Ombudsman can't cope with costs disputes, Law Society warns

Diverting fee disputes from the court to the legal ombudsman will backfire because the complaints-handler will not be able to cope, the Law Society has said. 

The Civil Justice Council is consulting on whether fee-related disputes over modest bills should be settled through the ombudsman (LeO), with solicitors subject to an overarching principle that charges should be ‘fair and reasonable’. For disputes over sums too large for the ombudsman route, recourse to the courts would be preceded by mandatory alternative dispute resolution.

In its response to the consultation, the Law Society questioned the evidence base behind the proposal and warned that the plans risk overloading an ombudsman system already under significant pressure.

Society vice president Brett Dixon said: ‘There is currently inadequate data about how the current costs regime operates in practice, making it difficult to assess whether the proposals are necessary, proportionate or workable. LeO, meanwhile, has been battling a backlog of cases for years and has consistently failed to deliver its core statutory function, a speedy resolution service.

‘These proposals will add to LeO’s workload and may not be feasible,' Dixon said. 'The ombudsman must continue to focus on meeting consumer demand and improving its performance before taking on additional responsibilities.’

Dixon said that the Society supports reform of the Solicitors Act to create a clearer, simpler and more modern costs system.

He added while the CJC’s proposals are well-intentioned, any reforms must keep pace with the rapid changes taking place across the legal profession. ‘Solicitors and clients are using technology and AI, while the delivery of legal services is expanding via unbundled legal services and alternative forms of dispute resolution,’ he said.

In Belsner, master of the rolls Sir Geoffrey Vos said it was unsatisfactory that firms challenging legal fees can adopt a business model allowing them to bring expensive High Court litigation to assess modest bills. He suggested the legal ombudsman scheme would be a cheaper and more effective method of querying solicitors’ bills.

But the ombudsman has its own challenges without being burdened with extra costs disputes: complaints about lawyers rose by 37% in the last three months of 2025 and complaint volumes for the quarter were higher than any previous quarter on record.

In its consultation the CJC also proposes replacing the concept of ‘informed consent’ and removing the existing distinction between contentious and non-contentious business.

Launching the process, Mr Justice Adam Johnson, the CJC working group’s chair, said the current regime for challenging legal costs is ‘complex, formalistic and outmoded’ and provides ‘perverse incentives’ for costly litigation.