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LSB: Regulators need to get tough with lawyers over poor complaints handling

Neil Buckley [1]

Buckley: “further action is needed”

The Legal Services Board (LSB) is set to instruct the frontline regulators like the Solicitors Regulation Authority and Bar Standards Board to get tough with lawyers who do not handle client complaints properly.

Draft guidance published for consultation yesterday said that they could stage “supervisory interventions” to improve a firm or individual lawyer’s complaints-handling procedures.

Back in 2010 the LSB set out what it expected regulators to do about first-tier complaints (that is, complaints dealt with at firm/individual level) and is now reviewing this.

It said there was evidence that their goals, as laid out in 2010, have not yet been “widely achieved for clients in practice”.

These were that consumers have confidence that complaints-handling procedures provide effective safeguards for them, and complaints will be dealt with comprehensively and swiftly, with appropriate redress where necessary.

Research has found that many lawyers still do not tell clients about either complaints-handling procedures at the point of instruction or at the first meeting, as they are meant to do. And while successive Legal Ombudsman (LeO) customer satisfaction surveys showed an “improving trend” in the percentage of clients that heard about the organisation through their lawyer, the figures remained low – 23% in 2013-14.

The LSB said its initial assessment of the progress in the five years since the requirements were put in place revealed that “low consumer recall” of the LeO scheme could indicate that its requirements “did not reflect consumers’ needs” or poor compliance by lawyers.

Updating the LSB requirements and supporting guidance “could potentially address these issues”.

While the requirements themselves are set to change in only minor respects, the LSB is proposing a significant rewrite of the guidance.

The draft calls on the regulators to set “clear, concise guidance” which should reflect current best practice for communicating with clients, including client-care letters.

“Approved regulators should satisfy themselves that authorised persons understand and are effectively delivering those arrangements.”

It then ratchets up what is expected of the regulators in monitoring what lawyers get up to. They should gather data on first-tier complaints-handling processes and also analyse data from LeO on complaints that then reach it.

“This analysis can provide approved regulators with an evidence base to develop regulatory responses to improve outcomes for clients. These may include: supervisory interventions for authorised persons to improve complaints-handling procedures; thematic reviews of recurring issues, which may results in changes to approved regulators’ regulatory arrangements for complaints handling, supporting policies and guidance; and promoting best practice observed during data analysis.”

The draft guidance also urges the regulators to share their work with each other to reduce “poor practice” across the legal market.

Neil Buckley, chief executive of the LSB, said: “Improving complaints handling was one of the LSB’s three main priorities at its inception.

“However, evidence collected since 2010 suggests that, while the outcomes specified by the LSB in this area are still relevant and uncontentious, they have not yet been fully achieved; further action is needed.”