The legal ombudsman’s office has insisted it will fundamentally change how it approaches complaints handling in the face of a future barrage of extra reports.

The organisation revealed earlier this week that it expects the number of complaints to exceed 21,000 in 2027/28 – an increase of 102% in three years.

A draft business plan and budget published yesterday outlined that the proposed budget for next year will rise by 6.9% to £22.8m. This is a proportionately lower increase than in recent years and reflects both the new approach and the implementation of changes to the fee structure that effectively reward those who settle cases early.

As was proposed during the summer, from next April the ombudsman intends to replace the current individual case fee of £400 paid by legal services providers facing complaints. Providers will instead pay a tiered case fee depending on when the matter is resolved: £200 for early resolution, £750 where there is an investigation and £1,500 for a final decision.

Depending on individual circumstances, a £400 case fee will be levied for failure to issue a final response to a complaint within eight weeks.

The proposed fee changes - which require the approval of the Legal Services Board - are being pushed as helping to reduce the burden on the legal profession to pay for the service.

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The LeO plan said: ‘Assuming the proposed changes to LeO’s case fees are approved, the 2027/28 income model will reflect a significant rebalancing of LeO’s funding mix – reducing reliance on levy funding, and increasing the proportion of costs recovered through other income streams.’

But the organisation is also clear that the solution to the complaints rise is not to repeatedly add more people and cost to the same model or to create an ever-larger service.

There are further proposals to give the ombudsman greater powers to intervene and stop complaints at an earlier stage. If approved, from next April LeO would have discretion to dismiss complaints ‘where the impact or disadvantage is trivial, inconsequential or purely theoretical’. A final decision will be issued only where it is considered ‘necessary and proportionate’ and an ombudsman can treat a case as resolved if neither party has raised substantive objections.

Consumers will have to explain the impact of the alleged service failing and a 12-year long-stop will be introduced. A previous proposal to allow consumers to bring complaints before the first-tier process with firms is exhausted has been dropped.

By the end of 2027/28, LeO expects that more than 70% of cases would be resolved within six months, and more than 80% within a year.

Phil Cain, chief ombudsman, admitted that demand will continue to exceed the number of complaints resolved during the next three years. ‘Transformation for LeO is not about processing ever-increasing numbers of complaints through the same system,' he said. 'It is about building a better and more sustainable service, while doing more with the insight that comes from the thousands of complaints we see.'