Law firms could be forced to pay compensation to wronged clients who have not actually complained under plans being considered by watchdogs.

Papers from last month’s meeting of the Legal Services Board, the oversight regulator, reveal that discussions are ongoing about how to improve complaints handling. The LSB is looking at the financial services sector model, under which businesses are required to identify whether the root causes of complaints could have affected other clients who have yet to complain. If so, firms may be required to offer more comprehensive redress.

The papers note: ‘This may be an avenue to explore with stakeholders in terms of whether such an approach could be adopted by legal services providers.’

The LSB is understood to have evidence that a high number of complaints are being made to the legal ombudsman before they have been dealt with by firms. There is also evidence that consumers still find it difficult to complain.

The LSB may want regulators such as the Solicitors Regulation Authority to intervene to make the process easier and to be active in seeking out clients with a potential grievance.

LSB chair Dr Helen Phillips said new requirements will be produced for consideration early next year. She added: ‘To provide better outcomes for complaints and the profession more broadly, we want to see greater collaboration between regulators and the sector to ensure there is a consistent, high-quality approach to complaints handling across the sector. It must also be easier for people to make a complaint and follow the process.’

SRA regulations state that firms must publish information on their websites on the complaints procedure, how and when a complaint can be made to the ombudsman, and information about how to complain to the regulator.

The LSB has noted that the SRA does not prescribe the degree of prominence accorded to complaints guidance, in contrast to rules on fees. In 2019, an SRA sweep of law firm websites found that 52% did not display complaints information, prompting the regulator to issue more than 250 letters of guidance.

 

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