Warning over unregulated Will writers

Posted on July 19th, 2011 | Categories - Financial News

The Legal Ombudsman has issued a report warning of the dangers of unregulated firms providing ‘legal’ services.

In his first report, Adam Sampson, Chief Ombudsman for England and Wales said property conveyancing, family law and wills made up the majority of complaints he saw.

The Legal Ombudsman was appointed in October 2010 but can only act when a complaint is made about a qualified lawyer; it is therefore powerless to act when the complaint is made about unregulated firms providing ‘legal’ services to consumers.

Consumer groups such as Which? and the law Society have called for greater protection for people who use such services.

Which? executive director Richard Lloyd said: “As the legal services market continues to grow in both size and complexity, it’s crucial that consumers who have paid for a legal service that’s not up to scratch know where to turn to get help.

“We want the government and regulators to wake up to the current lack of clarity and to provide a clear and straightforward route of redress for consumers.

“The arrival of a legal-services market in which consumers will, potentially, have complaints about hybrid services poses some serious questions about who they’ll be able to turn to for help.”

The comments made by Which? are echoed by the Law Society whose chief executive, Des Hudson, said: “The gap in regulation which allows unregulated cowboys to operate in areas like will writing does not just cause unfair competition to solicitors, who provide a regulated, professional service.

“It is also damaging to consumers because the unregulated providers are not insured, do not provide a compensation fund and are not covered by the Legal Ombudsman’s scheme for consumer redress.”

Regulation

Many consumers do not realise that only a tiny proportion of legal services must be undertaken by a qualified lawyer.

Many other ‘legal’ matters such as will writing, employment law, divorce, family law and immigration can be handled by unregulated firms which can leave consumers with little or no redress when things go wrong.

It is in these areas which many believe regulation should be tightened to provide additional protection for the consumer.

Will writing

The report by the Legal Ombudsman focused considerable attention on will writing services offered by unregulated firms.

“One service which crops up a lot is will writing. It’s a service carried out often by will-writing firms who aren’t regulated,” said Mr Sampson.

“Because of this, customers are left with little means of redress when things go wrong.”

“We’ve seen similar confusion about claims management companies, with lots of consumers believing they’re getting a legal service even though most of the work is carried out by a non-authorised person. Again, we can’t help.”

The report from the Legal Ombudsman comes on the back of an undercover investigation by the Legal Services Consumer Panel. When looking into unregulated will writing firms the investigation found evidence of “poor quality wills, sharp sales prices … exorbitant pricing and lost wills – where the companies (that draft them) disappear without trace.”

However the investigation also found that many wills drafted both by will writers and Solicitors were of a poor quality.

In the wake of their findings The Legal Services Consumer Panel called for will writers to be more tightly regulated and for Solicitors to raise their training standards.  If these measures were implemented it is likely that complaints could then be taken to the Legal Ombudsman, giving those who have been badly advised a means of redress.

Dianne Hayter, chair of the Legal Services consumer Panel “The panel was shocked by the poor quality of wills in the mystery shopping. Although the sample was small, will-writing companies and solicitors were equally culpable, pointing to the need for tighter controls across the sector.

“Only by requiring all providers to be regulated and to demonstrate their competence can consumers enjoy peace of mind that their final wishes will be respected whoever prepares their will. The Panel calls on the OFT to coordinate enforcement action with trading standards against these firms.”