LeO bids to open doors to clients of unregulated legal services providers

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30 July 2013

France: system should not be constrained by traditional views of the boundaries to legal services

The Legal Ombudsman (LeO) has today begun a debate over whether its remit should be widened to capture complaints against the 130,000 unregulated providers who deliver legal services.

It has also raised the prospect of LeO becoming the complaints body for a wide range of professionals where no alternative dispute resolution (ADR) scheme currently exists, such as chartered accountants, some property professionals, tax advisers and architects.

This has been given impetus by recent EU legislation that means the UK must, by 2015, make ADR available for all complaints by consumers against traders under most contracts for goods and services – including professional services.

It also links with the Legal Services Board’s investigation into whether all legal services – rather than just the six current reserved legal activities – should be subject to some form of regulation.

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Research by Northumbria University also published by LeO today highlights the confusing nature of legal services provision and redress, finding consumers ill-equipped to choose between different providers with different levels of protection, confused as to how the market works and unwilling to pursue redress when dissatisfied.

It breaks the market into three: the “core” market of authorised lawyers, an “alternative legal services market” of people providing legal advice without needing to be authorised – such as non-practising barristers and employment advisers – and finally the likes of accountants and surveyors who provide ancillary advice to their main work “which may be perceived by the consumer as legal advice”.

These are further complicated by alternative business structures, online services and services under a single brand that are actually being provided by different entities, LeO said.

The Legal Services Act 2007 allows LeO to ask the Lord Chancellor for a voluntary scheme covering legal services beyond just the reserved activities – voluntary because businesses would have to choose to join it. This option is already being considered in relation to will-writers.

The discussion paper puts forward the notion of a restructured LeO covering other professional services – either on a voluntary or compulsory basis – as one way for the government to meets its EU obligation.

This could provide “clarify for consumers, consistency across professional sectors, the benefits of using an established organisation rather than creating a new one, and economies of scale,” LeO said.

LeO chair Elizabeth France said: “Buying legal advice is to some extent a lottery for consumers who are understandably confused about whether the people providing it are up to standard. It also means people might not know where to turn if they have a complaint – or realise that something can be done to remedy the situation.

“The time is right to start a focused debate on how to create a system that is accessible, transparent, effective and efficient both for consumers and businesses. That system should not be constrained by traditional views of the boundaries to legal services – we are seeing more overlaps with other areas and professions and we need to think about how to make the system work better.”

LeO has also suggested improvements for redress systems, such as a common portal to assist consumers, with ombudsman schemes sorting out between them where best a complaint might be resolved.

A second piece of research published by LeO today, by Queen Margaret University in Edinburgh, looks at the changing environment for ombudsman schemes and suggests eight areas where they may need to shift their practices in response, such as becoming more informal in terms of process, more timely in resolving complaints and being more integrated rather than sectoral.

Last week Legal Futures revealed that LeO may make 10% of its staff redundant due to lower than anticipated levels of complaints.

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