Watchdog calls for 15,000 redress cap

By Neil Rose

The Law Society Council will decide in July whether to triple the limit of compensation for inadequate professional service complaints to 15,000 following a strong recommendation from the Society's independent commissioner.

Delivering his first report and set of recommendations to the council, former MI5 chief Sir Stephen Lander also warned of the need for the Society to act quickly in reforming the Office for the Supervision of Solicitors (OSS).

If the government decided to take over complaints handling, it would cost the profession 'an arm and a leg', he said.

Sir Stephen said raising the compensation limit would improve access to redress.

The current 5,000 limit 'is effectively protecting some solicitors from the consequences of really bad service,' he told the council.

Sir Stephen predicted that lifting the limit would not lead to more complaints, saying it had not done so when raised from 1,000 in March 2000.

He added that he had heard suggestions from the government and Legal Services Ombudsman that the limit should be 25,000.

In its response, the Society's compliance board said it would consider several factors when deciding on its advice to council in July, including learning from comparable schemes and how far, in principle, the Society should provide a redress scheme for matters which fall within the ordinary jurisdiction of the courts; resource implications; and the relationship with indemnity insurance and fears that insurers would automatically impose 15,000 excesses on firms.

Sir Stephen's other recommendations, accepted by the board, included advertising the role of the OSS; bringing mediation and complaint-outsourcing schemes into full operation quickly; and extending the 'polluter pays' principle in a new funding regime, focusing more on the firms either causing complaints or without practice rule 15 client care procedures.

Sir Stephen warned that 'change is urgent.

You need to act quickly and be seen to act quickly'.

Although recognising the need for rapid progress, the compliance cautioned that, as a 'significant change programme' is being proposed, it has concerns over the timescales proposed by Sir Stephen, who specified the start of 2004 for some of the changes to take effect.

A Law Society spokesman said: 'The council is aware of the importance of moving rapidly to ensure the consumer redress scheme meets best modern practice.'

Sir Stephen told council members that the forthcoming annual report from the ombudsman is likely to be critical of the OSS, while the government's much-anticipated review of regulation in the profession - announced last year - will include the future of self-regulation.

Sir Stephen said that if the government took on complaints handling, it would 'gold-plate' the system to ensure it worked.

This would cost solicitors 'an arm and a leg', he said.

He also announced plans to survey 15% of law firms anonymously so as to discover the overall level of complaints they receive and put the work of the OSS into context.