I joined the Legal Services Consumer Panel in April 2019 and immediately began to contribute to a Lawtech paper which was subsequently published in May 2019. That paper encouraged legal services regulators to be more proactive on Lawtech. The report emphasised the importance of responsive regulation, incentivising providers to innovate, and adequately protecting consumers.
We couldn’t have foreseen Covid-19, but our recommendations and calls were right for what we could see forthcoming; the growth in Lawtech. And now, with Covid-19, Lawtech and its regulation is arguably more important than ever. Most of us in one way or the other are relying on technology to meet the challenges Covid-19 presents. But even we resume normality, or close to it, our world would have changed with technology firmly entrenched in it. Lawtech will continue to support us beyond now. It is therefore more important than ever that legal regulators rise to the challenge.
Today the Legal Services Board published a compilation of perspectives which makes for an interesting read. I submitted my contribution to the LSB’s compilation a few months ago – the observations made in the article are even more relevant today (see below).
“How can legal services regulation support responsible technological innovation that improves access to justice?
The Legal Services Consumer Panel exists to ensure that the rights and interests of consumers are fully considered in the context of legal services regulation.
To that end, we published a discussion paper in May 2019 that sought to address some key questions around legal technology and to better understand its potential impact on consumers. We were particularly interested in understanding how effective regulation could ensure that emerging technology solutions put consumer principles at the heart of their products in a way that both enhanced the delivery of legal services, whilst also protecting the rights of service users.
As part of this work, we considered whether the current regulatory framework effectively supports the development of consumer-centric LawTech, and we did so by using the well-established Consumer Principles to explore the following:
- Access – Does current regulation support the widest possible range of access to consumers, including access to vulnerable consumers?
- Choice – Do consumers have a choice over whether to use LawTech-based services or not?
- Information – Does current regulation ensure there are clear transparency standards for the use of LawTech?
- Quality – Are LawTech services of sufficient quality?
- Fairness – Are the risk factors identified and addressed?
- Redress – Can consumers access redress when services go wrong?
- Representation – Do regulators provide guidance around consumers’ involvement in product development, testing and evaluation?
Our 2019 Tracker Survey found that the proportion of consumers who have their services delivered online has increased over the past eight years from 21% in 2011 to 33% in 2019, and we are in no doubt this a trend that is set to continue. This is only one small step towards the development of more technology-based service delivery.
And, with every step, the regulatory framework should be designed to maximise the opportunities and to mitigate the risks.
In terms of potential opportunities, these include (but are not limited to) improved access to justice, enhanced public legal education and better tailored legal services that deliver both positive consumer outcomes, and increased profitability for businesses.
Regulators could, – and we believe should, explore incentivizing providers to use LawTech to widen access to legal services.
On the other side of the coin, these new technologies do present risks for consumers, providers, and regulators; risks that can be mitigated if supported by a robust regulatory framework, as we will discuss later.
Consideration should also be given to the genuine accessibility of technology-reliant services. For example, the accessibility of these services for consumers in rural areas and areas with inadequate digital connectivity, as well as the accessibility of services for older people and consumers who may be less digitally engaged.
It may surprise you to learn that 9% of the UK population are considered to have no digital skills whatsoever, with a further 21% lacking basic digital skills. A recent government white paper also acknowledged that 70% of the UK population may be either “digital with assistance” or “digitally excluded”, a statistic that is certainly worth bearing in mind when discussing the future provision of legal services.
But, for those of us who can successfully engage with these new technologies, we are no doubt familiar with the emergence of AI and the unique challenges it provides regulators, in particular those challenges relating to transparency.
As a Panel, we have always recommended that providers using LawTech to deliver services should ensure that the data used to inform the algorithms that generate AI solutions are both traceable and auditable.
The challenge for AI-driven services is that, in many ways, technologies can reflect the worldview of their creators, and – like it or not – AI technologies may well have built-in biases which – when combined with hidden layers of complexity – can influence the outcomes of the service in ways that disadvantages certain consumers.
It is therefore crucial that providers can explain to consumers (in plain English!) how these services are delivered, including detail of how the algorithms used in the delivery of LawTech services arrive at their conclusions.
This presents a challenge to providers, but one that is critical to ensure consumers’ rights are protected, and that service users are empowered to make well-informed purchasing decisions. Transparency of this nature would also aid investigation by the regulators or the Legal Ombudsman when something goes awry.
To achieve this, we recommend that regulators consider a minimum set of regulatory guidance for LawTech providers, ensuring a high quality of both service and compliance from day one.
As a Panel, we believe that regulators should do more to take ownership of the LawTech agenda, regulating the market proactively instead of being reliant on a reactive, fire-fighting approach.
We would also encourage regulators to be considerate in their approach by avoiding a one size fits all approach to LawTech regulation, and to look to regulate solutions according to their level of risk.
Furthermore, it is our view that regulators should consider closer collaboration on developing guidance as a way of clearly setting out their expectations to providers. Without a common approach, there is a very real risk that individual regulators will act in isolation from one other, leading to a duplication of effort and confusion among providers and consumers.
Such guidance could also enhance confidence in LawTech services, thereby improving engagement from both consumers and legal service providers, leading to further investment in the sector and benefitting the LawTech ecosystem as a whole.
The experience of other sectors (such as the financial services and healthcare sectors) suggests that regulators need to open themselves up to external influence where appropriate. What that means is that regulators must engage with potential entrants much more deeply, and rethink how they regulate, rather than simply extrapolate from their existing toolkit.
One oft-cited example of good practice in a similar field is the Financial Conduct Authority (FCA), which has issued detailed and technological-specific guidance to clarify its expectations from providers using financial technology.
That type of regulatory clarity gives investors, entrepreneurs, and legal service providers the confidence they need to drive forward and allow these potential benefits to be realised in a way that works for everyone: service providers, regulators, and – crucially – consumers.