Will-writing furore sparks debate over probate regulation
07 September 2010
Neil Rose, Editor of legal regulation website Legal Futures
The case of an elderly woman who was charged £1,000 for a straightforward will and then driven to her bank by the will-writer to withdraw the money in cash is the kind of rogue behaviour that persuaded the Scottish government to announce plans in June to regulate non-lawyer will-writers.
In another case, consumers wanting a will were sold specialised services they did not require and ended up paying £2,400 when a simple will costing £150 would have sufficed.
The community safety minister, Fergus Ewing, said: “We are very concerned that some non-lawyer will writers may be exploiting the lack of regulation to the detriment of the consumer in Scotland.” The news came as the Institute of Professional Willwriters (IPW) – one of several groups representing will-writers – became only the 10th organisation to win Office of Fair Trading (OFT) approval for its code of practice.
Wills and probate is currently the battleground for supremacy of the legal market. At its heart is the issue of whether writing a will should be a reserved legal activity, a seemingly esoteric subject which in reality is anything but.
Big business
The OFT estimates that 53% of people do not have a will. Solicitors Regulation Authority statistics shows that 4,364 law firms provide wills, trusts and tax planning advice. The IPW reckons there are around 2,000 non-lawyer will-writers in 600 firms. LawPack, the leading provider of DIY wills, sells around 200,000 packs a year. This is a big business.
Despite the Law Society presenting dossiers of cases where it says unqualified will-writers have made costly mistakes or sought to exploit consumers, the Ministry of Justice has consistently batted this away, saying it has not seen compelling evidence of consumer detriment. Notably there has been no similar pressure from consumer groups (some of which offer will products themselves). But the recent BBC Panorama programme which uncovered dodgy dealings by will-writers, has pushed it up the agenda, leading the super-regulator, the Legal Services Board (LSB), to fast-track a decision on whether to take action ahead of its work on the broader framework of reserved legal activities.
The Legal Services Consumer Panel, which advises the board, also seemed fairly relaxed but has now launched a formal investigation to inform the LSB’s decision. Dr Dianne Hayter, who chairs the panel, has previously questioned what the real consumer detriment here is. Is it that some people have badly drafted wills, or is it actually that most people do not have one at all? Do we know that solicitor-drawn wills are actually better? What about the fact that wills are not held in some kind of central depository, or are often not updated after a significant event in a person's life, such as marriage – could they not be equally big problems?
The early signs from the LSB are that it is not keen on reserving will-writing to lawyers. This is because the potential higher cost might discourage consumers even more from writing a will in the first place, while it would do nothing to solve the problem of unfair bundling of estate administration charges. This does not mean it would not recommend an alternative form of regulation.
It is, of course, in the legal profession's interest that will-writing becomes a reserved activity, but lawyers argue it is in the public's interest, too. However, the reality is that for all the anecdotal evidence, there is no piece of research which adequately portrays a full picture of what is happening in the market. The LSB is now commissioning this, backed by the OFT saying that a move to make will-writing a reserved activity should not happen without a cost-benefit analysis.
Wider issue
There is a wider issue around probate as a reserved activity (in fact, an article in The Times recently called for the LSB to consider regulating probate genealogists too in response to Title Research’s campaign over fees). Currently, the only part of the work that is reserved is preparing the papers on which to found or oppose a grant of probate or of letters of administration. Nothing on the administration of the estate, say, which is arguably where the greater risk of mischief lies. In his review of legal regulation for the Law Society, Lord Hunt of Wirral recommended that the whole of probate activity should be regulated.But a paper produced by the College of Law’s Legal Services Policy Institute has warned the LSB that it would be “unwise” to increase or reduce the list of reserved legal activities at the moment. In the first part of research into reserved legal activities, Institute director Professor Stephen Mayson said he had found the origins of the six activities currently reserved to be “remarkably obscure” with “little basis for suggesting a common policy rationale that justifies their existence”. He said it would “unwise to consider any particular legal activity for inclusion or exclusion in the absence of a broader set of criteria that could be generally applied”.
Professor Mayson is now starting work on the second part of the research, which will seek to suggest a contemporary policy approach to regulation and reservation. He will be looking at whether there is a public interest rationale for any legal activity being regulated, and if so whether it should be done by reservation or some other form of regulation. Further, if there is a case for regulation, should it be of the activity, of the individual who provides the service, or of the entity within which an individual is working?
Hotting up
In the meantime, the battle for wills and probate is only hotting up. The various will-writing bodies are each bidding to lead the way, while the Institute of Legal Executives has applied to the LSB for the ability to grant its members the right to offer reserved probate activities, meaning they could set up in independent practice. This ability has already been granted to the Law Society, the Bar Council, the Master of the Faculties (which regulates notaries), the Council for Licensed Conveyancers, the Institute of Chartered Accountants of Scotland and the Association of Chartered Certified Accountants (though the two latter bodies have not yet authorised any members to provide probate services).
This shows how much interest there is in the work, while the competition will become fiercer still more once alternative business structures (ABSs) come into being – the latent demand and possibilities to “commoditise” aspect of wills and probate work make it very appealing to outsiders eyeing up the legal market.
Research three years ago by Consumer Focus showed consumers are looking for alternatives to solicitors in providing will-writing services, and with the coming of ABSs, even if the activity is reserved, that will not save solicitors from innovative competition – as it is the Halifax's legal website, Halifax Legal Express, currently offers online wills from £48.
But all is not lost for solicitors. They continue to dominate the market but need to look at how they respond to these threats before it is too late. Doing nothing, in all likelihood, will not be an option, so better use of technology and innovative marketing are among the issues they need urgently to consider. Let battle commence.
Neil Rose is the Editor of legal regulation website www.legalfutures.co.uk. Neil Rose is also Editor of the Legal Executive Journal and contributes articles to The Times and Guardian newspapers.