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LSB finds ‘compelling case’ for regulation of will writing

Board’s U-turn on estate administration is attacked from all sides

13 February 2013

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The Legal Services Board (LSB) will today recommend to Lord Chancellor Chris Grayling that will writing should be regulated to restore consumer confidence in the market and reduce significant risks.

The LSB found a ‘compelling case’ for will writing becoming a reserved activity after a two-year investigation under sections 24 and 26 of the Legal Services Act 2007.

However, it has made a U-turn on estate administration, deciding it is a “criminal rather than regulatory issue”.

Disappointing decision

The Legal Services Consumer Panel, Institute of Professional Willwriters (IPW) and Law Society have voiced their disappointment about this conclusion.

Chair of the legal services consumer panel Elisabeth Davies said: “While unregulated businesses may currently have a small market share, the damage they can cause to beneficiaries – either through fraud or poor service – is potentially huge.

“Dealing with an estate can involve life-changing amounts of money, but this decision will leave people without a safety net should things go wrong, and at a time when they are feeling at their most vulnerable.”

The IPW highlighted the “huge risk for consumers because this process involves handling money and assets belonging to a deceased person” and said it would continue to campaign for estate administration to be regulated.

Law Society president Lucy Scott-Moncrieff shared these concerns. She said: “We submitted evidence to the LSB of people who have been prosecuted for running off with estates, among other problems that have been caused by unregulated people doing this work. At the moment unregulated individuals are charged with distributing considerable sums of money.

“It is becoming more difficult to assist consumers to identify reputable service providers. The evidence hints at many more cases where beneficiaries do not obtain what they should.”

The Law Society is urging the LSB to ensure that all those seeking the services of a willwriter are entitled to the same minimum protections – those already in place for solicitors’ clients.

Consistent evidence

The LSB took its evidence from a qualitative rather than quantitative mystery shopping exercise. CEO Chris Kenny said the “consistency” of the complaints added weight to its recommendations for will writing to be regulated. “We didn’t think there was any alternative but to go ahead,” he said.

Its recommendations on will writing include preparing and drafting any will or codicil and any subsequent amendments, providing advice relating to the preparation of a will or codicil and any subsequent amendments and advising on and overseeing the execution of a will or codicil.

The aims are to allow access to the legal ombudsman for consumers of all will-writing providers, increase competition by creating a level-playing field between traditional law firms and new service providers, and requiring regulators to identify and target risks.

The retraction on estate administration was based on evidence that “did not compellingly demonstrate systemic fraudulent or dishonest practices or other problems causing significant consumer detriment within the unregulated sector”.

The report also referred to the small market share held by unregulated estate administration providers. “If will-writing activities are made a reserved legal activity, the opportunity for providers of estate administration services unwilling to engage with regulation to attract clients would be reduced,” it states.

The LSB also asks for probate to remain a reserved activity.

Kenny said the board would provide guidance to regulators but there would not be a model set of rules.

Grayling has 90 days to make a decision. Private Client Adviser will bring further updates.

Categorised in:

Legal services Wills, Trusts & Probate