26 June 2012

LeO “going too far” with bid to allow prospective clients and third parties to complain

The Legal Ombudsman (LeO) is going too far in proposing to allow prospective clients and third parties to complain about lawyers, the Law Society has claimed.

Chancery Lane found support from the Council for Licensed Conveyancers (CLC), which has branded the move “unjustified”.

In its response to LeO’s consultation on updating its scheme rules, the Law Society said prospective clients are already entitled to report bad behaviour by a lawyer to their regulator. Extending LeO’s reach to them “would in effect impose extra duties to prospective clients in addition to those currently imposed by the regulatory regime and would encroach into the jurisdiction of the regulator”.

On third-party complaints, the society said: “Solicitors are subject to regulatory controls to ensure that they behave properly to third parties in what are often contentious and difficult situations. We do not see why those third parties should have any right to compensation which they could not obtain at law.

“Subject to duties to the court, lawyers owe their duties to their clients and enabling third parties to receive redress from solicitors who owe them no duty will introduce a potential conflict with the interests/instructions of their clients. A move in this direction would represent a radical change of principle.”

In its response, the CLC said LeO had not made the case for either extension of its jurisdiction, saying that the third-party proposal would effectively create an indirect duty of care.

By contrast, earlier this month the Legal Services Consumer Panel called for LeO to be more radical in its approach to accepting third-party complaints.

The Law Society also opposed raising the financial limit for compensation awards from £30,000 to £50,000 – “[LeO] cannot be a satisfactory substitute for a court in complex cases,” it said – and extending the current one-year time limit so that complaints could be accepted up to six years from the event or three years from the knowledge of the event.

Chancery Lane said this would not be reasonable and that copying the rules for bringing some court proceedings was inappropriate given the different nature of the ombudsman process. However, the CLC supported both of these proposals.

In a new blog on LeO’s website, chief ombudsman Adam Sampson acknowledged that whatever decisions it reaches on the scheme rules, “we will never satisfy all our stakeholders”.

He explained: “On our upper redress limit, for example, the responses at our consultation events were utterly predictable: consumer groups arguing for harmonisation with the Financial Ombudsman’s limits (which have recently been increased to £150,000); lawyers’ groups arguing for the existing £30,000 limit to remain unchanged. Whichever route we decide to take, we will get brickbats from somewhere.”

 

By Legal Futures

Tags: complaints, Council for Licensed Conveyancers, Law Society, Legal Ombudsman, LeO