Ombudsman warns of mis-selling risk around family law services

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28 February 2013

Sampson: lawyers could be doing more to reduce complaints

Innovation in family law services is working for consumers but could in time lead to mis-selling and hidden costs as complex financing and legal services structures emerge, the Legal Ombudsman (LeO) has warned.

Meanwhile, figures released today show that almost one in five of all complaints to LeO last year were about family law – the highest of any area of practice – with dissatisfaction levels of 13% nearly twice that of the average for other work.

More than a quarter of those relating to divorce complained about excessive or unexpected costs – and a similar number about a failure to provide adequate legal advice – and the ombudsman highlighted a case in which £4,000 of a £15,000 bill related to photocopying. The firm was instructed to waive the bill.

At 18.2% and more than 1,000 complaints, family law narrowly exceeded residential conveyancing (17.2%), with wills and probate amounting to 14%. Around half of the family law complaints concerned divorce.

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LeO recognised that the charged nature of family law in part explained the figures and also highlighted firms being unfairly blamed for poor case outcomes. Two out of the eight case studies in the report – The price of separation: divorce related legal complaints and their causes – involved clients whose criticisms of their firms were judged to be unreasonable.

It said the emergence of high street brands and alternative business structures (ABSs) has already seen innovations in the way legal services are provided and paid for. “Fixed-price services, for example, at least give customers a different option to consider when managing a modest budget, while online divorce packages may help to reduce costs by cutting down on overheads as long as what they offer meets that particular consumer’s needs.

“However, there are pros and cons to all of these services – if we begin to see the emergence of complex financing and legal service structures, with divorce being funded by cheap loans or insurance products, there are dangers of mis-selling and hidden costs.”

Customers who have problems with their provider could also be confused about who to turn to if their divorce service is delivered in a bank branch and funded by a loan, it said. “Many complainants will naturally assume that their avenue for redress sits with the Financial rather than the Legal Ombudsman”.

Lawyers in divorce cases should work harder to reduce complaints about cost, LeO concluded. Giving proper estimates and regular costs updates during a case, helping customers manage costs themselves, and putting customers first are all essential, it advised.

Case studies presented in the report included those where rising costs occurred amid poor communication between the law firm and client. One involved a final bill for £70,000 after an estimate of £5,000 to £30,000. After LeO intervened, the firm knocked £30,000 off the total. LeO estimated the average cost of a divorce is £1,300.

LeO also warned people against running up unnecessary costs by using their lawyer as a support mechanism or taking out their anger on their former partner using the court process.

Chief Legal Ombudsman Adam Sampson said: “This report shows that there are legitimate reasons for there to be more complaints about divorce than other areas of law. Some customers also create their own problems by letting emotions take over in the divorce process. However, clearly lawyers could be doing more to reduce complaints by providing accurate cost information, providing decent service levels and by taking complaints seriously.”

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One Response to “Ombudsman warns of mis-selling risk around family law services”

  1. I agree with much of what is said by the LeO. (I run a specialist law firm with 22 divorce lawyers).

    I cannot help but point out though that innovation towards fixed fees was very much something done long ago by the legal profession and not just in family law. Certainly, we’ve offered them since 1996. Some clients love them, some hate them.

    And—just watch conveyancing take over the Number 1 spot when there are actually normal numbers of transactions rather than now.

  2. Andrew Woolley on March 3rd, 2013 at 6:29 pm

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