The legal complaints handler should consider reinstating ‘free’ cases for firms struggling to pay investigation costs, the Law Society has said. Chancery Lane also called on the Legal Ombudsman to be alive to clients bringing complaints unfairly in order to negotiate a reduced costs bill.
It was responding to the ombudsman’s consultation on its business plan for 2018/19. Much of the response focuses the need for more detailed analysis of costs – particularly where LeO has sought to increase its budget – but another theme is also the increasing burden on the profession.
Currently, a case fee of £400 is charged to all service providers under investigation, with the fee waived if the ombudsman is satisfied firms took all reasonable steps under their own complaints procedure.
Until 2013, LeO operated a ‘free cases’ approach where a lawyer or firm was not required to pay the case fee for its first two complaints each year, but this was scrapped in favour of the ‘polluter pays’ principle.
One of the ombudsman’s objectives for the next year is to develop the scheme and the service provided, and the Society argues this should include a rethink on fees policy.
The response said: ‘We understand the case fee forms a small part of the Ombudsman’s income in relation to its legal activities, however, the impact of the case fee on smaller firms can be considerable.
‘For this reason, we would like to see the two free case fees reinstated and consideration given to exemptions to the case fee where work is carried out pro bono. In the longer term we would also like the Ombudsman to consider whether the level of case fee should fall.’
The Society stressed that any further innovation in the complaints scheme should deter the possibility of ‘vexatious’ claims made to negotiate a reduced bill.
‘It should be a normal part of the initial assessment made by the Ombudsman to gauge whether a complaint is made in good faith and not vexatiously,’ added the response.
The Ombudsman estimates its budget – paid entirely from contributions from the profession – will be £12.5m in 2018/19. This is the highest figure since 2014/15 and is increased to take account of 8,425 projected cases next year (including 7,900 new cases plus a backlog of cases from 2017/18).
LeO says it will improve performance, reduce unit cost and cut staff from April 2019 through new processes and a new case management system.
The Society questions the detail included in the plan and calls for greater consistency in decision-making, after some firms reported that different decisions have been made where underlying facts were similar.