In 2012, the Government released a White Paper on open data, which set out how the UK could, “unlock and seize the benefits of data sharing”. Since then, the case for regulators to make information available about providers to inform consumer decisions has been well established.
To understand how open data could develop in the legal services market, the LSB carried out a thematic review, which looked at:
- where increased levels of open data in the legal services market could help consumers to choose the service that best meets their needs
- the barriers that are preventing intermediaries from developing comprehensive choice tools, and how (if at all) these can be addressed
- the effect of regulatory interventions in other markets to increase open data.
Open data in the legal services market
As part of this review, the LSB asked the Legal Services Consumer Panel (the Panel) to consider what kind of information regulators could collect from lawyers to benefit consumers. In response, the Panel published a report, Opening up data in legal services in February 2016, which sets out fifteen recommendations for the regulators, the Legal Ombudsman and the LSB. The LSB accepted the three recommendations that the Panel made to us, and responded to all of the recommendations in a letter to the Panel in April 2016. The letter sets out that we will continue to take close interest in the Panel’s engagement with the regulators and the Legal Ombudsman to increase the amount of open data available to benefit consumers.
Barriers to intermediaries
In 2012, a report by the Panel examined barriers to the growth of intermediaries in the legal services market. Since then the LSB and the Panel have worked together to help ensure basic registration data about lawyers is in the public domain. During this thematic review, the LSB engaged with the “big four” economy-wide comparison websites to gather their views on the commercial attractiveness of the legal services market. Their responses suggest barriers are likely to deter entry on a significant scale in the near term. However, market conditions may evolve to become more suitable in some market segments, such as conveyancing. While the “big four” comparison websites have been cautious, we are aware that there has been external investment to support entry by a range of niche market entrants.
Regulatory interventions in other market
During the thematic review, the LSB carried out an ongoing review of proposed interventions into regulated markets to understand how they might apply to legal services. In its status as an observer member, the LSB contributed to a UKRN analysis report of price comparison websites, published in September 2016. The report looks at the role of PCWs across regulated sectors and looks to understand consumer expectations and how PCWs are regulated.
Further project work in 2017/18
These three areas are highly relevant to two market studies currently being undertaken by the CMA:
- The CMA market study into legal services is relevant, given that one of the core themes is the ability of consumers to drive effective competition by making informed choices. The final report was published on 15 December 2016. We have accepted the CMA’s recommendations and have a separate project focused on delivering them.
- The CMA market study into digital comparison tools (DCTs) will examine whether the DCT sector is working well for consumers, and to determine how to maximise the benefits they offer. The LSB welcomed this market study in its response to the statement of scope in October 2016. We will continue to engage with the CMA on this cross-sector study, which is due in September 2017.
For more information on this project, please contact the project manager Callum Armstrong.