Legal Ombudsman eyes major shake-up of rules to help tackle backlog

Davies: More balanced approach

Plans for major shake-up of the rules of the Legal Ombudsman (LeO), including reducing the time limit to bring complaints from six years to one, have been unveiled.

New powers to dismiss complaints earlier in the process are among the other recommendations.

The Office for Legal Complaints (OLC), LeO’s governing body, said the changes would provide the flexibility to resolve cases more quickly, against a background of complaints continuing to pile up at the start of the process.

LeO has been struggling for some years, with the growth of the pre-assessment pool – complaints accepted but not yet allocated to an investigator – the biggest problem.

Its draft 2022/23 business plan and budget predicted that the size of the pool would increase to 6,732 this March, rather than what had been an expected reduction below 5,000.

The expedited review of the scheme rules has identified several significant potential changes which have been put out for consultation.

The current requirement to bring a complaint within either six years of the act/omission or three years of the date of awareness was put in place to broadly mirror court time limits for contractual claims.

But LeO said it had “opened the door to complaints that cannot be properly investigated effectively due to the amount of time that has passed since the act or omission that was complained about”.

The new rule would change the limit to one year from the date of the act or omission being complained about, or one year from the date when the complainant should have realised there was cause for complaint.

Around 30% of complaints received in the last year could have fallen outside of this new limit, although there would be discretion to extend it if fair and reasonable to do so – such as a client not wanting to raise a complaint whilst their matter was ongoing.

The consultation said it was evident in some cases that there was little, if any, benefit in progressing to a full investigation. But the current rules say an ombudsman can only dismiss or discontinue a complaint after it has been accepted for investigation.

An ombudsman is currently asked to exercise their discretion to do so in around one in seven cases, a request approved 80% of the time.

The proposed new rule would allow an ombudsman to exercise their discretion, if fair and reasonable to do so, without the need to first accept it for investigation.

“Although the Legal Ombudsman accepts that some complainants will be unhappy to have their complaint dismissed so early in the process, from a customer experience perspective we consider there to be significant benefit in being able to provide a realistic assessment of the likely outcome of an investigation at the earliest possible opportunity.”

The ombudsman can currently exercise their discretion where satisfied the complainant has not suffered any financial loss, distress, inconvenience, or other detriment. The consultation proposed qualifying this threshold with the word ‘significant’, to introduce the principle of proportionality.

The OLC also wants to extend the rule that allows an ombudsman to dismiss a complaint if satisfied the complainant has rejected a fair and reasonable offer made during the lawyer’s internal complaints procedure, to cases where a complainant has rejected a reasonable revised offer made during the LeO investigation.

Another change would permit LeO to dismiss a complaint where its nature and scope, the volume of evidence, or the complainant’s conduct “is such that it would be disproportionate for an investigation to be carried out”.

The consultation explained: “The proposed new rule would only apply to a small number of complaints but those cases would be ones which are considered to be unreasonably, or unmanageably imposing and would absorb so much time and resource that it could be considered a disproportionate use of resource to investigate them.”

A further reform would allow LeO to dismiss a complaint if there has been undue delay on the part of the complainant; this would assist with cases where complainants sought to add issues they had not raised originally with their lawyer.

Around 40% of complaints are ultimately referred to an ombudsman to make a formal decision – a figure far higher than other ombudsman schemes. The final decision mirrors that the investigator’s recommendation in around 80% of cases and the OLC wants the power to delegate this decision-making.

While full delegation requires a change to the Legal Services Act, in the meantime the consultation proposed a new rule to enable an ombudsman to conclude that a final decision was not needed on a case if no substantive issues (such as an error in fact or law, or additional new evidence) have been raised in response to the investigator’s findings.

Such a case would be deemed to have been resolved by the investigator’s findings, but the ombudsman would have the discretion to pass a case for final decision anyway if, for example, there were vulnerability issues or there was significant public interest.

Service providers are currently charged £400 per case that reaches LeO, irrespective of how, or at what stage in its process, the complaint is resolved.

Though changing this would be a more involved process that required the approval of the Lord Chancellor, the consultation asked if there was any appetite for it to develop an alternative case fee structure that would motivate service providers to try to resolve complaints as early as possible in the LeO process.

OLC chair Elisabeth Davies said: “This important and necessary consultation is about removing obstacles to delivering improvements for customers.

“We want to be sure that the proposals we have outlined allow the Legal Ombudsman to achieve a more balanced approach to the resolution of complaints, whilst retaining the core benefit of accessing independent and fair legal redress.”

The consultation closes on 13 April.

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