Complaints: Major reform of case fees
Law firms may for the first time have to pay a case fee for complaints dismissed by the Legal Ombudsman (LeO), under new proposals published yesterday that ramp up the notion of ‘polluter pays’.
Changes to its scheme rules will also give LeO power to reject complaints where the client cannot show they have suffered any detriment so that it “can focus on complaints where it can make a difference”.
LeO is also to press ahead with publishing all formal ombudsman decisions, while it has rejected the idea often floated by lawyers – most recently by Birmingham Law Society – of charging consumers a fee (Birmingham said £50) to complain.
Our exclusive two-part interview earlier this week with Ric Blakeway – chair of the Office for Legal Complaints, the body that oversees LeO – and LeO chief executive Phil Cain set the scene for the new consultation, whose goal is to reduce “avoidable demand”.
LeO cannot keep up with fast-increasing caseload and these measures are aimed at addressing this while work begins on a more fundamental transformation of how LeO operates.
Currently, LeO charges a case fee of £400 when a complaint goes against the lawyer and it is satisfied they did not take all reasonable steps to resolve it themselves at first tier.
The consultation proposes flipping this so that all cases accepted as being in LeO’s jurisdiction will be liable for a case fee unless a new waiver test is met.
This would be where the complaint is resolved in the lawyer’s favour or otherwise dismissed by LeO, and LeO is satisfied that the service provider took all reasonable steps to resolve the complaint at first tier.
If not waived, the fee would increase depending on the stage of the process where it was resolved: £200 at early resolution, £750 after investigation, and £1,500 after an ombudsman’s final decision.
This means that all complaints upheld by LeO would be subject to the case fee.
Further, if the provider did not issue a final response to a complaint within eight weeks of the complaint being made to them, they will be charged an additional £400 fee, irrespective of the eventual outcome. This would catch around a quarter of complaints seen by LeO.
LeO said the changes would encourage better first-tier complaint handling and, if the complaint reached LeO, its resolution at the “earliest appropriate opportunity”.
Early resolutions cost it on average around £500 per case, compared to around £2,000 for an investigation.
LeO generated around £940,000 in income on cases closed in 2024/25, 5% of its overall costs. The rest was covered by the levy that all authorised lawyers have to pay through their practising fees.
The consultation said that, if the proposed regime had been in place that year, it would have raised nearly £3.5m.
As a result, the levy would have had to cover 80% of LeO’s costs – meaning that those whose clients did not complain to LeO or whose complaints they tried to deal with properly, would likely see a reduction in their contribution to LeO’s costs.
On charging consumers to complain, the consultation said: “A fundamental principle of being an ombudsman scheme, and a criterion for membership of the Ombudsman Association, is that a scheme must be free to access.
“And although it isn’t a formal provision within the Legal Services Act, the explanatory notes make clear that ‘If the complaint is not resolved satisfactorily inhouse the consumer is able to bring complaints to the ombudsman scheme free of charge’.”
Introducing a fee for complainants would also “very likely disproportionately impact” those who could only access LeO because it was free. “Such a barrier to access to justice is unacceptable.”
The consultation also set out a series of proposed changes to its scheme rules:
- If a complainant cannot show evidence that they have experienced any impact or detriment from the alleged service failing, then LeO will not accept the complaint for investigation;
- Currently, complaints can be made within a year of the client becoming aware of a service failing – LeO proposed a long-stop date of 12 years from the failing;
- Consumers will have to use LeO’s online complaint form;
- Unacceptable behaviour from a lawyer in dealing with LeO will be treated as a conduct issue and referred to their regulator; and
- Clarifying the circumstances in which LeO will consider the complaint resolved by an investigator’s findings without an ombudsman’s decision, even if a party wants one.
LeO said it intended to move away from only publishing high-level statistical data “towards a position where every ombudsman final decision will be considered for full publication on LeO’s website”.
But there needed to be “a considerable amount of work” to ensure LeO could safely and accurately publish its decisions. “Approving a revised policy is the first step on a path to full publication – which is unlikely to happen before 2027/28.”
Mr Blakeway said: “This consultation seeks to encourage a shift in culture and ensure complaint handling across the sector consistently meets the standards consumers would expect.
“These proposals are also about ensuring LeO is operating as efficiently and effectively as possible, while reducing avoidable demand and strengthening accountability within the sector.”
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