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Price Transparency Rules - what are they and how will they help your clients?
Price transparency rules – What are they, and how will they help your clients?
Most clients are price sensitive when it comes to selling or buying properties, but find comparing quotes received from law firms to be a complicated and difficult process.
In order to provide your clients with further help and guidance, it is worth making them aware of the new price transparency rules, as devised by the Solicitors Regulation Authority (the SRA). The rules came into force from 6 December 2018.
Why were the rules brought in?
The SRA considered that there was a lack of transparency for consumers in the legal services market, in relation to price, quality and service. The rules address this inconsistency by requiring law firms to publish certain information for legal services.
Which services are affected?
The rules are currently limited to certain types of legal service provided by SRA authorised firms and individuals providing services to the public from outside authorised firms (eg in-house solicitors).
For members of the public, the services are:
- Residential conveyancing
- Uncontested probate cases
- Immigration (excluding asylum)
- Summary only motoring offences
- Employment Tribunal claims for unfair or wrongful dismissal
- Debt recovery (up to £100,000)
- Licensing application (business premises)
The SRA has said that the ‘price information must be presented in a clear and easy to understand format’ and firms must also:
- Provide a total cost, if this is not possible provide an average or range of costs
- Explain the basis of your charges, including any hourly rate or fixed fees
- Highlight likely disbursements, and their costs
- Be clear on whether VAT is included
- For conditional or damages-based fees, explain when clients may have to make payments.
- Explain the services included for the quoted price
- Highlight any services not included within the price
- Include information on key stages and the typical timescales of these
- Publish qualifications and experience of anyone carrying out the work and of their supervisors.
No hidden fees
Conveyancing clients may have received quotes in the past which did not detail the additional fees they may be liable for, and only discover these once their transaction is due to complete and their final statement has arrived. The information may not have been clear on their quote or on the firm’s website.
Also, if the information isn’t clear, then clients are not making an informed decision on price at the outset.
As of 6 December 2018, SRA regulated law firms now need to display details of their fees and the extent of the services provided on their website. If the firms do not have a website, then they are to provide the information in another format.
The regulations make it less likely that there will be any hidden fees. If clients are unsure, then they could challenge the firm and ask them whether they are complying with the rules and that the quote they have received/had sight of, shows the full extent of the fees to be charged.
As an agency, you may regularly recommend/refer a number of law firms to your clients, and it is worth checking whether these firms comply with the rules and provide details of their fees and services on their websites.
By making the clients aware of the existence of the rules, you are assisting them in making an informed decision and adding further value to the service you provide.
Some firms may be concerned that they will only be judged on price, rather than quality of service, by simply displaying information on their pricing. However, in our experience, clients look for quality of service first, then price and we view the rules as a great marketing opportunity.