"More simplicity" please - regulators come together to discuss challenge of building trust

Opening the event, 'Trust and the Market: rethinking regulation', Paul Philip, the Solicitors Regulation Authority's (SRA) Chief Executive, explained how regulators across different sectors faced similar challenges: how do they help build public trust, manage professional standards and best serve the public interest.

Mr Philip believes that the lack of independent regulation is having a negative effect on public trust in legal services. Polling has shown that seven out of ten people would trust solicitors more if they were independently regulated.

He said: "Currently people see the SRA as the Law Society in disguise," and added: "Making regulators independent would help bolster public trust." He explained that the Law Society has a legitimate and important role to represent the profession, but that is different to working in the public interest.

The process for taking serious disciplinary action against solicitors was also creating a perception problem. Currently allegations need to be proved to the criminal standard of proof. Mr Philip said: "If you complain about a solicitor and find out you need to prove your case beyond all reasonable doubt, you might feel the dice are loaded against you. And you might think this is an old boys club, where you are not getting a fair crack of the whip." To make the process fairer, he called for the Solicitors Disciplinary Tribunal to use the civil standard of proof, which looks at the balance of probabilities.

Mr Philip went on to talk about access to justice. Research shows that only one in ten people use a solicitor when they have a legal problem.

He said: "Too many people simply cannot afford to use legal services. Addressing that unmet need has to be a priority. We want to free up businesses to do business, pushing down costs and increasing access to justice."

Removing unnecessary, complex rules

The need for regulators to move away from complex rules and regulate in a smarter way was a recurrent theme. The Director of Strategy at the Legal Services Board, Caroline Wallace took the view that regulators should not be overly prescriptive about all rules being followed, so that you can “use your discretion about how you achieve the right outcomes”.

She added: “Even more important is not doing things we don't need to do. We shouldn't  justify a need to tick a box, we've got to get smarter than that." 

SRA Executive Director of Policy Crispin Passmore argued that when it came to developing affordable services, too much regulation could be part of the problem. He said: “The price of excellence might be irrelevance if people cannot afford legal help. Regulators can do their bit by taking a proportionate approach, removing unnecessary rules, and opening up markets to help tackle the problem."

Mike Petrook, Director of Communications and Corporate Affairs at the Institute of Customer Service believes that too many rules can also lead to poorer service. He said: "Sometimes when regulation is very heavy, it means customer service can become too regimented, it is almost like companies end up following a script."

Removing rules which restrict entry to the market could also benefit consumers. In a lively session on innovation, Rosemary Martin, Vodafone Group General Counsel, said: "A lot of innovation in the legal sector is coming from outside the traditional law firms."

Nigel Savage, Director of Savage Hutchinson Consulting, set out that encouraging new entrants is just as important in the education market. He said: "Dominant training providers can constrain innovation." And added that innovation is more likely if training has a focus on client needs: "Law is the backcloth to providing solutions for clients. Training should reflect that."

Helping consumers make better choices

Speakers agreed that a challenge for regulators was making sure information in the market was easy to understand. Glyn Gaskarth, Head of Crime and Justice at Policy Exchange, said this was hard with legal services: “It's very difficult for people to work out whether or not they are getting a good service as it's not transparent at all.”

In the Competition and Markets Authority (CMA) interim findings into how well the legal market is working for consumers, the lack of clear information was seen as a big problem. Chris Jenkins, Economics Director at the CMA said that the "legal services market is not working very well in some respects". Better information could help drive a healthier, more competitive market.

Elisabeth Davies, Chair of the Legal Services Consumer Panel, believes there is still a way to go, pointing out that only one in four consumers were  shopping around for legal services and this has only slightly improved over the last five years.

Comparison websites

Mr Jenkins identified comparison websites as one area that could improve the situation. He said: "Legal services are not the same as energy or insurance, but consumers still need good information to make informed choices." And added: "Comparison websites play a vital role in driving competition."  Can we expect a 'TripAdvisor' for legal services any time soon?

Matthew Briggs is trying to plug that gap. He is CEO of Law Superstore - what he describes as the UK's first legal comparison website. He believes comparison websites need to be a trusted source to succeed. He said: “We need honest, authentic, genuine reviews, then clients will be able to see a truer picture and that they are not all five stars.”

Cathryn Ross, Ofwat Chief Executive, believes empowering consumers is not just about more information. "Transparency is not about making lots of information available. It needs to be the right, user-friendly information to help consumers make good choices," she said.

Ms Wallace agreed: “We need to be very careful with the assumption that everybody has lots of time to sit down and carry out a huge analysis about every different decision in their lives, they don't. They use shortcuts for decision making and if we can understand that, consumers can be protected from exploitation from those behaviours. We, as a group of regulators, need to be very alive to that."

Dame Janet Paraskeva, Chair of the Council for Licensed Conveyancers, supported more transparency, including around costs so that consumers "can compare in a systematic fashion."  But she also cautioned that careful thought needs to be given to publishing data on complaints and regulatory action, which could have serious implications for a firm.

Building trust and the importance of independence

Whether its utilities, medicine, financial or legal services, one of the biggest challenges facing regulators is how they build and maintain public trust.

Ben Page, CEO of Ipsos Mori, presented research showing that trust and integrity was more important to the public than ever before. Yet trust varies across sectors. It was higher in businesses producing tangible goods, such as retailers, manufacturers and supermarkets. At the bottom were sectors  like insurance, banks and utilities. Similarly, law firms had a way to go in building trust, with only 28 per cent of people saying they trust law firms.

Speakers echoed the SRA's view that independent regulation could build trust. Mr Page showed that 82% of the public polled wanted independent regulators for solicitors. He said: “People today start from a place of suspicion, so the more independence you can offer people the better.

“I don't think people are lined up outside this building with flaming torches saying bring on the independent regulator but obviously independent regulation seems more transparent than having something run by self-regulation."

Simon Howard, the head of professional standards at the Architects Registration Board, said the public expect independence. He said: "We need to regulate without fear or favour. Sometimes the professional interest conflicts with the public interest." He added: "You need to be independent in regulating that."

Setting the right standards

Trust also comes from the public confidence that high professional standards are set and enforced. Mr Jenkins said: “You have to trust that lawyers know what they are doing, have been properly trained and have the appropriate experience to do their job.”

Ms Wallace was clear that regulators are best placed to set standards. She said: "Professional standards should be policed by the regulator, as it is crucial when deciding who enters the market."

Hugh Simpson, Director of Strategy at the General Pharmaceutical Council (GPhC) has seen the benefits up close of separating the regulator and representative body.  It is the GPhC who leads on setting the regulatory standards required for pharmaceutical professionals. He said that in the six years since separation of the GPhC and the Royal Pharmaceutical Society of Great Britain, everyone had benefited, including the representative body who had been "freed up" to focus on their role.

The event highlighted the many similar challenges regulators face. There was agreement that getting rid of unnecessarily complex rules and making legal services more accessible for consumers was essential. A point summed up by Mr Page when he argued that what people want all over the western world is “more simplicity”.

Mr Philip closed the day by explaining his commitment to making the SRA's regulation simpler and clearer - both for law firms and the public.

He said: "We have certainly made inroads into making things simpler and reducing bureaucracy over the last two years. There is still a long way to go. I see a focus on high professional standards and an open competitive market as the way forward.

"If regulation is to work in the wider public interest, that means we need to understand both the market and what people want."

'Trust and the Market: rethinking regulation' had gone a little way to helping build that understanding.

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