The Law Society has firmly rejected a proposal by the Legal Ombudsman to extend its remit to handle complaints about unregulated providers of legal services through a new voluntary scheme.
In a response to the proposal, published yesterday, the Society says it is ‘concerned about the direction the Legal Ombudsman is pursuing’ and: ‘We do not support the Legal Ombudsman’s proposal to use its voluntary jurisdiction to extend its remit to cover complaints about legal services provided by unregulated providers.’
The Society was responding to a discussion paper asking for views about how the ombudsman could ‘broaden its approach to redress’. In the paper the ombudsman said: ‘We stand ready to consider widening our role in relation to alternative dispute resolution for professional services, as part of a coherent overall framework for redress.’
However the Society said that such a move ‘will cause further consumer confusion and is likely to lead to consumer detriment’. It also expressed concern that ‘taking on this segment of the market might affect the Legal Ombudsman’s effectiveness and efficiency in its core jurisdiction.’
One factor behind the expansion is the EU’s alternative dispute resolution directive, which is due to come in to force by 2015.
While the Society said it recognises that implementing the EU’s ADR directive may lead to unregulated providers of services requiring an ADR service ‘we do not believe it is appropriate to use the Legal Ombudsman’s voluntary jurisdiction to provide this’.
The Society also notes that as there is ‘currently limited information about how the government will approach the implementation of this directive’ the ombudsman’s discussion paper is ‘premature’.
It also attacks the concept of a voluntary scheme for handling redress, saying an incomplete system of regulation would be exploited by non-regulated providers who entice clients by giving the false impression that they are regulated. Enforcement would also be more difficult, the Society says.
‘Unregulated providers will have much more freedom to close and reopen under a new name and/or change location frequently. Unscrupulous providers may use membership of such a scheme to provide them with legitimacy and allow them to take clients’ money before disappearing, leaving the Legal Ombudsman to deal with the complaints.’
However the ombudsman’s proposals found more favour with the Legal Services Consumer Panel. In its response, the consumer watchdog described the ombudsman’s proposals as ‘overdue and welcome’. It backed the idea of creating a common web portal for all legal complaints, which ‘would help to mask the existing complexities for consumers’.
Consultation on the discussion paper closed yesterday.