Exclusive: Lawyers are under pressure to adopt more “consumer friendly” fee structures amid thousands of complaints from clients about inflated billing charges, the legal watchdog has warned.
In an interview with The Daily Telegraph, Adam Sampson, the chief Legal Ombudsman, raised concerns about clients being “caught by surprise about the way their legal expenses were charged”.
Figures show that one in five complaints received by the independent body, which replaced the Legal Complaints Service in October last year, related to cost queries.
Amid concerns of a lack of transparency over lawyers’ billing, Mr Sampson warned overcharging practices were unchecked, largely in part to “intimated” clients.
According the Solicitors Regulation Authority code of conduct, lawyers “must give (a) client the best information possible about the likely overall cost of a matter both at the outset and, when appropriate, as the matter progresses”.
But Mr Sampson, a former academic, said some firms were failing to abide by the rules. He called for an overhaul of their practices, which had left some consumers facing overinflated bills, sometimes by thousands of pounds.
Mr Sampson said while evidence suggested an urgent need for billing reform, many firms were making “every effort to be transparent with clients about their costs”.
“There is still a historical mismatch of power between lawyers and their customers,” said Mr Sampson, the former chief executive of Shelter, the charity.
“Many times, how much people were quoted and how much they were eventually charged is very different.”
Mr Sampson’s comments come as The Daily Telegraph discloses that Baroness Shackleton, one of Britain’s most high-profile divorce lawyers, increased her bills beyond the time she recorded having spent on her clients’ cases.
The Legal Ombudsman’s office was contacted by more than 75,000 people in its first 11 months of operation and launched nearly 7,000 investigations into services provided by lawyers, with 20 per cent in related to costs “in some way”.
British law firms work on the “six minute” rule to record time worked on a case while high street solicitors tend to charge in 15 minute blocks.
The “units of work” form the basis for a more general hourly rate, which can vary in price depending on the experience. But some charge for a unit despite only working a fraction of the time for tasks such as making a phone call or writing an email.
Mr Sampson, whose body operates under the 2007 Legal Services Act, said clients could be hit with substantially inflated bills due to “hidden” costs or “incidental expenses” that were not explained properly.
He said that in some cases a person required legal representation at short notice, so the ability to “shop around” was limited.
“We accept that it is difficult to give fixed quotes. However lawyers should be able to give consumers an accurate estimate on a range of costs and they certainly should certainly keep people updated on the cost changes,” he said.
Campaigners backed his calls for greater transparency.
“Consumers shouldn’t be put in the position where they’re given a solicitor’s bill which is double, or even triple the amount they were expecting,” said Richard Lloyd, executive director of Which?, the consumer watchdog.
“If solicitors want to remain competitive, they’ll need to offer fairer and more transparent pricing for all consumers.”
Marc Gander, the founder of the Consumer Action Group, said that many consumers were being “kept in the dark” about what they are being charged. He added many firms were “unaccountable” for their practices.
“Ordinary people see the legal profession as rather a law unto itself and when they don’t get the results they hope for, they don’t know how to challenge the service they have received and they feel powerless,” he said.
Des Hudson, chief executive of the Law Society, said his body believed clients “should have as clear a view as possible on the likely costs of their legal work”.
“It is not always possible for solicitors to be precise about this in advance because much will depend on how the work develops and the behaviour of the other side, where there is one,” he said.
“Solicitors are required to be transparent about their charging arrangements and the likely costs to clients and to warn clients where initial estimates are likely to be exceeded.
“There is no doubt that the great majority of solicitors do provide this information to their clients, and the Government’s own independent research shows that the vast majority of clients are happy with the solicitor they use.”