Overview
It is important that you provide clients (and potential clients) with the information they need, at the time they need it and in a format that is clear and easy to understand. This is to help ensure consumers are in a position to make informed decisions when dealing with you and your firm, and it puts you in the best position to avoid infringing consumer law.
Ask yourself: Are you providing consumers with:
– the right information
– at the right time
– in the right format?
If you fail to ensure that the information you provide to consumers is accurate and does not contain false information, you are at significant risk of breaching consumer law. Similarly, you may infringe the law if the information, or its overall presentation, in any way deceives or is likely to deceive potential or current clients (even if that information is factually correct).1Consumer Protection from Unfair Trading Regulations 2008, regulation 5. Particular care should be taken in relation to information concerning your fees, your firm and the nature of the services being provided.
These obligations apply in relation to all your interactions with consumers including, for example, adverts, website content and marketing materials. They can also apply when dealing with individual consumers.2Note that where the information is being provided to consumers in a format that falls within the ASA’s jurisdiction (for example, in adverts or on your website), the ASA may take action in relation to the provision of misleading information or the failure to provide material information properly.
While this section of the guidance focuses on your consumer law obligations, you will note the many similarities with your broader regulatory obligations.3See, for example, paragraph 4.6 of the Code of Conduct which states: “You must ensure your client is able to make informed decisions about the work being undertaken on their behalf throughout the lifetime of a matter, including how it will be priced, the costs incurred and the likely overall cost of the mater (including any potential liability for the costs of other parties)”. However, it is important to note that compliance with our regulatory rules does not guarantee your compliance with consumer law. Neither does compliance with consumer law ensure broader regulatory compliance.
Misleading by omission – in more detail
You are likely to infringe consumer law if the information you provide to consumers omits or hides material information.4Consumer Protection from Unfair Trading Regulations 2008, regulation 6. Similarly, if you provide material information in a manner which is unclear, unintelligible, ambiguous or untimely, you are likely to infringe consumer law.5Consumer Protection from Unfair Trading Regulations 2008, regulation 6.
What do you mean by “untimely”? This will change depending on the information. Some information needs to be provided much earlier in your engagement with consumers than others. It may be useful to ask yourself whether your clients might make a different decision (for example, to shop around) if you provided certain information earlier. If the answer is yes, or maybe, there is a good chance you need to provide that information earlier in order for it to be timely.
Material information is information that the average consumer6See Annex 2, paragraph 5 for further information on who the average consumer is for these purposes. needs – in the relevant circumstances – to take an informed transactional decision,7See Annex 2, paragraph 5 for the full definition, but this is a broad concept and includes the decisions a consumer takes in relation to whether, how and on what terms to purchase a product. This can also include decisions leading up to a decision to purchase (or a decision not to purchase) a product. such as whether to instruct you or your firm, or whether certain services you offer are right for them. It is an intentionally broad concept and may vary from one firm to another depending on the services being offered to consumers and how they are offered to them. Accordingly, you should take care to consider what information your clients are likely to need based on how you are interacting with them, and you should be conscious of how your clients are likely to interpret the information you provide them with.
How do I know if information is material? It can be helpful to ask yourself whether your clients might make a different decision (for example, in relation to the services they instruct you to provide) if you told them a certain bit of information. If the answer is yes, or maybe, then there is a good chance that information would be considered material.
Our Guidance Note on Price Transparency (through websites and promotional material) contains further information and guidance in this regard.
In particular, you need to bear in mind that the average consumer you are dealing with is likely to be less familiar with legal processes, terminology and the services you provide than professional clients and so is likely to need different information presented in a more digestible form.
If your practice is focused on vulnerable consumers, adjustments will be necessary to reflect those vulnerabilities.8See Annex 2, paragraph 5 for further information. For these purposes, care is needed especially where consumers may be vulnerable, for example, because they are elderly or mentally or physically infirm. There is a heightened risk of infringing consumer law when a particular commercial practice (such as the publication of an advertisement) is aimed at a specific group of vulnerable consumers, and their vulnerabilities are not properly taken into account.
In all situations we would expect consumers to receive the following information in a timely manner:
- Key information about the services being offered or to be provided by you/your firm, including details of the proposed timeframes for the work.9For example, where the work is to be completed in stages, it may be helpful to set out those stages. Remember that the client might not understand what the key stages are so you may need to explain them in simple language. This would normally be expected to be tailored to the individual case, rather than being generic.
- The total price for the services (including all taxes), or where the total price is not known at the outset, how the price will be calculated10For example, including hourly rates (by grade of staff where applicable). together with a genuine estimate of the likely total cost to the consumer.
- Whether (and if so, when) any additional charges (such as disbursements) are to be incurred and, where these are known, what such charges will be. Again, where they are not known, you should explain how such charges will be calculated and provide a genuine estimate of the likely additional charges.
- Your firm’s name (and trading name if different) and your contact details, including your postal address and telephone number.
- Any information that is required to be provided to clients under the CLSB’s regulatory rules or other regulatory requirements that apply to you.
- Details of your complaint handling procedure.
What do you mean by the total price? Where you cannot say in advance what your total fees will be, you should consider whether providing an indicative cost of your services would be helpful. This could be a range of likely total costs. You might also choose to provide a typical or average cost for the type of service, particularly if the range is quite large. If feasible, consider providing an indicative number of hours or a range of hours needed for different services. If the price is by stage, then it might be helpful to provide details on that basis. However, if it would not be obvious to a consumer what a stage of the service is, you will likely need to provide a simple explanation.
Examples of misleading information
1. If your advert states you’re a signatory to a code of conduct, it may be misleading if you do not adhere to the standards set out in that code. | 2. If your advert suggests that your firm, rather than you as an individual, is regulated by the CLSB this may be misleading, particularly if some costs advisers in your firm are not regulated. |
3. If your promotional material encourages consumers to engage your services, but fails to mention that there are certain cases you will not take on, that may be material information and its omission may be misleading. | 4. You should inform clients if anything that could reasonably be expected to be included in your stated fees is not. A failure to do so could be misleading and a breach of consumer law. |
5. If you offer conditional fee agreements (CFAs) but fail to set out the circumstances in which clients might have to make any payments themselves, such as disbursements, this may be misleading. | 6. If the type of service you are promoting involves a risk that the client will have to pay costs to the other side, you should indicate this and make it clear that this is additional to your fees, or this could be misleading.If the type of service you are promoting involves a risk that the client will have to pay costs to the other side, you should indicate this and make it clear that this is additional to your fees, or this could be misleading. |
7. If you provide your client with average timescales for dealing with different types of matters to indicate how long the work may take, but do not explain why this might not apply in their case, this could be misleading, especially where there is a material risk of not meeting the indicated average timeframes. |
- 1Consumer Protection from Unfair Trading Regulations 2008, regulation 5.
- 2Note that where the information is being provided to consumers in a format that falls within the ASA’s jurisdiction (for example, in adverts or on your website), the ASA may take action in relation to the provision of misleading information or the failure to provide material information properly.
- 3See, for example, paragraph 4.6 of the Code of Conduct which states: “You must ensure your client is able to make informed decisions about the work being undertaken on their behalf throughout the lifetime of a matter, including how it will be priced, the costs incurred and the likely overall cost of the mater (including any potential liability for the costs of other parties)”.
- 4Consumer Protection from Unfair Trading Regulations 2008, regulation 6.
- 5Consumer Protection from Unfair Trading Regulations 2008, regulation 6.
- 6See Annex 2, paragraph 5 for further information on who the average consumer is for these purposes.
- 7See Annex 2, paragraph 5 for the full definition, but this is a broad concept and includes the decisions a consumer takes in relation to whether, how and on what terms to purchase a product. This can also include decisions leading up to a decision to purchase (or a decision not to purchase) a product.
- 8See Annex 2, paragraph 5 for further information.
- 9For example, where the work is to be completed in stages, it may be helpful to set out those stages. Remember that the client might not understand what the key stages are so you may need to explain them in simple language.
- 10For example, including hourly rates (by grade of staff where applicable).