Lawyers must display their prices more prominently so customers know what they will pay, the Competition and Markets Authority (CMA) has recommended in a highly critical report on legal services in the UK.

Fewer than 17% of solicitors’ firms and other legal providers publish a price list online, the report notes, leaving many clients in the dark about the costs they are likely to incur for even straightforward requests like making wills or dealing with court cases.

The study concludes: “The legal services sector is not working well for individual consumers and small businesses. [They] generally lack the experience and information needed to find their way around the legal services sector and to engage confidently with providers.

“Consumers find it hard to make informed choices because there is very little transparency about price, service and quality. This lack of transparency weakens competition between providers and means that some consumers do not obtain legal advice when they would benefit from it. Increasing transparency of price, service and quality is therefore essential for consumers to get a better deal.

“Regulators [should] develop new minimum standards for disclosures of price, service, redress and regulatory status, and require providers to adhere to them.”

Lawyers have traditionally charged by the hour, although such practices are gradually being replaced by fixed pricing deals. “While not all services may be amenable to a fixed price,” the CMA report says, “our analysis indicates that much more could be done to aid comparability.”

The price of a standard simple will ranges from around £110 to £200, the report notes; the price for a complex divorce with a dispute over assets may vary from around £1,260 to £3,000.

The CMA suggests developing comparison websites to allow customers to assess providers. It also recommends that the Ministry of Justice investigate whether to extend protection from existing redress schemes to customers using unauthorised providers.

Coinciding with the report, one price comparison website, the Law Superstore, claimed that British clients may have overpaid lawyers by nearly £500m in the last year, based on the wide price differentials for some basic legal services.

Rachel Merelie, acting executive director for markets and mergers at the CMA, said: “You might not need a lawyer very often but when you do it will often be at a crucial point in your life – whether that’s buying a property, resolving a dispute or getting expert advice on financial and employment matters. So the transparency, affordability and accessibility shortcomings we have identified are a real concern.”

Around £11-12bn a year is spent by consumers on legal services in England and Wales in areas that include commercial law, employment law, family law, conveyancing, wills and probate.

The Law Society, which represents solicitors in England and Wales, said a desire for greater competition and deregulation in the legal services sector should not be allowed to undermine consumer protection.

Its president, Robert Bourns, said: “The CMA’s decision not to conduct a market investigation into the legal sector is welcomed. However, it is astonishing that some of the CMA’s recommendations prioritise deregulation over consumer protection.

“If solicitors were to offer legal services from unregulated companies as suggested by the CMA, then their clients would no longer enjoy a raft of protections – from confidentiality to compensation – offered by every solicitor in a solicitor firm. These deregulatory changes would undermine consumer protections and erode trust in the legal system.”

Paul Philip, chief executive of the Solicitors Regulation Authority, said: “We welcome the final CMA report on its review of the legal market. I am pleased that the CMA has strongly endorsed our reform proposals , which will help to tackle unmet need and support members of the public and small businesses to access legal services.”