The Association of Consumer Support Organisations (ACSO) has responded to the Legal Services Board (LSB) consultation on its draft strategy for legal services regulation and draft business plan for 2021-22.
The response commended the LSB’s decision to develop a strategy for the regulation of legal services as a whole, rather than just for the LSB. Particular focus was paid to the new proposed workstream for the LSB relating to legal expenses insurance (LEI): "[to] explore whether and how legal expenses insurance can help to reduce unmet legal need by convening discussions and adding our voice to the debate.”
Rachel Cairnes, ACSO’s policy and public affairs adviser, said: "As ACSO has previously raised in its formal and informal engagement with the LSB, LEI – a purchasable product through which policyholders can access legal advice and representation with some or all of the expenses covered by the policy – has significant potential to increase access to justice and reduce unmet legal need. Moreover, in light of the ongoing reforms within the civil justice system, including the implementation of the 2018 Civil Liability Act (CLA), the value of LEI to the consumer is likely to increase significantly.
"Research by the Solicitors Regulation Authority (SRA) found that 63 per cent of people do not believe that professional legal advice is affordable for ordinary people. LEI can provide access to legal services and legal helpline advice for those who might not afford or access them otherwise. Legal helplines that are unable to advise consumers on their problems will signpost to another appropriate organisation. In particular, LEI is of significant value to those the International Bar Association (IBA) has termed the forgotten middle – consumers who lack the disposable income to purchase legal services but who do not qualify for legal aid.”
Cairnes continued: "While there have been numerous supportive statements made in relation to promoting greater awareness and uptake of LEI products, there has been little to no tangible industry stakeholder activity either individually or collectively to explore, support and advice how LEI may expand its reach to address the persisting access to justice gap in the UK’s legal services sector.
"In the UK, 8.6 million adults (approximately 17 per cent) are estimated to hold LEI policies, although in comparison to many other countries, particularly Germany and Sweden, its uptake and use is not widespread. There are a number of possible reasons for this, not least a lack of consumer awareness of the product and what it can provide. This is particularly so given that LEI policies are often included in bundles with other insurance products or are brought at the same time as an add-on, meaning many consumers may not be aware they have LEI coverage.
"Echoing the statements expressed by the UK government, the increase in the take-up and use of LEI policies can only be achieved through a "change in culture”. This will require collaboration across the legal and financial services sector, including LEI distributors and manufacturers, consumer bodies, regulators, ombudsman services, government, commercial organisations and policymakers.
"ACSO is already engaged with the relevant industry stakeholders, as listed above, and can support the LSB’s alignment of these various ongoing discussions. The LSB holds a position of significant importance in helping to coordinate this culture change across the legal sector and determine what barriers exist to the greater implementation, uptake and use of LEI across the UK.”
ACSO members can read the submission in full on the members’ area of the website.