Building public trust

Chloe Carpenter makes some interesting observations about the risks of comparison websites and the limitations of self-regulation to '¨manage these.

Generally speaking, the Legal Services Consumer Panel thinks comparison websites are a force for good in this market. Only one in five consumers currently shop around for legal services, while just over half of those who do find this process easy. The Legal Services Act competition reforms will not achieve their potential unless consumers vote with their feet, so it's a good thing if these sites help match people to lawyers who can meet their needs. And this includes the significant latent demand in this market - in other words, the many people who currently do not use legal services for a range of reasons but might benefit from doing so. There's a potential win-win here: comparison websites could increase business for solicitors and provide a cheap window to advertise their services.

Bait pricing

One of her concerns, something we hear very often, is that consumers will "focus exclusively on the headline price rather than on other factors such as the quality of the work or the experience of the lawyer acting". In fact, our research shows that reputation, specialist expertise and location rank more highly than price in the factors consumers take into account when choosing legal services. Therefore, the websites most likely to succeed are those that will provide consumers with the wider information they want. However, there is a genuine problem: objective information about the quality of providers - complaints data, peer review scores, success rates, accreditations and so on - is either hidden from consumers or not available in a format comparison websites can easily access. We need regulators to unlock this data so consumers can choose on quality and price grounds.

Bait pricing - where consumers are enticed by a low headline price, but the final price is much higher once other fees and charges are added - is a risk in legal services. While Chloe Carpenter is right to say it isn't always possible for lawyers to know what the disbursements will be in advance, our fictional conveyancing mystery shopping exercise (the purchase of a freehold property in York) did find examples which showed wide variations in the prices quoted for local authority and water searches. This suggests that law firms have different mark ups on these extra services; if excluded from the upfront quote, consumers might end up choosing a more expensive option.

But our starting point has always been that comparison websites are going to have an increasing influence on consumer choice. There's no point hoping they will go away, while no-one is suggesting they should be banned. However, while comparison websites depend on visitor traffic to survive, they are funded by industry - and in trying to balance the interests of both sides there's a danger that comparison websites adopt practices that mean consumers will lose out. Other sectors have seen problems - for example, around manipulation of choice, limited market coverage and weak privacy controls - that we should seek to avoid. The panel's self-regulation initiative is an effort to prevent these problems in legal services, by working alongside the sites to promote fair dealing from the start rather than deal with bad practices once they become engrained.

Promoting good standards

Self-regulation has a chequered history in consumer markets, but there's evidence of it having a positive impact on comparison websites. Mystery shopping by Consumer Focus found that accredited websites performed better on a range of key criteria, including price transparency. This is a young and fast-developing industry and self-regulation offers a quicker, cheaper and more flexible solution than statutory regulation. It's important to remember that comparison websites are subject to general consumer law. The Advertising Standards Authority tackles false marketing claims, the Information Commissioner investigates data protection breaches, bait pricing is outlawed under the Consumer Protection from Unfair Trading Regulations and it is a criminal offence to leave a fake review on a customer feedback website. Indeed, the Office of Fair Trading has written to 100 sites, including some in legal services, spelling out which bad practices it is watching out for.

We're clear that self-regulation will not prevent all problems. For this reason, we've insisted that all websites included in our scheme include a statement from us that helps to manage expectations. It's encouraging that comparison websites recognise the need to build public trust and have committed to meeting our standards. Also encouraging is that two regulators - the SRA and CLC - also want to make this a success. In a world where comparison websites are inevitable, surely it's worth trying to promote good standards through industry self-regulation from the beginning rather than resort to what will be perceived as the heavy hand of regulation to fix them years down the line?