Legal Advice or Legal Information - What is the Difference?

At Cambridge Family Matters, we encourage our clients to work out when they need legal information relevant to their case and when they need legal advice from a solicitor, providing them with ‘regulated’ services (regulated by the Solicitors’ Regulation Authority (SRA) which benefits from indemnity insurance to cover poor ‘advice’). We believe we fit into the new innovations in law, which are encouraged by the SRA, to distinguish between legal advice (regulated services) and legal information and support (unregulated services).

However, change moves slowly in the legal world. Despite the SRA’s plans to introduce freelance solicitors and to allow solicitors to practise from unregulated firms such as Cambridge Family Matters, with its new Standards & Regulations going live in November of this year, there is much resistance from the legal profession, focusing around which work needs to be insured and which work doesn’t.

At Cambridge Family Matters, we can’t help feeling that some lawyers are missing the point of innovation. Sometimes, the only legal advice separating couples need is whether they need legal advice or financial advice in the first place. Many separating couples feel perfectly comfortable to seek information about the law as it applies to their own circumstances, rather than advice about achieving their best position, and to then make their own decisions for their family. This is often how mediation works, with lawyer mediators often providing legal information within the process of mediation, and not legal advice, then facilitating a discussion between two people to support them to come to their own decisions, to take responsibility for those own decisions, whilst facilitating a process which achieves an outcome that would be acceptable to the judge who oversees and rubber stamps their ‘Consent Order’. Indemnity insurance costs very little for mediation and mediation costs considerably less than legal advice. The mediator contracts to give accurate legal advice and to steer the process by managing power imbalances, for example, but the client assumes the risk for their own decisions, subject to being given accurate legal information and being advised by their mediator to take one-off legal advice on their decisions.

Clients might take a one-off piece of advice from their lawyer at the outset or might double check the agreement they have reached at the end of the process, and they might want the security of knowing that this piece of information is solid advice that they can rely on, complete with indemnity insurance cover for ‘wrong’, inaccurate or incomplete advice, but do they need indemnity insurance and the higher fees of legal advice at every step along the way? We believe our clients ought to be given enough information to decide this for themselves.

At the moment, however, the chair of the Legal Services Consumer Panel has strongly attacked the SRA for changing its insurance requirements for freelance solicitors without giving a reason. Sarah Chambers said allowing freelance solicitors to provide unreserved services - so legal information rather than legal advice - without the need for indemnity insurance would “lower consumer protection and exacerbate confusion”.

She argues that to vary protection dependent on whether a freelance solicitor is doing reserved and/or non-reserved work, so whether advising a client how to proceed or giving legal information to a client upon which they might make their own decision, will lead to consumer confusion and unjustifiable discrepancy in protection.

“It will lead to potential for arguments about what is reserved and non-reserved by insurance companies, as well as add more complexity to an already complex landscape. Ms Chambers said it was “vital” that freelance solicitors were adequately insured, whether or not they were providing reserved services. “There is simply no rationale for this inconsistent treatment of unreserved legal activities by solicitors depending on whether they undertake reserved activities. “We know that consumers have very little awareness of the difference between regulated and unregulated providers, let alone the varying protections that come with different service providers.” As explained above, this is exactly how mediation is dealt with and any advocate for a less adversarial family law system would already be mediating clients who do not seek to battle through their separation and would know this.

For the time being, the SRA is continuing to consult on this whilst the panel strongly disagrees with this transfer of risk and is concerned that the risk might be transferred to the consumer, who will be unable to access the Compensation Fund. The proposed insurance arrangements have already been strongly criticised by the Law Society.

At Cambridge Family Matters, we believe that the way forward is for the consumer to be educated, at the outset of their legal process, about the differing levels of service, from advice to information, and the consequent levels of risk, and fees. This would be something that legal advisers could ‘advise’ on. However it might then lead to lower billing targets if some clients then pay lower rates when they only need legal support or information. On the other hand, early advice with the prospect of lower subsequent fees might also cause more litigants in person to seek legal advice at the outset and not see their cases fail on account of too little information, usually too late. A brave new world from the SRA?