Key concepts

When does consumer law apply? You will need to consider your obligations under consumer law in relation to all your engagement, or potential engagement, with consumers. In particular, the application of consumer law is not limited to situations where you have been formally instructed by a consumer; crucially, it also applies in your dealings with consumers prior to any formal arrangement with them and in your dealings with potential consumer clients (even where they do not ultimately become your client).¹For example, consumer law will apply to general promotional material aimed at potential consumer clients.

Who is a consumer? For the purposes of this guidance, a consumer is an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession. It is important to be aware that this includes individuals who are funded by legal aid and individuals you are advising on a pro bono basis. Note that while there is significant overlap between consumers and those who can complain to the Legal Ombudsman, the definition of a “complainant” under the Legal Ombudsman Scheme Rules is broader than the definition of a “consumer” under consumer law.²In addition to private individuals, the Legal Ombudsman’s definition includes micro-enterprises, charities, clubs, associations or societies with an annual income of less than £1m, and trustees of a trust with a net value of less than £1m (but excluding regulated lawyers and law firms).

Vulnerable consumers. As further set out in this guidance, when considering the steps you should be taking to ensure consumer law compliance you will need to take into account the extent to which your consumer clients (or potential clients) may be vulnerable. As the Legal Services Consumer Panel has observed, the very nature of the legal services being provided may lead to consumer vulnerabilities, for example because:

• there is a big knowledge gap between members of the public and legal professionals;
• people often need legal advice when they are experiencing stressful difficulties;
• it can be hard for people to judge the quality of legal services, even after they have received them.

However, the position is even more acute where your practice is focused on consumers who may be particularly vulnerable – such as those who have suffered personal injury or been the victim of clinical negligence – or where a particular commercial practice (such as the publication of an advertisement) is aimed at a specific group of vulnerable consumers.

Who is responsible for consumer law compliance? Consumer law places legal obligations on traders that interact with consumers. In this context, a trader is a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf. Accordingly, in many cases it will be your firm who will be held to account for any consumer law breaches, although where you are acting in your own name (for example, as a sole practitioner) you may be personally responsible for any consumer law infringements.

However, even where ultimate responsibility rests with your firm, each individual Costs Lawyer has an important role to play in ensuring consumer law compliance. In particular, this is because:

• your actions can lead directly to liability attaching to your firm, for example because your actions cause your firm to be in breach of contract or the statements you make mislead consumers;
• you may face regulatory action by the CLSB where you are responsible for causing your firm to be non-compliant with its consumer law obligations, for example if this constitutes a breach of the Code of Conduct.

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