The Legal Ombudsman (LeO) is planning a 19% increase in its budget for 2021/22, and a further 6% the year after, arguing the scheme is currently in an “unsustainable position”.
It said that, without an injection of extra cash, delays in handling complaints will continue to lengthen, and reach nearly 11 months in around two years’ time.
LeO has a £12.8m budget for 2020/21 – a standstill budget after a disastrous attempt earlier this year  to secure a 20% increase – and we revealed last month  that it has made its first ever in-year call for supplementary budget, seeking an extra £344,000.
It is seeking £15.3m for 2021/22 and is forecasting a budget of £16.2m for 2022/23.
We have reported in recent months about LeO’s faltering performance, which Covid-19 has only exacerbated. The number of cases in the pre-assessment pool – complaints taken in but not yet allocated to an investigator – has been rising steadily and could reach 5,000 by the end of the financial year next March, meaning that complaints are taking longer and longer to resolve.
In her introduction to a consultation on the proposed business plan and budget  for next year, Elisabeth Davies, who chairs the Office for Legal Complaints – the board that oversees LeO – said the impact of Covid-19, “combined with the inevitable risks created by last year’s standstill budget and significant changes in leadership, has placed the scheme in an unsustainable position”.
A two-year recovery plan has been drawn up to address “the impact of repeated years of under-investment in people, failure to prioritise the quality of management, and an approach which has focused on short term gains, rather than sustainable change”.
But she said this alone would not be sufficient: “Additional resource is required to resolve complaints at a rate that meets current demand, addresses the additional impact of Covid-19, reduces the time customers wait for an investigation to start, and to ensure insight from casework is shared, enabling the sector to improve complaints-handling and tackle the root causes of consumer dissatisfaction.”
The consultation points out that LeO’s budget is almost 25% lower today than when the organisation opened in 2011.
“A broadly static budget for the last five years has delivered a broadly static output and has not enabled the scheme to keep pace with demand.”
LeO stressed that seeking an increased budget at the time when the firms and lawyers who would pay it were under pressure due to coronavirus was “not a decision taken lightly”.
But it said the last nine years showed “a direct link between funding levels and performance”.
The consultation also said that the lessons of the last budget-setting process had been learned – this year’s was “rigorous”, with more detailed forecasting, planning and consideration of different performance scenarios.
“In addition a full review of performance over the last two years has provided a much more informed picture of what changes have worked to provide sustainable improvements in delivery as opposed to short-term fixes.
“This review, combined with the planning and new forecasting work, shows that only minimal improvements will be achieved without the investment which is now being sought.”
The consultation said the additional budget, enabling more recruitment, should reduce the wait time for investigations to under three months by 2022-23 – without it, the wait time would be 10.5 months in 2022-23.
By August 2023, it went on, LeO should reach ‘break even’ – capacity keeping pace with demand with no or very minimal wait times.
Though even greater recruitment could speed this up, the consultation said this was not viable because of the “financial strain” some firms were facing at the moment.
The business plan also envisages running pilots on standardising LeO’s approach – by requesting a uniform core evidence pack from the outset, rather than requests being bespoke – and an adjudication approach which would streamline exchanges of information and comment from the parties.
LeO also plans to increase its engagement with the sector, doubling the number of remote complaints-handling courses, and scope and begin implementing the transparency project, which will see the organisation publish its full decisions, as well as annual reviews of the most complained-about lawyers and firms.