Cain: Joining LeO in February
The Legal Services Board (LSB) has expressed “significant concerns about the viability” of the Legal Ombudsman scheme as it struggles to get its caseload under control.
LeO is seeking an 11.1% operational increase in its 2026/27 budget – plus another 1% to run a fundamental review of the scheme rules – but the oversight regulator cast doubt on the value of simply throwing more money at the complaints-handling body.
The Office for Legal Complaints (OLC) – the board that oversees LeO – is consulting on its funding [1] for the year from 1 April 2026 and put forward four possible increases on the current £20m budget.
These range from 6.7% for a minimum operating budget to 17.1%, which would help it make a substantial dent in the number of cases awaiting allocation to an investigator, a backlog which has dogged LeO for several years now.
The consultation recommended the third option of a 12.1% increase, or £2.4m, to reduce unallocated cases somewhat, in part through recruiting 26 new staff.
The LSB has to approve the final figure and an initial discussion paper presented to the most recent meeting of its full board said LeO’s work in recent years to improve efficiency meant there were few readily available efficiencies to be found.
As a result, “LeO’s primary option for meeting steep demand increases is to increase staffing and budget levels; effectively all of their budget options are on this continuum”.
Subject to the results of the consultation, the LSB said, “we do not consider that their recommended option of an 11.1% operational increase is likely to be justifiable as being value for money in the way that the budget acceptance criteria require given the more foundational, acknowledged concerns we have about the operating model.
“Members will also be mindful of financial constraints impacting public sector spending, our interest in supporting growth and care to avoid unnecessary increased costs for the legal sector.”
LeO began the current business year with a queue of 3,275 unallocated investigations and people waiting an average of 319 days for their investigation to start.
The LSB paper said: “While LeO has made significant progress in addressing its performance challenges from 2020/21, since 2023/24 LeO has struggled to reduce the number of unallocated investigations, largely due to ongoing rises in demand for its services.
“In 2024/25 LeO’s investigative resources were entirely allocated to dealing with incoming work rather than reducing the backlog.”
This was why the LSB approved an 11.4% budget increase [2] for the current year, but demand has continued to rise, by 26% year on year to 6,373 complaints accepted in the first six months of 2025/26 amounts.
This amounts to 1,049 more cases than LeO’s projected worst-case scenario.
LeO is predicting that the queue of unallocated investigations will be 3,378-3,754 on 31 March 2026, compared to 3,275 a year earlier and well above its worst-case forecast of 2,853.
The LSB paper said: “While the nature of complaint issues, e.g. delays and poor communication, remains largely unchanged, both the complexity and the number of issues raised in complaints have increased.
“LeO’s data also indicates that standards of service and complaints handling in the sector have not improved and in some areas, have worsened. Its analysis indicates a rise in demand across all areas of law, with residential conveyancing being a significant driver.”
The board noted that even the preferred funding option and most favourable demand forecast would leave LeO with a significant casework queue for at least two years into the future.
This analysis triggered the significant concerns about the viability of the LeO scheme as currently constituted.
“To that end, we recommend that the board explores with OLC/LeO representatives what is possible operationally within the confines of their option 1: a 5.8% (+£1,161,006) increase.”
The OLC will put its final budget proposal to the LSB for approval next March.
Meanwhile, Phil Cain has been named as the new Chief Legal Ombudsman following the departure of Paul McFadden to become the Scottish Public Services Ombudsman.
Mr Cain, who will join in February, is the operations director at the Gangmasters and Labour Abuse Authority. After a career in the Royal Navy, he spent over 20 years at North Yorkshire Police, latterly as deputy chief constable.