The legal consumer watchdog has warned of a risk that clients may be overwhelmed with information if regulators overdo the current transparency drive.  

The Legal Services Consumer Panel said recommendations for greater transparency by the Competition and Markets Authority have the potential for a ‘long-lasting and positive impact’.

Under these recommendations the Solicitors Regulation Authority may compel firms to publish information about their disciplinary history and costs. The regulator has spoken of the legal sector’s need to follow data-sharing trends in the financial and energy industries.

The consumer panel this week published evidence in response to the CMA report and said now is an ideal time for regulators to adopt what it called ‘smarter communication measures’ for implementing the recommendations.

Panel chair Dr Jane Martin said: ‘We know that information can empower consumers and encourage them to make informed decisions, and that this is good for competition.

‘We also know that information remedies are only effective when they meet certain criteria such as being simply presented, easily accessible, provided at the time of need, and tested.’

The panel said regulators should consider the level of risk and the ability of consumers to understand the significance of the information, before obliging firms to disclose factors such as costs and service quality.

It warned of ‘information overload’ if the data is not given at the right time, the right place and for the intended consumer groups.

The panel added: ‘Too much information can make decision-making worse. Regulators should work hard not to create a risk that firms, and even themselves, adopt a tick-box approach to their disclosure regimes.’

Evidence gathered by the panel suggested it was difficult to predict how consumers will respond to extra information, and regulators have to ensure certain groups of consumers are not left behind.

But it identified an ‘imbalance of information’ between providers of services and consumers, further complicated by the often distressed nature of legal services purchases.