The failure of law firms to resolve complaints to the client's satisfaction is hampering attempts to improve the legal ombudsman service, according to a new report by the complaints handler.

The Office for Legal Complaints (OLC) said that data for 2022/23 showed that providers’ first-tier complaints handling was not adequate in 45% of cases. That had a knock-on effect last year as demand for the ombudsman service to settle disputes increased.

According to proposals for its 2024/25 budget, published as part of Legal Services Board papers this week, LeO said there had been a ‘sustained increase’ in underlying demand for complaint resolution.

In the nine months from April 2023 to the end of December LeO received 93,009 contacts – 13% more than in the same period the previous year (82,332).

The service said a ‘key factor’ in determining caseload was the number of complaints that were not resolved to consumers’ satisfaction at the first tier. ‘Even if a legal provider’s level of service has fallen short, it isn’t inevitable that a complaint will be referred to LeO,’ the report said. ‘The culture of the legal profession around complaints, how service providers respond and their skill in resolving complaints fairly and reasonably, are key in ensuring LeO is only called on where complaints can’t be resolved without an independent view.’

The organisation added that if firms learn from past experience to address customer concerns quickly and rectify any mistakes made, fewer complaints should be referred.

The OLC, which oversees the legal ombudsman, sought a total budget of £17.95m for 2024/25, representing a 7% annual increase.

LeO said it expects to have reduced the number of people waiting for an investigation by 30% by the end of the current year but will be ‘outside of its forecast range’ for the time that investigations take. The organisation expects to resolve 700 more complaints in 2024/25 and reduce the queue by 40% to 1,650 cases by the end of March 2025.

The LSB, the oversight regulator, recognised performance improvements had been achieved and that further progress was likely in the next 12 months. But it added: ‘We are concerned about the underlying increase in demand and the risk this poses to LeO’s transition to phase two of its performance improvement journey, and transformational change that delivers what the public expects from a good, modern complaints resolution service.’

The LSB added there was a ‘clear role’ for regulators in ensuring providers improve first tier complaints handling.

The board was invited to approve the budget proposals.


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