Offering services on a ‘no win, no fee’ basis can make lawyers appear more approachable and honest, new research has found – but the ‘ambulance chaser’ tag has harmed consumer trust.
The Legal Services Board study into why consumers use and trust lawyers (and why they do not), conducted by Optimisa Research, found overall that while lawyers are respected for their knowledge and expertise, the way the service is delivered damages trust.
Based on focus groups and in-depth interviews, it said the increase in ‘no win, no fee’ legal practices – and more recently the push into reclaiming payment protection insurance – have brought the profession closer to the general consumer and have had an impact on the perception of lawyers.
“People tend to consider lawyers in two different categories: ‘traditional’ and ‘no win, no fee’,” the research said, “the former being more formal in their approach and appearance, highly professional but costly and less accessible in terms of both location and language used.
“The latter category is considered to be less formal, less experienced but more accessible in terms of cost, language and location (often perceived to be available over the telephone).
“In addition, although these types of lawyers are felt to have less breadth of experience, it is felt that they are probably best placed to deal with the types of issues that they offer their services for as they will be ‘churning’ these types of straightforward case on a regular basis, so in essence are more experienced.”
Less positively, the research said that while specialism is an area that generally fosters consumers’ trust in lawyers, “there is little doubt that the increase in firms specialising in personal accident claims – ‘ambulance chasers’ – are having a negative impact on perceptions of the profession as a whole.
“While many perceive these firms as call centres rather than law firms, some assume a degree of legal involvement – ‘not very well qualified, money grabbing’ lawyers – operating in the background.
“While it could be argued that this creates an image problem rather than an issue of trust, there is a widely held belief that these organisations have damaged the integrity of the legal profession. It is this perceived lack of integrity that impacts negatively on trust.”
Nonetheless, the research uncovered “some evidence, albeit among a minority”, of a positive perception towards some of these firms as a result of their ‘no win, no fee’ operating model.
For these people – especially those in lower socio-economic groups – “such organisations are seen as more approachable, more interested and engaged in individual cases, and more ‘honest’ in their approach.
“For those who find the cost of legal advice prohibitive, they provide a way of accessing legal support without the need for upfront fees. Although many are concerned about the level of fees retained in ‘no win, no fee’ cases, there is a sense of transparency that is often perceived to be missing in more traditional firms.”
Meanwhile, another survey – this time of 300 personal injury firms in the north-west by Liverpool law firm O’Connors – has found that now after-the-event insurance premiums are payable by claimants, more than half of firms have seen a fall in take-up. For 30% of respondents, take-up has dropped by more than a half, with a further 23% saying it had fallen by a smaller amount.
A report on the rest of the survey – looking at the impact of the 1 April reforms on PI firms – can be found on Legal Futures here.