Consumer panel “uncertain” over future of Legal Ombudsman

Chambers: Proportionality does not trump fairness

The Legal Services Consumer Panel (LSCP) has said it is “uncertain” whether radical measures being considered by the Legal Ombudsman (LeO) to cut its backlog of complaints will deliver sufficient change to turn the organisation around.

Meanwhile, the Council for Licensed Conveyancers (CLC) called for outsourcing to be introduced immediately, countering LeO’s arguments that a change in legislation was required.

Responding to the consultation on LeO’s draft 2022/23 business plan and budget, LSCP chair Sarah Chambers said the panel had confidence in LeO’s leadership team but remained “unsure” about whether the ideas in the business plan – which include outsourcing, demand management and reviewing the scheme rules – would be enough to clear the backlog of cases in the pre-assessment pool (those accepted by LeO but not yet allocated to an investigator).

Ms Chambers said the panel had considered “very carefully” whether the business plans would lead to an organisation able to serve its customers “as effectively and efficiently as they need”.

She continued: “At this point, we are uncertain.”

The Legal Services Board has made it clear to LeO that this is its final chance to improve performance.

While backing most of the “radical options” outlined, the panel was “wary” of the one which permitted complaints to be rejected on the grounds of proportionality even where there was evidence of poor service.

“Proportionality does not trump fairness (unless the detriment is genuinely de minimis), so this option could erode the right of consumers to seek redress where providers have provided poor service.

“Sometimes an apparently ‘small’ case can be an element of a much wider problem in which a large number of consumers are each experiencing apparently petty problems, but only one or two are calling it out.

“It would be a pity if such issues were dismissed on grounds of proportionality.

“Some form of mediation provision, or suggestion by the ombudsman that the provider could make a small payment without a prolonged investigation, might be preferable to a simple dismissal.”

In its response, the CLC challenged LeO’s view that schedule 15 of the Legal Services Act 2007 meant new legislation would be needed before it could outsource complaints investigation.

Urging to LeO to reconsider this, it said: “We are very concerned that the improvement plan places over-reliance on achieving legislative change and locks in the current level of performance.”

The CLC said the draft business plan “seems to be proposing” that the backlog could be cut by half over the next two years, which was not “an acceptable pace of progress to achieve an efficient and cost-effective service.”

Given the budget underspend in the current year, the CLC said LeO should not need the extra budget increase of 1.3%, on top of the baseline 3.8% it is seeking, to implement the radical reforms.

LeO should also have set out “a clear timetable which went beyond March 2024 for eventually eliminating the backlog” and delivering “an efficient and cost-effective service”.

Sheila Kumar, chief executive of the CLC, said: “All regulators should be concerned by the ongoing resolution delays faced by consumers, with some complainants waiting for more than 1,000 days for a decision after their case has been accepted for investigation and the OLC taking, on average, 24 days to respond to general email enquiries.”

The Association of Consumer Support Organisations’ response said research among claimant law firms in personal injury and other consumer law sectors earlier this year found that the size of the pre-assessment pool was a “leading cause of frustration” and this should remain the priority.

“The minimum six-month wait for an investigation to start is likely to frustrate consumers and will service to undermine public confidence in legal services and their regulation.

“Although the wait times are published on the LeO website, the information is not easy to find, and therefore does not aid the management of consumer expectations.”

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