New SRA Price Transparency Rules

Many practitioners are directly affected by significant new rules on price transparency which have been introduced by the Solicitors Regulation Authority. The rules came into effect in December 2018.

The rules apply to all regulated law firms and are intended to ensure clients and potential clients are able to make an informed choice as to who will provide them with their legal services. According to the SRA, a quarter of all complaints dealt with by the Legal Ombudsman relate to costs.

The new rules follow on from the final report (published in 2016) by the Competition and Markets Authority (CMA) following its market study into the purchasing of legal services in England and Wales, which particularly highlighted the concerns of consumers over pricing, service and quality. It found that consumers struggle to make informed choices because of lack of transparency – and there were also concerns about the competence of conveyancers and the quality of service they provided.

Pricing transparency

The SRA has issued guidance which firms will find invaluable in implementing the new requirements. The rules apply to residential conveyancing, uncontested probate where all the testator’s assets are in the UK, summary only motoring offences, employment tribunals (unfair or wrongful dismissal claims) and immigration (except for asylum applications).

The rules also apply to some services to business organisations. Those are debt recovery up to £100,000, employment tribunals (defending unfair or wrongful dismissal claims) and licensing applications for business premises.

Under the rules, clients must be given early, clear, transparent pricing information about the legal services they are seeking. Firms must provide, as a minimum, the following information about price and what this includes:

• Pricing information must be displayed prominently, in a clear and understandable format (this will be the firm’s website in most cases – where it can easily be edited when required). The LSB says just 17% of legal service providers published their prices on their websites in 2016

• Pricing must state whether VAT is included

• Firms must provide a total cost if possible (based on a typical case/transaction), although an average or a range of costs can be given where a total cost cannot be provided

• Firms must state the likely disbursements and their costs must be stated

• The price must state what is included, even in the case of a fixed fee quote

• Where a range of costs is set out, this must show the basis such as hourly rates, and factors determining a final price

• How long the work will take

Conveyancing quote generators

With conveyancing quote generators increasingly common, practitioners should note the specific requirements where an online quote generator is used. For instance, a price generator must produce a quote directly without requiring any additional contact. Firms must also comply with data protection legislation when handling data from consumers or clients.

The SRA guidance offers tips for best practice including a template for conveyancing as an example of information you could request when using a price generator. The SRA acknowledges that a binding quote is not often feasible, so lawyers are recommended to outline the factors that typically increase costs, eg. where building regulations approval is missing, or the existence of a boundary issue.

There are also requirements where the delivery of the service (eg. online or face-to-face) will impact the price.

Is it just about pricing?

No, the SRA’s requirements extend beyond pricing transparency to the service to be provided. For example, firms must explain:

• The services which are to be included within the price quoted

• Any services not included within the price, which a client may reasonably expect to be included. This will (says the SRA) be based on your experience of what your clients tend to expect)

• The key stages and typical timescales for the services to be provided

• The qualifications and experience of those carrying out the work, and of their supervisors

This information must be provided in a clear, easily understandable and clearly signposted format. Technical language and legalese should be either avoided if possible, or else explained.

Find out more.

For a more in-depth look at the Price Transparency Rules, the SOLICITORS group will be publishing a 1-hour lecture later this year, available to watch on Webinar, DVD or CD. This will be delivered by the leading speaker Trevor Hellawell. For information on how to book this Distance Learning session and others, please take a look at our new brochure here.

 

 

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