A voluntary Legal Ombudsman scheme would add another layer of complexity to the complaints system and confuse consumers, the Law Society has warned.

In a consultation response published today, the Society ‘broadly welcomed’ the ombudsman’s three-year plan – but opposes plans to extend its remit.

In particular, the organisation raises concerns that plans to consider complaints about unregulated providers could prove ‘costly and potentially detrimental to consumers’.

‘The ombudsman would be in no position to help those who find their unregulated provider has lost their money,’ said the Society response.

‘Nor, where the Leo identifies the persistent poor performance of a provider, will the ombudsman have a regulator to turn to who can take action against the firm. This will leave the ombudsman in the position of giving legitimacy to a firm that it knows is performing poorly.’

The Legal Ombudsman’s proposal outlines attempts to slash costs by 13% in the next two years as part of restructuring plans.

The unit cost is expected to come down from £2,168 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.

The Law Society said the aim of improving efficiency was to be welcomed but not to the detriment of quality.

‘The ombudsman has earned a reputation for good quality decision-making and we would not wish to see this lost by inappropriate cost-cutting measures,’ added its response.

The Society suggested the ombudsman might consider initiatives to manage client expectations and lower the number of cases going to a final decision – reducing the costs both for the ombudsman and the profession.

The Law Society has also hit back at a report by the Legal Services Board, the oversight regulator, that claimed resistance from the legal profession to external forces entering the market was a ‘powerful drag on innovation, competition and consumer choice.’

The LSB business plan, released in December, claimed ongoing links between the regulator and professional body undermine consumer confidence in the fairness of the system.

The Law Society argued the profession in England and Wales would not have become the worldwide leading power if it was resistant to change.

The Society’s response said it was ‘deeply depressing’ the LSB report barely mentioned professional principles such as duty to the court and the avoidance of conflicts of interest.

‘These concepts do not provide an excuse to resist change: they are essential to the administration of justice and the maintenance of a balance between the parties – one of whom may well have significant resources and the other may be a consumer.

‘If the LSB ignores these principles, not only will the administration of justice and the interests of consumers be prejudiced but the reputation of the legal profession in England and Wales will be damaged.’

The Society continued that the LSB is ‘taking too pro-active a role’ in dealing with approved regulators and ‘seeking too much to set its own agenda’.

The response added: ‘We believe that the LSB could significantly reduce its research work further and could further reduce costs by avoiding duplication of work being done by the approved regulators.’