Are solicitors’ clients often overcharged?

Are solicitors’ clients often overcharged?

A new system of regulation for the legal profession has been introduced. In a move away from a rules based approach, outcomes focused regulation (OFR) is the Solicitors Regulation Authority’s (SRA) new approach.

The SRA will be implementing OFR from 6 October 2011. It claims to be outcomes focused and risk based, and aims to provide clients with services that are tailored to their particular needs. OFR means that firms and practitioners will have greater flexibility in establishing how they can achieve the best outcomes for their clients. The SRA has published a handbook which underpins the regulation of solicitors, law firms and alternative business structures (ABS). It brings together all of the SRA’s regulatory requirements into a single structure and underpins the regulation of solicitors, law firms and ABS. It sets out ethical standards that the SRA expects of law firms and practitioners, and the outcomes that it expects practitioners to achieve for their clients.

The SRA claims that OFR in practice means a different way of thinking and operating. There are ten principles. Most of these are similar to the core duties contained in the current Code of Conduct, but there are some new ones. They now stand alone at the beginning of the handbook and underpin all of the regulatory requirements. The SRA say that whenever a regulatory issue is to be considered the first point of reference should always be the principles. They apply to everyone the SRA regulate, not just solicitors in traditional firms and in-house practice but also, in due course, to new entrants to the legal services market such as non-lawyer managers of ABS.

So far so good. But what has really ruffled feathers are allegations that customers who go to law firms are too often left in ignorance about progress in their case, then burdened with a huge bill at the end of proceeedings. According to the ‘Guardian’, at the launch of OFR the chief executive of the SRA, Antony Townsend, said there were instances of gross overcharging, and that consumers needed to be given more information about costs. In their research the key concerns that had come from consumers were to do with information. He said: “The biggest worries were lack of clear expectations and a lack of clarity about charging. Clients feel they don’t know what’s going on, there are delays that are unexplained and they are handed a huge bill at the end…There are some cases of gross overcharging and we do take action, but we are not a price regulator. Where someone has been grossly exploited we will take action.” When asked if a double-dip recession would trigger a fresh outbreak of embezzlement cases among lawyers he replied: “Yes. Small firms are operating in a very difficult environment. In desperate times solicitors may borrow money from the clients’ account and it goes from bad to worse.”

If comments posted on the Linkedin website are typical then there is acceptance that this is a great opportunity to explain to the public the level of service they can expect from a solicitor. But there is resentment that the solicitors’ own regulatory authority should portray the profession as a bunch of overcharging embezzlers. Rather the authority should be highlighting the good practice of so many in the legal profession.

This post was written by:

- who has written 460 posts on Upper Case – The Anya Legal Journal.

Mike Gribbin is a retired Civil Servant with wide experience, including the drafting and implementation of Parliamentary legislation and regulations. He is the editor of “Criminal Offences Handbook”, a uniquely comprehensive guide to more than one thousand ways to fall foul of UK criminal law. He is Editor of the Upper Case Legal Journal and has been writing blog posts for the past eight years.

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