The Legal Ombudsman has been warned its very existence could be up for debate as it faces another struggle to justify a massive hike in their budget for the coming years.

The Office for Legal Complaints, which runs the Legal Ombudsman, wants to increase its annual budget by 19% to £15.26m in 2021/22 to address a massive backlog of cases that has built up this year.

The Legal Services Board turned down a similar proposal earlier this year and will rule next March on whether to approve this increase. In the meantime, the oversight regulator has warned the decision is likely to be ‘finely balanced’.

Legal Ombudsman

LSB says lawyers and consumers want improvement but have little confidence in ombudsman

Source: Jonathan Goldberg

In a board paper presented at this week’s meeting, the LSB said: ‘The dilemma is that the performance situation has created a lack of confidence in the scheme, but without the resources necessary to offer the opportunity for sustainable recovery the sector will have to accept less progress at a slower pace than is desirable.’

The paper acknowledged that a ‘significant investment’ is needed to turn the Legal Ombudsman around, but challenges remain significant and the OLC must show how its transformation programme will work. For the first time, the LSB also questioned the future of the ombudsman scheme itself, despite recent management changes.

'The challenges facing the Legal Ombudsman remain significant, said the paper. 'The board has also stated that ultimately if it becomes evident that the Legal Ombudsman scheme, however well-led, is not capable of delivering for consumers to the required standard, alternatives to the current model must be contemplated.'

The scale of the problems facing the Legal Ombudsman is unprecedented: by the end of 2020/21 there will be 5,000 cases in the pre-assessment pool – a number which has doubled in a year. Wait times for even low complexity work are more than six months, with medium and high complexity work taking up to a year to be resolved.

Ambitious plans unveiled last month include increasing the number of cases closed by 47% to more than 7,000 in 2021/22 and by a further 28% the following year. But that will only be achieved, the OLC says, with a budget rising to £16.2m by 2022/23, which will fund a 50% increase in investigation staff.

Even with budget increases, big gains are unlikely for another two years, and the pre-assessment pool will still be more than 4,000 at the end of 2021/22. 

The OLC is currently consulting with the legal profession – which ultimately funds the scheme – about its budget, and the LSB board heard that early indicators suggest lawyers are keen to see performance improve but are ‘unlikely to welcome’ an increase.