Not-for-profit groups should be allowed to charge for provision of legal services, the Legal Services Board has said.
The super-regulator wants the Solicitors Regulation Authority urgently to remove the current ban on charging.
In a response to the consultation on regulation of special bodies, the LSB said there was ‘no justification’ for the ban, particularly as the sector tries to find alternative funding following cuts to legal aid. The call will be welcomed by a large cross-section of the voluntary sector facing budget pressures.
Citizens Advice had told the consultation that the not-for-profit sector should be free to deliver paid-for advice to support free legal services and allow clients to access value-for-money legal advice.
CAB’s submission added: ‘The sector faces unprecedented pressure on funding and will need to explore all avenues to ensure that services are maintained. The sector has huge potential to innovate in order to provide services for its key client groups, who may be overlooked by more commercial providers as potential profit margins may be low.’
Solicitors pro bono group LawWorks said none of the advice clinics in its network would want to charge, as their primary purpose is to facilitate lawyers giving free advice to people who cannot afford it.
If the ban is lifted, it stated, there should be a proper process in place for the organisation to deal with these clients separately. The Law Society has also said clients of not-for-profit groups should have clarity regarding the nature of the services provided free and when other charges may be made.
Its response added: ‘Such charging is likely to change the culture of such bodies and may, over time, diminish the distinction between them and firms providing advice on a commercial basis.’
In its own response to the consultation, the SRA suggested the ability to charge individual consumers might introduce new risks. It called for further analysis of whether the introduction of charging would alter the ‘culture and incentives’ at work in organisations which have not charged up to now.
The SRA also flagged up problems regarding practitioners from not-for-profit groups charging for services while remaining unregulated.
The LSB today made clear that such groups providing reserved legal activities will not become licensed until at least April 2015. Statutory transitional protections for such bodies must remain in place for at least two years, because there is no regulator ready take on the role of regulating them.