The compensation limit currently planned for the Office for Legal Complaints (OLC) could rapidly more than triple to match the £100,000 on offer through the Financial Ombudsman Service (FOS), it was claimed last week.


Graham Reid, an employed barrister at City firm Reynolds Porter Chamberlain, predicted that when the OLC begins work, the way it operates will converge with the FOS to offer fast, cheap and potentially 'rough' justice.



The newly passed Legal Services Act sets the OLC's maximum compensation level at £30,000 - double the current limit at the Legal Complaints Service - but minister Bridget Prentice told Parliament last month that the supervisory Legal Services Board could 'virtually on day one if it so chooses, consider whether the limit ought to be further increased'.



The FOS has a £100,000 limit and Mr Reid asked: 'Why should lawyers be any different from financial advisers?'



Mr Reid also pointed to section 158 of the Act, which allows a regulator such as the Solicitors Regulation Authority (SRA) to require a solicitor to notify clients that they may have a claim for redress. This could lead to 'self-generating, self-funding regulatory class actions', he warned.



Using the example of a volume conveyancer uncovering a systemic error which may affect thousands of clients, he said there was probably nothing the solicitor's professional indemnity insurer could do to stop the insured writing to them all if the SRA required it.



Mr Reid was speaking at a seminar organised by Reynolds Porter to explain to insurers how they are 'lashed to the mast' in being required to cover disciplinary proceedings against solicitors.



Partner Katherine Rees explained that while there were some technical arguments to be run, the minimum terms and conditions of insurance would require insurers to cover at least some of their insureds' defence costs.



Neil Rose