Complaints: Major fee changes mooted
Plans by the Legal Ombudsman (LeO) for big rises in the case fees it charges law firms risk creating the impression that they are “being used as a punitive tool”, the Law Society has warned.
The society said it did not consider it “fair” that firms should be charged a fee even when complaints were dismissed and said this could encourage them to “make commercial settlements regardless of the merits”.
LeO launched its plans for case fee increases in June, alongside other changes which would enable it to reject complaints where there was no evidence of detriment and introduce publication of all formal ombudsman decisions.
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.
There would be an additional fee of £400 where firms failed to issue a final response within eight weeks of the complaint being made.
The society said it was not clear how LeO had arrived at figures, and was concerned that they were “excessive, disproportionate and unfair”.
In its case fee consultation in 2025, LeO had “indicated that a case fee of £600 represented an appropriate and reasonable level, a position with which we agreed”.
The society went on: “Without a clear cost-recovery rationale, the proposal risks creating the impression that case fees are being used as a punitive tool rather than as a proportionate contribution towards the operation of the scheme.”
The proposed regime created “a strong commercial incentive to settle complaints early, concede ground, and avoid escalation”, which may be “particularly significant for small firms”.
The society said it supported the dismissal of claims where there was no detriment, but opposed the publication of all ombudsman decisions, as it was concerned by “the resource implications at a time of sustained operational pressure”.
Mark Evans, president of the society, commented: “There is a real risk that the proposals will encourage firms to settle complaints regardless of merit, simply because it is cheaper than pursuing a legitimate defence. This would be unfair to legal providers and would distort the purpose of the complaints system.”
Meanwhile, the society has questioned whether changes planned by the Solicitors Regulation Authority (SRA) to first-tier complaints handling are necessary.
These would require law firms to give clients a timeline for resolving complaints and provide them with regular updates.
Instead of a fixed timeline, the society said firms should be allowed to provide “an estimated timeframe which can be updated as the complaint progresses”, which would “promote transparency while recognising the varying complexity of legal complaints and the practical realities faced by firms”.
The society was also opposed to a “blanket requirement for firms to provide regular updates on all complaints”.
Complaints varied “significantly in complexity and duration, and a prescriptive requirement to provide updates at fixed intervals risks creating a compliance exercise rather than encouraging meaningful communication”.
The society went on: “An outcomes-focused approach based on estimated timescales and meaningful, proportionate updates would better balance consumer expectations with the practical realities of dealing with legal complaints.”
The society said it regarded guidance on complaints generated by AI as a priority.
The SRA should “explicitly recognise the need for proportionality when firms are responding to AI-generated complaints. Firms should be encouraged to focus on the substantive issues raised rather than being expected to respond line-by-line to lengthy AI-produced submissions”.
Mr Evans added: “We support the SRA’s intention to improve first-tier complaints handling, but urge the SRA to consider whether now is the right time to introduce new requirements. Existing rules already require complaints to be handled promptly.”
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