The Competition and Markets Authority (CMA) has launched an investigation into the UK’s unregulated market surrounding the provision of legal services, such as will-writing, online divorce, and pre-paid probate services. According to their research there are around 208,000 unregulated ‘providers’ in England and Wales which is an astonishing number. The Solicitors Regulation Authority believe that this means those providers have 6-8% of the legal services market.
What are the potential problems with using unregulated legal services providers?
The need for review of this sector is long overdue and complaints have been on the rise for many years. The complaints, the rising level of which has sparked the investigation, from people who have used unregulated companies are numerous – from misleading advertising, low initial fees with a substantial bill at the end, documents not being kept in safe storage and lost when the firm disappears. They quite often have no insurance in place if mistakes happen. There have also been reports of pressure selling and coercion of vulnerable customers. The main focus of the investigation is into unfair contract terms where, in some instance, those firms drafting the Will have appointed themselves as Executors the fees for administering the estate are significant.
There are so many options for consumers when it comes to writing a Will but not all Wills are drafted by regulated individuals, as Solicitors. There are options which can look to be more cost effective and in some ways more convenient but these can sometimes be a template with no deeper insight into the clients’ unique circumstances. A Will is a crucial document for everyone to have as it allows you to specify not only how your assets should be divided but can also prevent family conflict after your death. A well-constructed Will alongside specialist legal advice will ensure that all aspects of estate planning are fully considered, including any saving which can be made in respect of inheritance tax.
The pre-paid funeral plan market is fairly new and is marketed on the basis that you can organise your assets before you die and pay the fees now, so that they do not have to be met on your death. The problems with this are numerous, not least being that you have to be prepared to lose those funds if the firm you take out the plan with is no longer in existence on the day you need that service to start.
What is the view of the Competition and Markets Authority?
The CMA said “These services are essential to people, often at the most challenging time in their lives. The CMA is aware that rising living costs mean that people are watching their spending, so shopping around for a more affordable option is attractive and sometimes a necessity. These may not be frequent purchases, but they are life-changing. That’s why it’s so important that we investigate so that people can select the right legal service for them – for divorce or probate or will-writing-with confidence”
Of course there are many unregulated legal services providers who provide a perfectly acceptable service, but identifying which these are can be a problem. The benefits of using a regulated legal firm and an advisor who is appropriately qualified are numerous and we welcome the investigation. The investigation has asked for parties who are interested to comment on it by 4 September 2023 so it is a case of ‘watch this space’.
The Private client team at Roythornes are here to support you with all aspects of planning ahead for your future. Getting to know our clients, understand their needs and wishes ensures that we put the best team around our clients who have the technical and legal knowledge – providing clear, definitive and robust advice.