An expected avalanche of extra complaints about claims management companies has not materialised, according to Legal Ombudsman figures.
In figures released yesterday, the ombudsman’s office (LeO) reported 681 complaints or issues raised relating to CMCs in the three months after it expanded its remit to deal with these gripes in January – even though the LeO had planned and budgeted for around 3,000 cases.
Of these, the ombudsman accepted 253 cases, with 146 complaints resolved. Half required no remedy and in 11% of cases the ombudsman ordered the CMC to pay compensation.
The Legal Ombudsman had planned for around 3,000 cases and budgeted accordingly. The Ministry of Justice, which previously handled complaints about CMCs, reported last year that it received more than 10,000 contacts in 2013/14.
The vast majority (94%) of CMC complaints related to financial products and services, with personal injury claims accounting for 4%.
Almost a third of complaints related to fees, with 15% focused on delays or failure to progress a case.
Surveys of consumers found a low level of public confidence in CMCs, with 4% of people trusting them to tell the truth, compared with 47% who trusted lawyers to tell the truth.
Ombudsman Andrew Burford told yesterday's Westminster Policy Forum that he was ‘pleasantly surprised’ with the co-operation of CMCs since January. He also revealed one claims farmer had given up its licence following a number of complaints to the ombudsman service about it.
LeO has budgeted to require £2.63m to cover the cost of handling CMC complaints in 2015/16, as well as £12.21m to cover legal activities.
The figures were outlined in a report published yesterday in which Office of Legal Complaints chairman Steve Green reopened the issue of expanding its remit to cover unregulated legal services providers.
‘Many consumers when making a decision on purchasing a service will not think about where the boundaries lie between regulated and unregulated entities,’ he said. ‘But they will expect to be able to seek redress for poor service.’
Green said consultation on the establishment of a voluntary scheme for unregulated providers will start later in 2015/16.