CMA calls for wholesale reform of legal services regulation

The Competition & Markets Authority (CMA) has called for the Ministry of Justice to undertake “wholesale reform” of the way legal services are regulated.

In a review published at the end of 2020, the CMA argued that there was significant growth in unregulated legal services, fuelled by new developments in legal technology and the greater remote service provision brought about by the coronavirus pandemic.

This, it said, “exacerbated the issues arising from a regulatory framework aligned with professional titles rather than activities” and had the potential to restrict competition unnecessarily or lead to unnecessary costs for some legal services, as well as leaving a regulatory gap.

The review was a follow-up on the progress made since the CMA’s first report on the legal services market in late 2016.

Responding to the review, CILEX welcomed the findings, saying the shortcomings that were apparent back in 2016 “have not been adequately addressed”.

Although the legal services sector was becoming more competitive, CILEX argued that “there were still areas requiring intervention in the interests of consumers that could only be achieved by legislative reform”.

Chair Professor Chris Bones backed “regulating lawyers by the work they do, rather than their professional title”, which would also, he said, “support greater diversity in the legal profession”.

The CMA praised the improvements made to date on increasing the transparency of the price, service and quality of legal services, but said there was more to do to increase “the intensity of competition between providers”.

CILEX agreed, arguing for an “aggressive push” to make them happen, with “more than baby steps to improve the experience of consumers looking for legal advice”.

For an in-depth look at the CMA report, read our feature Competition time.