Cain:
The Legal Ombudsman (LeO) will this month set out stronger incentives for lawyers to resolve complaints by reforming the operation of the case fee regime, Legal Futures can reveal.
It is also looking at further reforms to its scheme rules while work gets underway to radically change how LeO operates.
Ric Blakeway, the new chair of the Office for Legal Complaints, the body that oversees LeO, and LeO chief executive Phil Cain sat down with Legal Futures last week for their first interview.
LeO has long seemed an organisation in at least semi-crisis, especially with the backlog of complaints awaiting allocation to an investigator hitting around 5,000 at the turn of the decade and not coming down with anything like the hoped-for speed.
We have reported recently on how the Legal Services Board (LSB) – which approves LeO’s budget – denied it the 11.1% increase, or £2.2m, on its current £20m budget it had requested and gave it an alternative 6.5% (£1.3m) proposal [1]. Extra money has been set aside to scope out the transformation programme.
But, as a result, LeO said consumers could find themselves waiting more than a year [2] for the outcome of their complaint by 2028. Unallocated investigations are expected to hit 4,939 by 31 March 2027, and 7,602 the year after, which would be an unwanted record.
The problem, however, is not necessarily LeO itself. Its productivity has been steadily improving – but it cannot keep up with the rise in the number of complaints it is receiving.
This complaints wave, which both the Solicitors Regulation Authority and Bar Standards Board have reported too, is being seen outside of law in other consumer services as well.
Mr Cain said LeO handled around 8,200 complaints in the year to 31 March 2026 and was aiming to hit 11,800 in the present year. Much of this is down to the focus on early resolution, through which around 60% of cases are resolved within 90 days; the delays are caused by complex cases which require investigation.
But against this, LeO received 14,000 complaints in the last year and anticipates 17,000 in the current period. Since 2019, demand has gone up by over 170%.
Mr Cain said: “So irrespective of the fact that we’ve seen significant improvements in the speed that we are dealing with cases, it is not keeping pace with the volume of demand that’s coming through the front door…
“We need to transform from a technological perspective so that we can speed those processes up internally and then we need to maximise our use of scheme rules and case fees to support that direction of travel as well.”
This are the “levers” that LSB chief executive Richard Orpin talked about in our interview last month [3] that would help LeO manage its workload while the transformation programme was devised and implemented. This could take until 2030.
Last year, LeO proposed increasing the case fee [4] from £400 to £600 – payable when a complaint is upheld and LeO determines that the service provider did not take reasonable steps to resolve it before it reached the service – but then put that on hold [5] in November.
It is now firmly back on the agenda. The OLC will this month consult on a new approach that will reward those who agree to early resolution of the complaint but hit those who fight on (and lose) harder.
“Whatever income we derive from a case fee is offset against the levy [paid by all authorised lawyers to fund LeO],” pointed out Mr Cain.
“So if there is a higher case fee because we’ve had to invest more resources into a complex investigation or a final ombudsman decision, then those that deal with their complaints effectively pay a lower levy.”
This was fairer and “also incentives better outcomes earlier”, he went on. “I think that’s a really sound approach. We need to hear the views of people but the idea of driving behaviour change is one which all ombudsman should be looking at.”
The proposed scheme rule changes will not just look at how lawyers and LeO can do better, but also ensure consumers act properly in bringing them. But Mr Cain emphasised that this was not about throttling complaints – that would be antithetical to the whole ethos of ombudsman schemes.
The pair explained that handling more complaints was not simply a case of recruiting more staff – even if LeO had the budget to do that.
Mr Blakeway, who has taken the role after a well-regarded spell as the Housing Ombudsman, said the latter has had to expand to nearly 700 staff (more than twice the size of LeO). “I’m really clear from that experience that people are important and valuable but not the complete answer,” he said.
Mr Cain added that this had been the approach up until now: “Our operating model was designed 20 years ago and it’s been maximised.”
The scheme needed to be redesigned to take into account changes in society and technology “to make us fit for the future. And that’s where we’re aiming to take it over the next three years with our transformation programme”.
AI is part of both the problem and the solution. Mr Cain said LeO was seeing more complaints generated by AI, which was not always using or producing accurate information, and could make complaints more complex.
This meant untangling them was tougher for both legal services providers and LeO.
Equally, LeO is looking at how it could deploy AI from prior to a complaint even arriving at its doors – some kind of online triage sounds – all the way through elements like building an evidence bundle and reading documents to helping with an ombudsman’s final decision.
It will also play a role if LeO presses ahead with the longstanding idea of publishing a report of every ombudsman decision.
The second part of this interview will be published tomorrow