The Legal Ombudsman (LeO) is “some way off” handling complaints about unregulated legal services providers, the chief ombudsman has admitted.
However, Kathryn Stone said it was “deeply frustrating” to LeO staff that consumers of unregulated services had no access to redress, and that the organisation would continue its discussions with the Competition and Markets Authority (CMA) on the issue.
The CMA launched its study of the legal services sector for consumers and small businesses in January this year and issued its interim report in July. It has until mid-January 2017 to complete its final report.
“The CMA will have a view on how people who get advice from unregulated providers should get redress,” Ms Stone said. “I wouldn’t want to speculate about that. I would rather wait for further discussions.
“What I would say is that it’s clear to us at the Legal Ombudsman that there are many, many people who receive a service from unregulated providers who have no access to redress when things go wrong.
“This is deeply frustrating for them and it is deeply frustrating to our staff. We need to make sure that those people who receive legal services are not left high and dry when things go wrong.”
Ms Stone said there were “all sorts of questions” about how any scheme for unregulated businesses could be funded and constructed, meaning that LeO was “some way off” making a decision.
“In the provision of information for consumers of legal services we could all do a lot better, and in that I would include the Legal Ombudsman.
“I’m sure many of us use services all the time, and we don’t stop to check first of all whether or not that service is regulated by a particular body.
“I was at the dentist recently. You assume your dentist is regulated, but you don’t stop to check. One thing we call usefully do is be clearer about our processes and whether a firm is regulated or unregulated to make sure consumers are making informed choices.”
Ms Stone said she did not believe in forcing law firms to publish complaints data or “bamboozle” consumers with logos and stickers to make it clear that they were regulated.
She was equally sceptical about the SRA’s plan  to allow solicitors to practise from unregulated businesses, saying it could make things “extremely difficult for people” and LeO wanted to make legal services “simpler, not more complicated”.
On the “bulge” of complaints received by LeO over the summer , and the decline in performance in terms of timeliness, Ms Stone admitted that this was “not yet what it should be” and said LeO had launched a “number of initiatives” to improve the situation, combined with a “rolling programme” of staff recruitment.
“We think we have all the initiatives lined up to ensure we achieve our timeliness targets and, more importantly, achieve thorough and fair outcomes.
“Consumers are very clear that timeliness is only part of what they want. Customer satisfaction levels have increased and we’re really proud of that.
“It’s important that we don’t see timeliness and quality as binary concepts. The Legal Services Board (LSB) has been very clear that they don’t see it that way. I would not want to sacrifice quality for timeliness.”
Ms Stone said there was no end in sight to the supervision by the LSB of LeO’s governing body, the Office for Legal Complaints, since the oversight regulator “had to be confident” about the new initiatives being put into place.
She said LeO had “gone on the road” to visit local law societies, law firms, COLPs and COFAs and promote itself as a “force for positive change”, rather than a consumer champion or advocate for the profession.
She added: “Let’s see what the CMA is going to say. I think it’s going to be interesting to see how we in the legal profession respond to that report.”