Brian O'Neill

This guidance came out of a 2016 Competitions and Markets Authority report into the workings of the legal services market in England and Wales – a market that’s very different from the Scottish legal market. The Law Society of Scotland picked up on this report, published a consultation in May 2018 and, subsequently, the regulation committee of the society published the guidance. It would be fair to say that this has, perhaps, been under the radar for many solicitors. Firms should now be working towards publishing their price transparency information – their fees and outlays for “consumer-facing” types of legal work. This affects pretty much every high street law firm that doesn’t rely solely on legal aid or commercial and corporate work.

There is, however, something of an anomaly in the guidance – the requirement to publish estate agency fees. As those solicitors who deliver estate agency services are all too aware, non-solicitor estate agents are extremely “competitive” and will go to great lengths to win business. The requirement on solicitors to publish estate agency fees means that when competing for business their fees will be available, not only to the potential client, but also the competing non-solicitor estate agent. There is every likelihood that non-solicitor estate agents will use that information to undercut solicitor estate agents whenever possible.

Now, if the Competitions and Markets Authority were seeking to give consumers information on estate agency fees, then they would surely have conducted a study into that market. They didn’t. They conducted a study into the legal services market. The fact that some solicitors also provide estate agency services – a “non-legal” service - it makes it a nonsense to instruct solicitors to publish their fees for this type of work just because they’re solicitors. Especially as non-solicitor estate agents are not required to do any such thing!

If the purpose of the guidance is to encourage competition in the legal services market, the society, in its guidance, has tipped the playing field against solicitors who provide estate agency services. One wonders if anyone in the society thought this through. Did anyone think to contact the Competitions and Markets Authority and suggest to them that if solicitors have to publish estate agency fees then surely non-solicitors who carry out estate agency work should also be required to publish their fees too?

Let’s be blunt. Estate agency services aren’t legal services. They’re marketing services provided by solicitors as well as non-solicitors. You need no qualifications to be an estate agent. There is no formal regulatory body that governs non-solicitor estate agents. However, simply because a solicitor provides the “non-legal” estate agency service, the Law Society of Scotland, through this anti-competitive guidance, has put solicitors at a considerable disadvantage.

If you look at, say, Slater Hogg and Howison’s website, you’ll find no mention of fees. You will see a page entitled “conveyancing” where they proclaim the benefits of using the “Slater Hogg Conveyancing Service”. They talk about fixed fees being guaranteed and say “Our recommended solicitors will not charge additional fees for letters and phone calls” but they are under no obligation to publish what these fees are – and it’s unlikely they ever will.

So, there we have it. Non-solicitor estate agents do not have to publish their fees and other costs. They can even discuss conveyancing fees – without having to publish any figures. Solicitors, on the other hand, need not only to publish their estate agency fees but also the associated estate agency costs.

There has been a resurgence in non-solicitor estate agents in the West of Scotland following the demise of the Glasgow Solicitors Property Centre. The requirement for solicitors to publish their estate agency fees could be a fatal blow to solicitor estate agents across Scotland.

Perhaps there is a small chink of light in all of this and it is this. The guidance states “In the event of a complaint being raised in relation to the guidance, a solicitor would have to provide a reason for not following it”. Perhaps a very good reason for not following the guidance when it comes to estate agency fees is that it would be giving non-solicitor estate agents an unfair advantage. This is a judgement call that some solicitor estate agents might be willing to make.

Brian O’Neill is a director at Client Communications Ltd, a former solicitor and was one of the founding directors of Glasgow Solicitors Property Centre.