The government has admitted for the first time that primary legislation will be needed to bring claims management complaints within the remit of the Legal Ombudsman, meaning that it will not happen this year as scheduled. 

The Ministry of Justice announced in August 2012 that it wanted the ombudsman to handle complaints about CMCs.

Since then, there have been few developments as the MoJ, Treasury and Legal Ombudsman negotiated how the scheme will work and be funded.

In July, the Gazette reported that the MoJ’s plans to enable the change by the end of 2013 were in serious doubt.

Justice minister Helen Grant (pictured) has now admitted in response to a written commons question that further delays will put it back to at least 2014.

‘We were aiming to do this by the end of 2013,’ she said.

‘However, in order to ensure that the Office for Legal Complaints’ costs are recovered from the claims management companies and not the wider legal profession, primary legislation will be required.

‘Until we secure a legislative vehicle we cannot commit to a specific timeline and the OLC is aware of the position.’

Chief ombudsman, Adam Sampson, said: ‘We have been ready for some time to begin work on CMC complaints and give the customers of these companies confidence that they will be protected if things go wrong.  

‘We are aware that there are currently issues between the Legal Services Board and government about how best the powers given to us under the Legal Services Act can be switched on and we are eager that these are resolved as quickly as possible so that we can get on with this vital work.’

The Gazette understands the ombudsman service has doubted for some time that the move would be completed this year, particularly as it will need five months to be ready once approval is given.

The government has always insisted the start-up costs of claims management complaint-handling, estimated to be around £3m, will be ringfenced and not recovered from the legal profession.

The switch will significantly increase the workload of the ombudsman. The Claims Management Regulation Unit received 14,282 complaints from businesses and consumers about CMCs in 2012.

According to figures released in June, that number is equivalent to around 20% of the total number of complaints the ombudsman dealt with last year.