The Government plans to open up the probate market in full to non-lawyers. But solicitors say that equal access should mean equal regulation. Mark Smulian weighs up the arguments

Richard Grosberg perhaps has the answer to those who doubt the value of lobbying government departments over controversial professional issues.


When the immediate past chairman of the Law Society’s probate section went to the Department for Constitutional Affairs (DCA) on 4 October to discuss its plans to allow non-lawyers to provide all probate services, he expected little to have shifted in its stance (see [2004] Gazette, 23 September, 1).

Instead, he found what might prove a substantial change, the implications of which are still not completely clear.


The DCA announced in the summer of 2003 that it intended to remove the restriction that permits only solicitors, barristers and notaries public to be paid to prepare papers for grant of probate or letters of administration.


While seeking grants of representation in itself may be relatively small business, it often opens the path to the higher-value work of estate administration.


Solicitors might have been less than overjoyed at losing their privileged position, but they could hardly argue against increased competition.


However, they were concerned that the wording of the Courts and Legal Services Act 1990 would not allow adequate regulation of new entrants to this market. Section 54 allows banks, building societies and insurers to carry out all probate work and section 55 allows the DCA to authorise other professional bodies to approve their members for grant work.


The problem arose over who would regulate these entrants beyond the grant of representation stage; indeed, there was doubt that the Act allowed this to be done, let alone to the level of regulation under which solicitors work.


Mr Grosberg, a wills and probate partner at Nottingham firm Nelsons, explains: ‘Our view was that we do not have a problem with competition but our concern was that the legislation proposed to implement sections 54 and 55 would allow others to be regulated only over grants of representation.


Benstock: warning of hidden charges‘It didn’t address what will happen when they carry on to deal with estate administration and there was no power to extend the regulations to do that.’

The issue is one of consumer protection, he says, because ‘problems are most likely to arise not in grants of representation but when someone is handling large amounts of other people’s money’.


Mr Grosberg also contended that it was ‘inconsistent’ of the DCA to press through such a major change before Sir David Clementi’s review of legal services regulation has even reported.


Armed with these concerns, he approached what he expected would be an unproductive meeting with the DCA.


Rather to his surprise, he was told that it now took the view that the definition of probate in the Act did include estate administration as well as grants, ‘and no one had anticipated that,’ he says. ‘Everyone assumed it meant only applications for representation.’


However, this apparent breakthrough for the profession produced a further raft of complications. Mr Grosberg says: ‘The Legal Services Ombudsman (LSO) was to have jurisdiction over probate on the basis that there would be little to do but grants of representation. But now it could be the whole gamut, and [Zahida Manzoor] may be unwilling to take that on.’


He also suggests that banks, insurers, building societies and so on that use section 54 may employ solicitors’ firms that do no other work and are, in effect, in-house. If, as a result, these institutions’ work comes under the auspices of the Law Society and ultimately the LSO, ‘I doubt they will like that’.


There also appeared to be an issue over what would happen if, for example, a member of the public objected to the conduct of a licensed conveyancer who did probate work.


While that profession’s own complaints scheme would deal with it initially, where would such a complaint go from there?


‘There could be a regulatory gap since neither the LSO nor the Financial Services Authority wants this work,’ he says.


Mr Grosberg says the DCA’s change of position is welcome but it remains unclear exactly how these issues will pan out.


Assuming solicitors do face competition for probate work, what would be the effect? According to the DCA, grants of representation were issued in 272,328 non-contentious cases last year, and there were a further 117 contentious cases. Grant of representation work are estimated to be worth around £40 million to solicitors; estate administration work is valued at £400 million.


Helen Clarke, who represents the probate section on the Law Society Council, says: ‘Our concern is to ensure that anyone who takes on this work is regulated to the same level that we are. The real issue is consumer protection.


‘Elderly people who have recently been bereaved need to know whether the organisation which is handling the probate has proper safeguards, and when people are in a state of distress after a bereavement it is unrealistic to expect them to question people about whether they are insured and authorised.’


She is also concerned about the degree of control over estate administration, since even if nothing improper took place, non-lawyer probate practitioners would face ‘a temptation to, for example, cross-sell investment products’, to possibly vulnerable clients.


Mr Grosberg says it is ‘extremely difficult to get an idea of what the profession should do’ to encourage the public to continue to use solicitors rather than other, perhaps cheaper, providers.


He says: ‘We want to highlight the advantage of using a lawyer, but cash is the key and others will seek to do it cheaper. We need to raise our profile, but that has to be done collectively rather than individually.’


Alan Benstock, senior partner at Probates Direct – a division of the Lister Croft Partnership in Leeds – agrees. ‘We must tell the public to see a solicitor because they are regulated and insured, and others may not be.’


He thinks new entrants may offer what appear to be cheaper services but ‘it will all be in the hidden charges, which is what happened with wills. If the initial service is cheap and cheerful, there will be hidden charges added.’


One potential new entrant to the market is already limbering up – the Institute of Legal Executives. Its head of professional development and regulation, Ian Watson, says: ‘We decided to pursue this for our members and we are still waiting to see what the regulations might look like. Around 12-15% of members specialise in probate, so it is potentially a significant market, but it depends how many would wish to work outside the solicitors’ branch and how complex the regulations prove to be.’


Mr Watson insists there would be no point in opening the market to competition unless different charges for different levels of service followed, perhaps based on the size of estates or the complexity of the case in question.


Legal executives can do all the work up to application for grant of probate, Mr Watson says, and therefore handling grants of representation should not pose any issue of a skills or training gap for them. He says. ‘We would regulate our members and we would offer a regulatory service backed up by a compensation scheme.’


The DCA declined to elaborate of any change of heart, but its initial argument in 2003 for opening probate to competition noted: ‘It would encourage new providers to enter the market, applying upward pressure on the quality of service and downward pressure on prices.’


To calm fears, the report also estimated that solicitors would lose no more than 8% of the probate market in the decade after deregulation, although for some that raises the question of why this is worth doing in the first place. It made a comparison with licensed conveyancers, who have secured only 5% by value of the market since 1987 when the first licences were issued.


But they also heralded increased competition between providers: between 1989 and 1998, legal fees for conveying a £65,000 property fell by 25% and ‘this may taken as some indication of how prices might be expected to fall in the market for probate and related services’, the report said.


In these days of promoting competition, there seems little doubt that probate solicitors are going to find themselves fighting against new entrants for clients. The challenge now is how they go about marketing their services and making a case for the public to stick with them.


Mark Smulian is a freelance journalist