Legal Opinion: Consumers

The Government recognises the importance of protecting vulnerable and elderly consumers from harm when purchasing complex legal products. This includes Family Protection Trusts, also known as Asset Protection Trusts, which are a form of Discretionary Trust or Interest in Possession Trust.

The legal profession in England and Wales, together with its regulators, operates independently of Government. Responsibility for regulating the sector sits with approved regulators, overseen by the Legal Services Board. The Solicitors Regulation Authority (SRA) is responsible for regulating the professional conduct of solicitors and most law firms in England and Wales. The SRA’s standards and guidance require solicitors to act in clients’ best interests and to take particular care where clients may be vulnerable, including considering capacity and the appropriateness of taking instructions.

Since 2021, the SRA has continued to strengthen its risk-based, proactive approach to identifying and addressing consumer harm, including where clients may be vulnerable. For example, alongside work to improve how it uses data and intelligence to spot risks more swiftly, it has:

• published research on consumer vulnerability in the legal market, including how vulnerability might be measured and monitored, which is available here: https://www.sra.org.uk/sra/research-publications/consumer-vulnerability-legal-market/;
• provided tailored information and support for vulnerable consumers on engaging with legal services and raising concerns, which is available here: https://www.sra.org.uk/vulnerable-consumers/; and
• launched a consumer protection review, which includes consideration of vulnerability, further details of which are here: https://www.sra.org.uk/home/hot-topics/consumer-protection-review/.

The Financial Conduct Authority also issued a warning about Asset Protection Trust Schemes in April 2023 specifically advising anyone considering entering such a scheme to seek independent legal advice to ensure that the Trust will actually work to deliver the intended protection of assets, as well as independent financial advice to validate any proposed strategy for investing assets before agreeing to put any money, property or assets into such a Trust scheme.