Complaints and the Legal Ombudsman

How the Legal Ombudsman will approach resolving complaints

From 6 October 2010 the Legal Ombudsman will play a significant role in resolving complaints about legal service, and solicitors must tell their clients about the right to complain.

The Legal Ombudsman has stated that they will take a different approach to resolving complaints from their predecessors but what will this mean in practice? The guide we have set out provides a summary of the rules under which the Legal Ombudsman will handle complaints, the remedies available to it and the fee it will charge for handling complaints. This guide is based on the Legal Ombudsman’s scheme rules.

Practitioners may feel that the new approach does not appear to be very different from the Legal Complaints Service’s current approach. However, there are some differences. The new scheme will deal with all public complaints across the entire legal sector – so not only solicitors. As a lay organisation its role is to be expert in resolving complaints, not to be expert in the law. As an independent body, it is hoped that the new Ombudsman scheme will be an effective service that adds to the credibility of the profession and gives clients confidence in the service they receive from lawyers. The emphasis of the new arrangements will be on speed and informality, with the goal of resolving complaints by agreement rather than a quasi-judicial process. If agreed resolution is not possible, one of the team of eight ombudsmen will make a decision, a decision which, once accepted by the complainant, is legally binding on both sides. But that decision will not be based on legal precedent or regulation but on a judgement based on what is fair and reasonable in the circumstances of that case, as required by the Legal Services Act 2010.

What is a complaint?

The Legal Ombudsman defines a complaint as an expression of dissatisfaction with a service.

To come within the jurisdiction of the Legal Ombudsman, the complaint must relate to an act or omission about a service which an authorised person, or their employee, provided to:

• the complainant or
• another authorised person who procured the service on behalf of the complainant or
• a personal representative / trustee where the complainant is a beneficiary of the trust / estate.

The Legal Ombudsman can consider complaints which come within the definition above even if they also possibly amount to an accusation of professional negligence.

The term “authorised person” on this page means the person providing legal services.

Who can complain?

The Legal Ombudsman will accept complaints from individuals and small businesses, charities, clubs, societies, associations and trusts.

Where a complainant who has referred a complaint to the Legal Ombudsman is no longer able to pursue it, the complaint can be continued by certain people such as those with lasting power of attorney or the executor of the complainant’s will. The Legal Ombudsman will also consider complaints from personal representatives or residuary beneficiaries of a person, who dies before they could refer their complaint to the Legal Ombudsman.

The Legal Ombudsman will not consider complaints that were considered by a previous complaints handling organisation such as the Legal Complaints Service unless new evidence has come to light that might affect the outcome.

When can you complain?

Complainants must normally try to resolve their complaint via a firm’s complaints handling process before they can refer it to the Legal Ombudsman. However, if a firm takes more than eight weeks to resolve a complaint, than a complainant may refer it to the Legal Ombudsman without waiting for the firm’s final response.

Ordinarily a complainant must refer the complaint to the Legal Ombudsman within six months from them receiving a written response to the complaint from the firm as long as the response includes, prominently, the following details:

• that they may go to the Legal Ombudsman if they are dissatisfied with the response
• the contact details of the Legal Ombudsman and a warning that they must refer the complaint within six months.

Normally complainants must refer a complaint to the Legal Ombudsman within a year from the act/omission occurring or from when they should have reasonably known it had occurred. However, the ombudsman has the discretion to accept complaints outside of the time limits in exceptional circumstances.

The Ombudsman’s discretion

In addition to the Ombudsman discretion to waive the time limits described above, there are some other areas of discretion that may be employed. If an authorised person does not believe that a complaint made against them falls under the Legal Ombudsman’s jurisdiction, is out of time, or falls under the reasons for dismissal set out in the rules then they may inform the ombudsman of this. Both the authorised person and the complainant will then be given the opportunity to make representations before the ombudsman decides whether they are able to consider the complaint.

The Ombudsman has listed situations to illustrate why they might exercise their discretion. However, the most relevant to solicitors is likely to be dismissal where an authorised person has offered fair and reasonable redress to the client and the offer is still open. If a solicitor has done this then an ombudsman may dismiss the complaint and the solicitor will not be required to pay a case fee.

How the Ombudsman will resolve complaints

The Legal Ombudsman has stated that it wishes to resolve complaints at the earliest stage possible.

The first stage in the process will normally be an attempt to resolve the complaint informally. If this is not possible the Legal Ombudsman will investigate the complaint, ensuring that both parties have a chance to make representations.

The Legal Ombudsman will then provide parties with their provisional decision (assessment) and both parties will have a chance to respond within a fixed deadline. If neither party indicates disagreement with the decision then the Legal Ombudsman can treat the complaint as resolved.

If the provisional decision is not agreed, an ombudsman will make a final decision based on what is fair and reasonable in all the circumstances of the case. When considering what is fair and reasonable the ombudsman will take into account, amongst other considerations, –

• the decision a court might make;
• the relevant Code of Conduct rules;
• good practice.

The complainant will be asked to accept the determination and, if the complainant does so, it will become final and binding on all parties. Neither party may then start or continue legal proceedings in respect of the complaint. If the complainant rejects the determination (or it is treated as such due to non response) then the legal rights of both parties are unaffected.

Evidence

An ombudsman has the power to require information, that he or she considers necessary to make a determination from either party. The ombudsman can consider a wide range of evidence including evidence from approved regulators, third parties and evidence given in confidence where it is reasonable and necessary to do so.

The Legal Ombudsman has indicated that its investigators will normally consider a solicitor’s file on the complaint e.g. the record that has been kept about how the complaint was been handled. It will therefore be important that solicitors ensure that they keep accurate and thorough files on each complaint they receive.

Failing to cooperate with the Ombudsman

The Code of Conduct requires that solicitors cooperate with the Legal Ombudsman. If a solicitor does not cooperate with the Legal Ombudsman, then an ombudsman may inform the Solicitors Regulation Authority of this. Where either party fails to comply with a deadline then the ombudsman may:

• proceed with the investigation, consideration or determination
• draw inferences from the failure
• if the failure is on the part of the complainant, dismiss the complaint
• if the failure is on the part of the authorised person include compensation for any inconvenience caused to the complainant in any award made.

Remedies available to the Ombudsman

Where the ombudsman finds in favour of the complainant, the ombudsman may require a solicitor to do any of the following:

• apologise;
• pay compensation of a specified amount for loss suffered;
• pay interest on that compensation from a specified time;
• pay compensation of a specified amount for inconvenience/ distress caused;
• ensure (and pay for) putting right any specified error, omission or other deficiency;
• take (and pay for) any specified action in the interests of the complainant;
• pay a specified amount for costs the complainant incurred in pursuing the complaint and/or
• limit fees to a specified amount.

There is a limit of £30,000 on the total value that can be awarded in respect of:

• compensation
• the cost of putting right any errors and
• the cost of any specified action carried out in the interests of a complainant.

However, this limit does not apply to awards relating to interest on compensation, costs incurred by the complainant in pursuing the complaint, the limitation of fees and the interest on fees to be refunded. Thus the cost could be higher than £30,000. However, it should be noted that complainants will not normally require assistance to pursue a complaint with the Legal Ombudsman and therefore awards of costs are likely to be rare.

The Ombudsman may also report any suspected misconduct on the part of a solicitor to the Solicitors Regulation Authority.

Enforcement of a determination

A final determination can be enforced through the High Court by the complainant or by an ombudsman if the complainant agrees. A Court that makes an enforcement order against a solicitor must inform the Solicitors Regulation Authority.

Fees

Unless a complaint is outside of the Legal Ombudsman’s jurisdiction or is dismissed or discontinued under paragraph 5.7 of the rules a case fee is potentially payable. There will be no charge for first two potentially chargeable cases brought against a firm. Thereafter there will be a £400 charge unless the complaint was:

• withdrawn or abandoned or
• resolved or determined in favour of the solicitor

and the ombudsman was satisfied that the solicitor took all reasonable steps to try and resolve the complaint under their in-house complaints procedure.

Contact details

From 6 October, you can contact the Legal Ombudsman as below:

Legal Ombudsman,
PO Box 15870
Birmingham
B30 9EB

Website – www.legalombudsman.org.uk
Tel – 0300 555 0333
E-mail – enquiries@legalombudsman.org.uk

The BBC ran a report on 7 October 2010 in the following terms:

Lawyers who bring the industry into disrepute by charging huge prices for services will no longer get away with it, the new Legal Ombudsman has said.

The independent service for complaints about lawyers in England and Wales starts its work on Tuesday.

Chief Ombudsman Adam Sampson said he would crack down on those lawyers who choose profit over good service.

But consumer group Which? said the new body’s powers, including awarding up to £30,000 compensation, were not enough.

Mr Sampson said: “One of our important jobs is to help protect the vast majority of lawyers who really want to do a good job from the small number of lawyers who are in it from bad motives and who can bring down the reputation of the profession as a whole.”

‘Name and shame’

Mr Sampson called the previous system of complaints “bewildering and very inefficient”.

He said the industry’s Legal Complaints Service and previous bodies had had a “woeful record” on the handling of complaints.

However, Martyn Hocking, editor of Which?, said: “The Legal Ombudsman has a cap on the amount of compensation it can force solicitors to pay back of £30,000. It’s questionable whether that is high enough.”

He also called on the Ombudsman to “name and shame” by publishing complaints data, as the Financial Ombudsman has recently started doing after years of lobbying.

Mr Hocking said: “The Legal Ombudsman needs to be able to collate that data and definitely needs to be able to name and shame.”

The Legal Ombudsman predicts it will deal with more than 100,000 cases a year.

The body was set up under the Legal Services Act 2007 to simplify the system and make sure consumers had access to an independent expert to resolve complaints.

The BBC report is available at http://www.bbc.co.uk/news/uk-11473197

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