Law firms “may avoid high-risk work” under new complaints rules

Complaints: LSB wants step-change improvement

Law firms may avoid carrying out work in “high-risk sectors” under the new regime planned by the Legal Services Board (LSB) for client complaints, the Law Society has warned.

Meanwhile, both the Bar Standards Board (BSB) and Bar Council raised concerns about the new data collection requirements for barristers and chambers.

The LSB launched a consultation this summer on new requirements for first-tier complaints – ie, those handled by lawyers themselves – together with new guidance and a statement of policy, saying it wanted to see a “step-change improvement”.

The Law Society said it “broadly” supported the policy aim of improving processes in the approach and resolution of first-tier service complaints.

However, regulated law firms were “already subject to substantial regulatory obligations with few dispensations granted to smaller firms”.

The disadvantage of imposing further regulatory obligations that “go beyond, or remodel” what was already there was that they increased the burden in terms of resource and costs.

“Some firms may have little option but to pass on the costs of this additional burden to consumers. The effect of the changes may be to dissuade other firms from operating either in those high-risk sectors identified by the Legal Ombudsman (LeO), or at all.

“Such negative outcomes would fail to meet the overriding objectives of the LSA [Legal Services Act], particularly in promoting access to justice and protecting and promoting the interests of consumers.”

The highest risk sectors of legal work in terms of second-tier complaints to LeO are residential conveyancing, followed, at a lower level, by wills and probate, and personal injury work.

The society described the evidence base for the LSB’s position as “unclear”, given that last year Legal Services Consumer Panel tracker survey found that satisfaction with legal services was running at 85%, while Solicitors Regulation Authority research revealed that a greater number of complaints were being resolved at the first-tier stage than in previous years.

“We suggest that given the above statistics, the unlikelihood that all complaints are capable of resolution at first-tier stage and the current trend of improvement, the impact of the proposed changes may be minimal.”

The society said it was particularly concerned by a requirement that a law firm’s complaints procedure must be “communicated to ‘each client’ in a format or formats tailored to a particular client’s needs”.

The response explained: “There is a risk that such measures may burden smaller firms disproportionately, many of whom employ larger numbers of black, Asian and minority ethnic solicitors and who may therefore be more negatively affected.

“Any associated costs of implementing such measures are likely to be passed on to clients, thereby defeating the overarching aim of increasing access to justice.”

The BSB said it appreciated the focus the LSB had given to fostering changes in first-tier complaints processes for consumers, to ensure they were empowered.

However, the proposed 12-month implementation period would “cause potential challenges, particularly around the expectations to collect and publish data as set out in the policy statement”.

The BSB would need time to “carefully consider the data that should be collected”, design and develop IT systems and issue training and guidance for BSB staff and for the profession.

Chambers would also need “time and resources to organise themselves to collect data in new formats, and to make that data available to the BSB”.

The Bar Council said the need to keep records of first-tier complaints received and measures taken “may create an unnecessary administrative burden” for the self-employed Bar, with “relatively limited benefits for lessons to be learned”.

A new requirement that information on the right to make a complaint is shared with clients at the conclusion of matter could also be challenging for self-employed barristers, because barristers might “repeatedly be instructed and/or reinstructed for self-contained pieces of work” in a case with no fixed timescale.

“Strictly speaking, each instruction is a discrete set of instructions. Would the barrister have to send notice of rights of complaint after every 10-minute telephone call for advice?”

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