The legal ombudsman (LeO) service is to attempt to slash costs by 13% in the next two years as part of restructuring plans, it revealed today. 

The service was criticised ast week by the Legal Services Consumer Panel for LeO’s ‘unit cost’ of £2,168 per complaint – a figure that was higher than for similar complaint-handling schemes.

But in a document released today on strategy and budget, LeO has sought to address that criticism with a reduction in costs.

The unit cost is expected to come down to £1,865 per case in the next two years, with overall costs due to fall from £16.7m in 2012/13 to £14.55m in 2014/15.

Total planned expenditure has come down significantly from projections made in last year’s annual report. Then the budgeted expenditure for 2013/14 was estimated at £17m. Current projections show the service is likely to cost £15.6m.

There are no plans to cut staff numbers further following the 44 redundancies announced earlier this year (although the savings will not be felt until the next financial year). Headcount is likely to stay at around 228 for 2014/15.

In a joint statement, chief legal ombudsman Adam Sampson (pictured) and chair of the board Elizabeth France said performance has improved every year since LeO was formed and it is now a ‘recognised and respected part of the legal and consumer landscapes’.

The statement added: ‘We are confident that we are progressing towards becoming an increasingly effective and efficient alternative dispute resolution [ADR] service for consumers and professionals, with attention remaining on our unit cost.’

The number of resolved cases continues to confound predictions. Last year’s annual report budgeted for 8,500 cases in 2013/14, but this is likely to be nearer 8,000 by next April. Core demand is forecast to be around 7,700 resolved cases in 2014/15.

The legal ombudsman has also announced it will use the recently approved EU directive on ADR to simplify how redress is provided for consumers.

The directive is intended to ensure that out-of-court ADR for contractual disputes between consumers and businesses is available from 2015.

The joint statement added: ‘The time is right to think about how the ombudsman could consider broadening its approach to redress; to mirror changing consumer behaviour and innovations in legal services and beyond, which are eroding traditional boundaries between sectors.’