Blakeway: Vision 2030
The Legal Ombudsman’s (LeO) budget is set to rise by 6.9% next year but the levy on lawyers to pay for it will fall because of the stronger ‘polluter pays’ regime of case fees.
The news is against a background of fast-rising complaint numbers, with the 21,210 expected in 2027-28 outstripping LeO’s capacity to resolve them, which operational improvements mean should rise to about 15,500 a year.
Its inability to keep up is why the Office for Legal Complaints (OLC) – the body that oversees LeO – has decided to press ahead with reforms it consulted on in the summer [1].
The OLC published [2] its draft 2027-30 strategy and 2027-28 business plan for consultation yesterday and included its response to the earlier consultation.
The most contentious element concerned case fees. Currently, LeO charges £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.
This is to be flipped 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 will be where the complaint is resolved in the lawyer’s favour or otherwise dismissed and LeO is satisfied that they took all reasonable steps to resolve it.
If not waived, the fee will increase depending on the stage of the process where it is resolved: £200 at early resolution, £750 after investigation, and £1,500 after an ombudsman’s final decision.
The Law Society said [3] this could encourage solicitors to settle meritless complaints.
In 2025-26, LeO found poor service in 72% of complaints with investigative outcomes and poor complaints handling in 46%.
There will be an additional fee of £400 where lawyers failed to issue a final response within eight weeks of the complaint being made. This will no longer be a binary matter following the responses to the consultation, as LeO will consider if there are circumstances that made a response in that period impossible.
The other reforms are scheme rules changes to help it focus on complaints involving “real impact or detriment” and work on publishing all ombudsman decisions in full, likely to be in 2027-28.
LeO said customer journey times would be shorter, with more than 80% of cases resolved within a year, and more than 70% within six months.
Some 94% of LeO’s income comes from a levy on all regulated lawyers through their practising fees, but case fees generate around 5%. Its budget for the current year is £21.3m and the OLC has proposed a 6.9% rise to £22.8m, mainly for increased staff costs.
It estimates that case fee income could fund 20% of that, meaning that the levy contribution could fall by up to 10%.
New complaints to LeO increased by 37% in 2025-26 alone and are forecast to rise by a further 26% in the current year and another 20% to 21,200 in 2027-28 – which would mean numbers had doubled in three years.
However, it warned that this could be even more if lawyers did not respond to LeO’s “preventative learning and insight work”. It said “a significant shift in complaint culture, led by regulators and the profession, is required to address the unnecessary escalation of complaints”.
On 31 March 2027, LeO expects to have 12,260 complaints in queues at various stages of its process. A year later, 15,169 is the predicted number.
In a joint introduction to the draft plans, OLC chair Ric Blakeway and LeO chief executive Phil Cain wrote: “With the current operating model capable of resolving around 15,000 complaints a year, incremental improvements in productivity will not close that gap. The solution cannot be repeatedly adding additional people and cost to the same model.
“The sustainable answer to rising demand is not an ever-larger ombudsman service.”
They said the Vision 2030 strategy aimed to create a service “that is proactive in preventing complaints, efficient in resolving complaints, systematic in learning from them, and influential in helping others address risk and root causes”.
As well as the general need for lawyers to deal with complaints better, and the use of AI in clients making them, LeO said another potential driver of numbers was consumers unhappy with both the advertising of and service received from legal providers relating to unfair car finance commission.
“While volumes are low, they have increased during 2026-27, and LeO has also begun receiving complaints relating to exit fees and multiple representation arrangements.
“The scale of potential consumer detriment and the upward trend could suggest this area will be a significant driver of future demand.”