Solicitor pays out for poor costs information in first ever ombudsman decision

Sampson: decisions are not the product of a machine

The Legal Ombudsman (LeO) service has issued its first formal decision, it has emerged.

The first case to go all the way through to a final decision by an ombudsman concerned a complaint over delay and whether the costs were explained clearly.

The ombudsman decided that there was no delay and the firm had acted reasonably, “but the explanation that the costs might increase over time could have been handled better”. It ordered that the solicitor pay the client £150.

Chief ombudsman Adam Sampson explained that there was then a delay on LeO’s side in communicating the decision as it had to decide how best to report it to the parties, as the focus had been on getting the early stage of complaints-handling right.

He said: “In the end, we decided to go for a personalised letter from the ombudsman taking the decision [which was not him], addressed individually to the complainant and the lawyer. It is certainly a bit more of a palaver for us. But it is in keeping with our preference for informality and direct communication. LeO is not a machine dealing with a host of identical issues.

“People’s complaints are very personal and they need to know that they have been looked at on an individual basis. They may not like the answer – the decision we have just made doesn’t give the complainant everything she wants but it does give her more than the lawyer thinks is reasonable. But at least they know that the decision is the product of an individual, rather than a machine.”

The complainant, Ms X, was about to buy two properties in Europe when she discovered that the developers had not built the homes to the required specification. She instructed a solicitor based overseas but regulated in England and Wales. Given a costs estimate at the start, with one amount for initial advice and negotiations, and an additional figure if the case went to court, Ms X engaged the solicitor’s services.

When negotiations broke down with the vendors, Ms X was told that the court costs would be £2,500 more than she was originally advised. When she asked why, her lawyer told her that her case had generated more correspondence than usual. He explained that as that was likely to continue, the price had to rise. She complained.

Ms X said she would not have employed the solicitor if she had known the price would increase. Dissatisfied with his response to her complaint, Ms X complained to LeO, adding that as well as the increase in costs for taking the case to court, she was also unhappy with the price charged for the work already carried out.

Ms X was not satisfied with LeO’s initial recommendation that the service was reasonable but the costs information was not as good as it could have been; she wanted more money back from her solicitor and asked for an ombudsman’s decision.

LeO reported: “The result was that our ombudsman agreed with the recommendation originally made. We decided that the lawyer should pay Ms X £150 in recognition of the inconvenience caused by this inadequate costs information. The lawyer agreed to this and has assured us that the firm had started to issue client-care letters as a result of our involvement.”


    Readers Comments

  • Why is it that when professionals are fined it is a paltry £150? I had the same problem with the Financial Services Ombudsman when I took a complaint about my bank to them. The FSO, after 5 months, offered me the same amount as my Bank did: £150. The amount is ‘peanuts’ to these people and should be reviewed – upwards. It serves as no deterrent to them. I am most disappointed that we are continuing with kid-glove handling of these so-called professional people who wreak havoc on vulnerable members of the public, after all the hype about what wonderful things the Legal Services Act 2007 promised us.

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