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ICAEW Transparency Rules Consultation results

Author: Professional Standards Department

Published: 24 Nov 2021


1.  The consultation mandating transparency disclosures through regulation was launched on 9 August 2021 and closed on 13 September 2021. The consultation followed the decision by the ICAEW Regulatory Board (IRB) to seek to make a voluntary pricing and transparency scheme, and associated guidance, mandatory.

2.  The consultation followed a series of communications to accredited probate firms indicating that the IRB was reviewing current levels of transparency in the areas outlined in guidance issued in 2019. To raise awareness of the consultation, ICAEW probate accredited firms were sent a notification of the launch of the consultation and invited to participate. Notice of the launch of the consultation was also reported in the wide industry press. In addition, the consultation was placed on the ICAEW website, and the consultation period lasted for five weeks.

Summary of responses

3.  The consultation attracted five responses. Considering the existence of the voluntary scheme, the previous communications to the profession and the limited scope of the changes, the low response rate was anticipated. The respondents raised no issues of significance, who all agreed that the current guidance was appropriate and could foresee no issues with making the scheme mandatory.

4.  None of the respondents indicated that they considered the proposed changes to be disproportionate. All the respondents indicated that they were aware of the existing voluntary scheme and associated guidance. The guidance was scored highly by all respondents. One respondent stated that they did not see any issue with making the voluntary scheme mandatory but said that they could not be certain that there would be no issues in its implementation. Another respondent chose to take the opportunity to state that they believed that there was insufficient awareness of the ability of ICAEW authorised probate firms to provide these services.

5.  The Legal Services Consumer Panel (LSCP) provided a letter supporting the proposed change to a mandatory approach and stating that price transparency helped facilitate consumer choice. However, it went on to note that in its report into the legal services market in 2016 the Consumer Market Authority (CMA) linked pricing transparency and quality indicators. It lamented the absence of quality indicators in the consultation document and stated that pricing transparency without quality indicators would hamper consumers decision making. The LSCP did not provide a response to the individual questions posed.

Detailed Responses:

6.  Question One: Taking into account the Legal Services Board's strategic themes (fairer outcomes, stronger confidence, better services), do you agree the proposed regulatory changes will be effective in opening up the legal services market for more consumers?

6.1 Three respondents answered yes. One respondent answered in the negative. No further comments specific to this question were received.

7.  Question Two: Please rate the usefulness of our Best Practice Guide to Price and Service Transparency to help you implement the proposed regulatory changes. (1 = poor, 5 = excellent)

7.1 Four respondents gave a score of four for the guidance. One respondent scored the guidance 5. None of the respondents chose to provide any basis for the reason for their scoring or other comment about the guidance.

8.  Question Three: We aim to ensure that these changes will not result in a worse outcome or quality of service for anyone due to their background or life circumstances. Please tell us if you think your firm or any of your clients will be adversely impacted due to a protected characteristic (such as age, disability, or race) or due to your individual practising arrangements?

8.1 Two respondents chose to answer this question. The first respondent that they didn’t foresee any issue if “your firm is already transparent with regard to price and service, it doesn't change anything to regulate/mandate it”.

8.2 The second respondent stated that they could not see the requirements as being a problem but noted that this “may change as the new rules start to bite”.

9.  Question Four: Do you have any further comments on the proposed changes?

9.1 Two respondents chose to add further comments. The first stated that they “already try and adhere to best practice so no concerns regarding proposed changes”. The second respondent stated that they had “always striven to be open about all the matters raised”. However, they went on to state that they were concerned about the lack of awareness of the services provided by ICAEW authorised firms. Specifically, the respondent stated that from their experience in many cases “a Chartered Accountant is better placed to offer a better and more reasonably priced professional service”.

Proposed action

10.  In light of the limited responses and concerns raised no additional action is proposed. As the proposed rule change mirrors, the existing voluntary scheme there is already a robust monitoring process in place. Members of the ICAEW Quality Assurance team work with and monitor firms’ compliance and will monitor the new requirement. It is noted that the voluntary scheme was subject to review since 2019 and reports were generated indicating the level of compliance. These reports will continue to be generated and the overall compliance with this and other requirements will be reported.

11.  It is acknowledged that the CMA linked pricing transparency to quality indicators in its 2016 report. The ICAEW responded to the Legal Services Boards consultation on quality indicators in April 2021, a copy of the response can be accessed here. It is important to identify the right quality indicators and mechanisms to enable consumers to understand and use this data to make informed decisions. Trials are taking place in the legal services market to consider how to best take this part of the CMA recommendations forward. ICAEW will consider the results of these trials specifically regarding the practice of probate, their wider application and how best to achieve meaningful outcomes for consumers