Last year's backlog at the Office for the Supervision of Solicitors (OSS) resulted in a £10 million emergency injection and an intervention by the Lord Chancellor.Of the £495 payable by each solicitor to the Law Society this year about one-third (£165) will go to the OSS.

This proportion would seem sustainable only if firms are willing to pay the costs of fellow practitioners' complaints.

This appears to be true no longer.

Reform is needed, but no one seems clear about what should be done.

I suggest that the objectives of reform should be to: reduce the number of complaints arising in the first place; maximise the number dealt with by the professional body or outside agencies.The recent campaign by the Law Society exhorting good practice in complaints handling by firms will help, as does the existence of practice rule 15.

But the latter has little bite, and poor compliance has no cost.

There is little incentive for the firm with a 'difficult' client to sort the problem out rather than let the matter pass to the OSS -- and the cost to the whole profession.

The first reform should give solicitors a financial incentive to settle problem cases themselves.

Private sector ombudsman schemes in the financial services field make case fees, covering up to 90% of the costs, payable by the firms generating the complaints.Solicitors' complaints handling should become virtually self-funding in the same way.

A standard case fee would not, like court costs, follow the event.Unless unsuccessful clients are to pay the case fee, which is not likely to be politically acceptable, or the cost is to fall on the profession as a whole -- and the aim is to move away from this -- the firm from which the complaint comes must pay.

The case fee would be payable whether or not the complaint is upheld.

This would ensure that a firm receiving a complaint will think twice before rejecting it.

There would be direct costs in having ineffective internal complaints-handling systems.There is in principle no difficulty in implementing a system like this for 'service quality' complaints.

Complaints about professional misconduct are different.

Looking again to financial services, this distinction is regularly drawn.

Complainants wanting financial redress go to an ombudsman, while someone who wants to draw attention to a regulatory or disciplinary matter must report it to the regulator.

The OSS deals with both.An adjudicator (or ombudsman) should deal with service quality complaints, leaving regulatory matters to a reformed OSS.The next reform would limit client access to the adjudicator.

No complaint should be accepted unless the client has exhausted the firm's internal system.

The OSS does something like this now, but without clear authority.Next, the rule that prevents solicitors' firms settling claims against them should be abolished.

It leads to dreadful publicity for the profession, appalling experiences for dissatisfied clients and their firms, and an adversarial approach to financial claims.

It also actively discourages firms from dealing with their own mistakes.

The fact that clients could refer matters to the adjudicator if they considered the settlement offered by their firm were unfair should prevent allegations that firms were 'buying off' claims too cheaply.Finally, the distinction between inadequate professional standards and negligence should go.

The adjudicator should have substantial power to deal with financial or other loss -- say, up to £50,000 as a start.

Insurance costs should fall as fewer claims are dealt with adversarially by opposing firms.