Two tier system for regulating will writing would be confusing to consumers, says Law Society
The Law Society warned today that the Legal Services Board’s (LSB) approach to competition with regards to the regulation of will writing and estate administration activities may lead to an undesirable reduction in the consumer protection available.
Responding to the LSB’s latest consultation on will writing, probate and estate administration activities, the Society welcomed the LSB’s agreement with its campaigning priority – that will writers should be regulated – but was concerned the its preferred approach might still lead to problems for consumers and may risk a diminution of standards.
The Society is urging the LSB to ensure that universal minimum protections apply to all those who undertake reserved activities to ensure that consumers are fully protected. It believes that the protections offered by solicitors achieve this and that a two, or more, tier system would be confusing to consumers.
The Law Society also raised concerns that, if the proposals were to require significant changes by the existing regulators of will writing and estate administration activities, this would cause unnecessary delay and confusion.
Law Society President Lucy Scott-Moncrieff said: “Plans by the LSB to make will writing and estate administration services reserved activities are a major boost for consumers, but a multiplicity of different regulators and the possibility that existing regulators might have to amend the existing satisfactory arrangements would be a wasteful use of resources and time as well as cause confusion for firms and clients.
“Regulation is the appropriate means of protecting the consumer in this area and a consistent standard of regulation for all persons authorised to carry out reserved activities is essential. Solicitors are already trained and regulated to provide a good service for consumers. A wide range of legal training, together with the ethical principles of professionalism, owing a duty to the court and acting in a client’s best interests, are embedded within both the initial training and continuing professional development.”
The Society has also stressed that the proposed new rules should be broadened to include will writing and estate administration services as well as powers of attorney and trusts.
The Law Society has significant anecdotal evidence from solicitors that some unregulated providers are preparing probate papers and then getting the executors of an estate to give them a power of attorney so that the unregulated provider can deal with the probate registry and gain control of administering the estate.
Lucy Scott-Moncrieff said: “The issues relating to powers of attorney may not be adequately explained to the consumer, who at the point of signing could be in a vulnerable position.”
The Law Society believes that the extraction of a grant of probate through an appointed attorney by an organisation should fall within the scope of the proposed legal activities. It is vital that this activity is prevented through the new regulatory arrangements.
Further, there is still uncertainty in relation to bodies, such as trade unions or banks, who may offer to prepare a will for free as part of the individual’s membership or bank account package. These services should be covered by regulation even if there is no direct or even timely connection between any reward and the service provided.
In its response the Society also raises concern that incentives for referral arrangements will arise following the reservation of these activities. In light of the LSB’s recent decision, the Law Society accepts that referral fees in this area are unlikely to be prohibited, but it is essential that their payment should be limited where possible and there should be full transparency.
The President added: “We hope the LSB will give due consideration to the comments we make in our response. This is an important area and it is essential that consumers are adequately protected.”