The new transparency rules: what you need to know
The new transparency rules: what you need to know, A Guest Blog from Vicky Simpson from Teal Compliance
The Legal Services Board have recently approved the SRA’s proposed rule changing in relation to price transparency. What does this mean for your law firm? How are you going to ensure you comply with the new rules by the December 2018 deadline?
Under the new rules, firms will be required to:
Publish on their website price and service information for specified legal services:
- Debt recovery (up to £100,000)
- Employee and Employer tribunal claims (unfair/wrongful dismissal)
- Licensing applications for business premises
- Residential conveyancing
- Road traffic Offences
- The rules do not apply for publicly funded work.
The aim of the changes is to assist clients by providing clarity in relation to their legal fees.
The rationale came from the recent Competition and Market Authority report. Where it was apparent that consumers wanted more information to enable them to make informed decisions about the range of services available to them when accessing legal services.
The report found that the prices charged. The services offered were unclear. Descriptions were ambiguous and that the client was not always getting what they expected.
In addition firms will be required to display the new SRA digital badge, which essentially provides a layer of protection against fraudulent activities. Other changes include the requirement to publish the firm’s complaints procedures, including how and when complaints may be made.
As a firm, you will be required to publish:
- A full description of services offered. This should be included in your Client Care Letter/Terms of Engagement
- The costs of services: These must be clear, no more hidden additional fees. If it is not possible to provide the total costs. You should provide details of the costs in stages, and what each stage entails.
- Hourly rates -v- fixed fee: If the firm is charging on an hourly rate basis these will need to be published. Consider placing these on the profiles of the fee earners on the service pages, so potential clients can see the information sooner rather than later. Firms may also want to consider an hourly rates table on their website. If you are offering fixed fees, ensure that you clearly set out what is and isn’t included in the fee.
- Disbursements: Provide clarity and certainty (where possible) as to what the disbursements will be during the matter. For example, for conveyancing transactions firms may want to consider providing a full list on the website of possible disbursements. In other matters, the firm may want to consider listing the types of disbursements that may need to be funded, so that it does not come as a surprise to the client.
- VAT: Be clear as to what will have VAT added.
- Referral Arrangements: You will need to disclosure any referral agreement you have in place, including how much you will receive. This information should also be in the Client Care letter/Terms of Business.
How can you make this work on your website?
Firms will be considering how to achieve this. You should consider the “user experience” how will your clients find out this information. The draft guidance to support these rules suggests the information should be easily navigable if it is not on your home page.
Some firms are creating specific pages, others are building this into an online quote tool, or are considering connecting to price comparison sites. There is an increasing number of firms that are white labelled under other organisations and they will all need to align, particularly in relation to conveyancing where clients can obtain online quotes.
Complaints information must also be published. It should include your complaints handling procedure as well as details about how and when a complaint can be made to the Legal Ombudsman.
Firms must also display in a prominent place its SRA number and digital badge.
What if I don’t have a website?
If a firm does not have a website the firm must make the information available on request. Firms are not expected to create a website simply to comply with these rules.