Correspondence

Open letter to the unregulated legal services sector

Published 9 October 2024

From Cecilia Parker Aranha, Director, Consumer Protection
Date: 9 October 2024

Competition and Markets Authority (CMA) open letter to the unregulated legal services sector

Dear Unregulated Legal Services provider

The CMA is publishing this open letter to unregulated businesses providing will writing, online divorce and pre-paid probate services in the UK.^{[footnote 1]}

The purpose of this letter is to highlight new guidance the CMA has published, which is intended to help unregulated providers of these services to understand and comply with their obligations under consumer protection law better.

CMA investigation into the unregulated legal services sector

The CMA began its investigation into the Unregulated Legal Services sector in June 2023 following complaints and concerns – identified as part of the CMA’s general intelligence-gathering functions – relating to the provision of online legal services by unregulated providers, and specifically in the areas of will writing, online divorce and pre-paid probate services. The CMA’s investigation has identified concerns that some traders in the sector may not be complying fully with their responsibilities to consumers under consumer protection law.

Consumer protection law requires that:

• businesses provide consumers with the information they need to take informed decisions; for example, businesses should:

  • provide consumers with material information^{[footnote 2]} in a clear, intelligible, unambiguous and timely way before they make decisions

  • provide consumers with certain pre-contract information in a clear and comprehensible manner

  • provide information which is correct and does not give a misleading impression even if it is factually correct

• businesses ensure that their terms and conditions are fair to consumers, for example by ensuring that those terms and conditions:

  • are accessible

  • do not allow for unfair price increases or for ‘hidden fees’ to be charged

  • do not seek to unfairly exclude or limit liability

  • do not include unfair provisions relating to subscription services

• businesses perform their services with reasonable care and skill

• businesses do not use sales practices that are aggressive, or otherwise contrary to statutory obligations

CMA compliance guidance

The CMA is today publishing compliance guidance for businesses, outlining their obligations to consumers under consumer protection law. The CMA expects that this guidance will, together with existing CMA guidance, support businesses in ensuring that their contract terms and business practices adhere to the law.

The guidance sets out the CMA’s view on the key requirements of consumer law which all businesses, including providers of unregulated legal services, must comply with. The guidance also contains more focussed chapters dealing specifically with the provision of will writing and online divorce services. There is also a chapter setting out the CMA’s views on pre-paid probate schemes.

We have aimed to make the guidance as user-friendly as possible by providing straightforward ‘do and don’t’ lists, together with some more in-depth case studies which illustrate what the CMA considers to be compliant practice in the sector.

The compliance guidance does not create new legal requirements for business, and it is not a substitute for the law itself.

Alongside the compliance guidance, the CMA is also publishing guides for consumers to help them understand what to consider when buying will writing services and what to look out for when buying divorce services. Businesses may wish to make consumers aware of the consumer guide relevant to the service they provide, for example on their websites or other marketing materials.

Next steps

The CMA expects unregulated businesses providing will writing, online divorce, and/or pre-paid probate services to read and consider the guidance document, and then to review their contract terms and general business practices. Where necessary, businesses should make changes to ensure that they comply with the law.

The CMA will continue to monitor the sector and we expect to carry out a compliance review in due course, to assess businesses’ compliance with consumer law in relation to the provision of will writing, online divorce and pre-paid probate services.^{[footnote 3]} If we continue to have concerns with a business’s practices the CMA will consider taking enforcement action. Businesses should note that local authority Trading Standards Services are also able to enforce consumer law in the UK independently of the CMA.

In addition, the Digital Markets, Competition and Consumers Act 2024 (‘DMCC Act’) received royal assent in May 2024. At the time of publication, the relevant provisions of the DMCC Act have not yet come into force. The DMCC Act will give the CMA additional enforcement powers, including the power to impose financial penalties for breaches of consumer protection law. The Government expects to commence these provisions in April 2025. Future action by the CMA against breaches of consumer law by providers of unregulated legal services could therefore result in the imposition of such a penalty.

Businesses should also be aware that in addition to any action which the CMA, or a local authority Trading Standards Service, may take, individual consumers will have the option of pursuing a claim against businesses for alleged breaches of consumer law.

If you think your contract terms should be changed in light of this guidance, please refer to our unfair contract terms guidance, and in particular our guidance for businesses on how to write fair contracts.

Yours faithfully,

Cecilia Parker Aranha

Director, Consumer Protection

Cecilia.Parkeraranha@cma.gov.uk

1. In this context, ‘unregulated’ businesses are those not regulated by an approved legal regulator. ↩

2. Information which the average consumer needs to make informed decisions about transactions. ↩

3. Subject to the CMA’s prioritisation principles. ↩