Beware of a legal bargain - | Hudson McKenzie

Beware of a legal bargain

The Legal Ombudsman has warned that using cut-rate legal advisers sometimes leaves people unable to pursue complaints when things go wrong.

The 2007 Legal Services Act came into force on 25th May 2011. The most significant consequence of the Legal Services Act has been allowing legal services to be delivered outside of the traditional law firm structure. These could be either legal disciplinary practices (LDPs) with up to 25% non-lawyers providing legal services, or alternative business structures (ABSs). ABSs allow external investment and ownership of legal practices. It is the introduction of ABSs that has led to unregulated legal service providers being able to offer legal advice. Unregulated suppliers sometimes appear to offer various legal services at an attractive price, but a recent report by the Legal Ombudsman warns that small businesses and consumers should be particularly wary of such legal bargains because it may turn out costly in the long run.

Unregulated providers using stock documents for wills, immigration applications and employment issues, amongst others, are leaving people exposed often with nowhere to complain. The Legal Ombudsman has offered this warning because they can help put things right for consumers and small businesses only if service providers are regulated within the legal domain. Some cheap legal advisers are not regulated at all, therefore consumers’ only option for redress is a potentially long and costly civil court battle.

More than 130,000 unregulated legal service providers are operating in England and Wales are operating outside the regulated legal domain. Accountancy firms, estate agencies and insurance companies are examples of many different types of businesses now offering legal services.

Elizabeth France, Chair of the Legal Ombudsman’s board, said: ‘Buying legal advice is to some extent a lottery for consumers who are understandably confused about whether the people providing it are up to standard.’

It must be noted that the Ombudsman’s research has been conducted to find out ‘how to make the system work better’ for consumers and businesses, so this does suggest that the current lack of regulation for these providers of legal services will hopefully change in the future. In the meantime however, people should be mindful that despite an attractive price tag there is often nowhere to turn to if things do go wrong with unregulated legal service providers.