SRA Price Transparency: Review confirms nearly 1 in 5 firms not complying at all

10 June 2019

The SRA’s Price Transparency Rules (‘the Rules’) came into force on 6 December 2018, following which, in February 2019, the SRA published a ‘topic guide’ setting out its approach to enforcement of the Rules. One ‘proactive tool’ in the SRA’s toolkit to assist it in the identification of non-compliance is ‘random web sweeps.’

The first such web sweep took place during March / April 2019. On 6 June 2019 the SRA reported on its findings.  The SRA randomly selected a sample of 500 law firm websites, of which 53 sites were found to either not be working or under construction. Of the remaining 447 sites:

  • 25% were deemed to be fully complying with the Rules;
  • 58% were reported to be partially complying; and
  • 17% were reported as not complying with the rules at all.

 The most common areas of non-compliance were failures to:

  • Publish the required complaints information (more than half (52%) of firms were found not to be displaying any complaints information);
  • Specify the amount of VAT applying to costs and disbursements;
  • Display information on key stages and/or timescales; and  
  • Provide a description or costs of likely disbursements.

Next steps

The SRA has confirmed it will be writing to all firms whose websites were identified as not being fully compliant with the Rules, explaining the areas in which they need to make changes.

For those firms found not to be complying with any of the rules (78 in total) the SRA will be reviewing their websites in two months’ time. If still non-compliant, the SRA has said it will consider what further regulatory action is required including potential enforcement action.

Firms found to be only partially complying with the Rules (257 in total) will be notified of the areas they need to address to ensure full compliance. Such firms will be targeted as part of future web sweeps to ensure the necessary changes have been made.

The SRA has confirmed that web sweeps will be conducted on a six monthly basis, with 600 law firm websites being reviewed as part of each sweep.

A thematic review in this area is planned to take place during 2020.

Compliance Tips

The SRA has published six tips for ensuring compliance with the Rules:

Always include the charging basis for your prices

Every price published must include both (a) the typical cost of the service (the total cost, a range of costs, or an average cost); and (b) the basis that you use to charge (such as an hourly rate).

 

Describe the credentials (i.e.experience and qualifications) of the people who carry out the legal work

This information (a) must be easy to find (via a link from the published price, for example), (b) must be provided for anyone involved in carrying out legal work (this may include staff besides partners or solicitors (e.g. paralegals)); and (c) does not have to name individual staff members but a description of the type of experience and qualifications they have is required.

 

Disbursements that are likely to be required must be listed including the cost for each one

An average or likely range of costs is permissible where the disbursement cost is 'genuinely unknown'.

 

The published information must state whether the costs and disbursements attract VAT.

The amount of VAT must also be detailed. As a minimum, firms must say which costs attract VAT and the rate that VAT will be charged at (usually 20%). The position on VAT for overseas clients must also be made clear.

 

Price information

The price information needs to be easy to read and in ‘a prominent place on your website’.

 

Required information

Every firm must include the required information about their own complaints procedure, and information about the Legal Ombudsman and SRA.

 

Commentary

In June last year, Iain Miller commented on the general indifferent reaction of the professions to the price transparency agenda being pursued by legal services regulators. The results of the SRA’s recent web sweep suggest that such indifference subsists for a sizeable proportion of the professions.

Whilst the reluctance to publish information on price is understandable, it is now a necessary compliance step. We have previously provided detailed guidance on what is required to ensure compliance with the Rules,  see here for further information.

Whilst the SRA has, for now, only hinted at the possibility of enforcement action should non-compliance continue, the SRA’s recent review shows its commitment to ensuring compliance with the Rules and it will likely only be a matter of time until such commitment sees enforcement follow.

About the authors

Julie Norris is a Partner in the Regulatory department and specialises in advising in the health, professional services, legal and financial fields. She advises professionals, businesses and regulators on regulatory compliance, investigations, adjudication, enforcement and prosecutions.  

Charlotte Judd is an Associate in Regulatory  department and assists and advises on matters including defending regulated individuals, organisations and corporates; advice for regulators and public bodies and legal services regulation.

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