUnacceptableprofessionalmisconduct orseriousprofessionalincompetence8 weeks NonespecifiedEstateAgents-PropertyOmbudsmanRegisteredestate agentConduct andservicerelatedcomplaintsAccountantsICAEWICAEWmembersUnclear –certainconductissues, but noindicationthey considerservicecomplaintsTaxAdvisers-TDBCIOT, ATIIand IITmembersIncludesinadequateprofessionalserviceFinancialAdvisersAndInsurersFSOWide areaof financialmattersDifficult toaccessDebtmanagers/Bailiffs egHCEOAHigh CourtEnforcementOfficersmembersAffected byofficer’sbehaviourYes Yes Yes Yes Yes Yes Yes8 weeks 28 days 8 weeks 8 weeks NonespecifiedInsolvencyPractitionersEg IPARegisteredIPsWork orconductNonespecifiedMediatorsVariable55

Time limitforcomplaintPowersFinancialLimits9 monthsfrom firstcomplaint tofirmCan fine/agreerestrictions onfirm/ refer toDisciplinaryPanelCannot awardcompensationNonespecifiedadvisearchitect refutureconduct/ refertoprofessionalconductcommittee/fine up to £5kCannot awardcompensationNonespecifiedAdvise reeradicatingfailure/Reportbreach ofCode/compensateNonespecifiedConsentorder/ refercomplaint todisciplinary/unpublicisedcaution£25,000 Cannot awardcompensation12 monthsof eventsubject tocomplaintApology/fine/suspend orexpel amember/CancompensateNotspecified6 months ofdate offirmsresponseCancompensateNonespecifiedInstruct futurebehaviour/fine/recommendremoval ofmembership£150,000 Cannot awardcompensationNonespecifiedWarningletter/consentorder/withdrawlicenceCannot awardcompensation56