Complaints: LeO to encourage lawyers to resolve client concerns themselves
The Legal Ombudsman (LeO) has been given a budget for its next financial year that it says will not be sufficient to meet its operational or strategic needs.
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.
The LSB also approved a further £300,000 spending on external consultants to review how LeO could be modernised and raised the prospect of it seeking further budget mid-year to take the outcome forward if deemed acceptable.
In the meantime, LeO will ratchet up efforts to encourage lawyers to resolve complaints themselves, such as by looking at a ‘polluter pays’ case fee structure and publishing all ombudsman final decisions.
The LSB’s verdict came against a background of both bodies agreeing that – in light of fast-growing demand for LeO’s service that even its improved performance could not keep up with – the current operating model was “unsustainable”.
The latest forecast is that LeO will receive 17,675 new customer complaints in 2026/27, compared to a projected 14,186 in the year to the end of this month and 10,447 in 2024/25.
The approved budget, which runs from 1 April and is paid by all authorised lawyers through their practising fees, will see the already large backlog of unallocated complaints grow to between 5,000 and 6,700 over the year – which would be higher than it has ever been.
The average wait time for complaints in the backlog would increase to 330-390 days, compared to an average current wait time of 257 days.
The Office for Legal Complaints – the board that oversees LeO – told the LSB that, without the 11.1% increase, its backlog would grow to “an unacceptably high level over the next two years, risking reputational damage and jeopardising the start of the newly transformed scheme”.
But it acknowledged that this would not be enough to bring down the backlog or customer journey times it hoped for when it issued a consultation [1] on its plans and budget last year.
The LSB decided it would not provide value for money “to significantly increase spend on a model that is no longer considered appropriate”, especially as the extra £921,000 that 11.1% represented would not make a big improvement to the backlog or wait times.
Instead, funding should be “focused on transformation”.
LeO committed to do everything it could to improve the efficiency of its own operations and to reduce demand, whatever budget it received.
The LSB was told: “LeO intends to make rapid changes with the highest potential to limit the impact of accelerated demand from below standard service provision and/or poor first-tier complaints handling.
“This could include: changes to LeO’s scheme rules, adopting a ‘polluter pays’ case fee structure, and utilising AI to facilitate the publication of all ombudsman final decisions.”
However, a new case fee structure would probably not be ready until 2027/28 at the earliest.
As well as the £300,000 for external consultants, the OLC sought £600,000 to fund the design phase of whatever they propose.
The LSB was advised to reject this and instead recommend that the OLC seek an in-year funding request. “This will allow the OLC to fully consider and incorporate the outcomes of the discovery phase in their budget request for future phases of the STR [scheme transformation review].
“In turn, the board will have the information required to properly assess whether the requested funds will provide value for money.”
The full reasons for the LSB’s final decision have yet to be published.