Burns: Wide latitude
The High Court has refused a law firm permission to challenge a decision of the Legal Ombudsman (LeO) which cost it over £115,000 in compensation and reduced costs.
Andrew Burns KC, sitting as a deputy High Court judge, said the courts “must respect the flexibility that the Legal Ombudsman scheme gives in the process that it adopts”.
He went on: “What is fair and reasonable in the ombudsman’s opinion, is plainly a test which gives a wide latitude. The ombudsman is not constrained by what a court can or cannot do.
“This court must also give a wide latitude not only to the process that the ombudsman uses, but also the evaluative judgement that is used in deciding complaints.”
Kent firm Knights Solicitors – not to be confused with the listed law firm of the same name – sought to challenge LeO’s decision to uphold the complaint of clients Glen and Marie Tocher, awarding them £50,000 in compensation and reducing their legal fees by just under £66,000.
The Tochers instructed Knights to advise on a neighbour dispute. Mr Tocher said Knights “gave him an initial estimate of the fees of bringing a legal claim of £20-30,000 plus VAT”, which was never updated or revised.
Proceedings were issued in 2020 but discontinued in May 2022 “when the Tochers saw the full costs of going to trial”. The couple were ordered to pay the other side’s costs. They complained to Knights in July 2022 and then escalated the complaint to LeO.
LeO investigated complaints that Knights exceeded its cost estimate “without updates or explanation”, failed to inform the client about potential hearing costs “in a timely fashion”, and failed to address an opposing party’s costs submission.
A senior ombudsman issued a final decision in the Tochers’ favour in November 2024.
Permission for judicial review was refused on the papers and the application renewed before Judge Burns.
Counsel for Knights argued that it was “fundamentally unfair” to the law firm to be given only headings on what the Tochers were complaining about, rather than the “substantive details”.
Judge Burns rejected this: “The claimant knew in broad terms the complaint that was made against the firm. That was that the firm had not informed their client about what the neighbourhood dispute would cost. There did not need to be any court style standard disclosure, opportunity to reply or a full ‘cards on the table’ approach as in litigation.
“The ombudsman does not need to share all the details of a complainant’s submissions or evidence in a normal case. The claimant in this case was able to explain what the firm did and why they did it in relation to updating their client on fees, as appropriate.”
He dismissed a further argument that the decision was ultra vires because LeO essentially made a finding of professional negligence, with a compensation award of about £115,000, and thus subverted the statutory system, where compensation was limited to £50,000.
He observed that Parliament, in passing the Legal Services Act 2007, had not included reducing fees within the £50,000 cap.
Further, Judge Burns disagreed that LeO did not have the evidence to show the Tochers would have pulled out of the litigation earlier had they known the full extent of the fees and merits.
The ombudsman set out the material on which it could “properly reach the decision it did”.
“For those reasons, I agree with the deputy judge that none of the claimant’s grounds reach the hurdle required to amount to an arguable claim with a realistic possibility of success.
“I agree that the claimant’s grounds, in reality, amount to reasons why the claimant disagrees with the final decision of the ombudsman.”
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