CMA Compliance Guide

Background

In 2020, the Competition and Markets Authority (CMA) published recommendations for the legal services sector following its market study. The CMA found that consumers struggle to compare legal services on price and quality, which reduces competition and can lead to poor outcomes.

While the CMA’s recommendations are directed primarily at regulators (SRA, BSB, CILEX), they set expectations that apply to all legal service providers, including will writers. The Orchard72 engagement letter templates are designed to help you meet these expectations.

Key Principles

• Transparency: consumers should be able to easily understand what they are paying for and how much it will cost
• Comparability: pricing information should be presented in a way that allows comparison between providers
• Accessibility: key information should be prominent, not buried in lengthy terms and conditions
• Regulatory status: consumers should know whether a provider is regulated and by whom

Fee Disclosure Requirements

Your engagement letter should clearly state:

• Total fee: a fixed fee where possible, or a clear explanation of how fees are calculated (e.g. hourly rate, capped fee)
• VAT: whether VAT is included or will be added, and the applicable rate
• Disbursements: any additional costs the client will need to pay (e.g. probate court fees, search fees)
• Payment timing: when payment is due (in advance, on completion, or in stages)
• What is included: precisely which services the fee covers
• What is not included: services that would incur additional charges

Consumer Rights Act 2015

The Consumer Rights Act 2015 addresses the fairness and transparency of consumer contract terms, and terms that create a significant imbalance to the detriment of the consumer may be unenforceable. Whether a particular term meets that bar is a question for your compliance adviser or another qualified professional. Watch out for:

• Hidden fees: do not bury additional charges in fine print; all costs should be prominent
• Excessive cancellation penalties: deductions for cancellation during the cooling-off period must be proportionate to work done
• One-sided variation clauses: avoid clauses that allow you to change the scope or price unilaterally without the client’s consent
• Blanket liability exclusions: attempts to exclude liability for negligence or breach of contract are often unenforceable
• Automatic renewal: if your service includes a subscription element, be transparent about renewal terms

What to Disclose

The CMA expects legal service providers to be upfront about their regulatory status. Your engagement letter and professional profile should clearly state:

• Regulatory body: which body regulates you (SRA, IPW, STEP, etc.) or state that you are unregulated
• Complaints process: how consumers can complain and which ombudsman or ADR body handles disputes
• Insurance status: whether you carry PII and the level of cover
• Qualifications: your professional qualifications relevant to the services offered