The Jackson reforms, as recently enacted by the Legal Aid Sentencing and Punishment of Offenders Act 2012, have fundamentally changed the litigation funding landscape (see Sarah Trendell-Smyth’s briefing). Claimants’ funding options have been curtailed and this may well result in increased use of the services provided by the Legal Ombudsman (LeO).
Scope of the scheme
LeO is an independent and impartial complaints service. It is at pains to point out that it is not part of the legal profession and is independent of Government. It has wide ranging powers to receive, investigate and determine complaints and can award compensation up to a maximum value of £50,000.
LeO is relevant to lawyers and their insurers as its awards fall within the scope of cover. For instance, the Solicitors Regulation Authority (SRA) minimum terms and conditions of professional indemnity insurance specifically require insurers to cover amounts awarded by LeO (except where the determination involves the repayment of fees paid to the lawyer).
It is therefore in the interests of lawyers and insurers to ensure that complaints are handled properly and carefully from the outset.
Complaints in action
LeO’s mission statement refers to a scheme “that resolves complaints about lawyers in a fair and effective way”. By necessity, that means that the complaints procedure is straightforward, transparent and accessible to the public at large.
As claimants do not need the assistance of a lawyer to present their case, cost awards are, therefore, likely to be rare. LeO gathers information, considers the merits (LeO is not bound by legal principles) and makes a determination without necessarily receiving any representations from claimants’ lawyers. Welcome news indeed for claimants who might otherwise struggle to fund their claim and, surely, an incentive for increased use of the scheme, even if it is not the intended forum for claims as such.
There are now more than 1,600 law firms and barristers on LeO’s complaints list (which relates to firms/barristers who have been the subject of a formal determination). That has more than doubled since September 2012 when the list was first made public and it is reasonable to conclude that the list will continue to grow as claimants are attracted by the informality and costs neutrality of the scheme.
Avoiding LeO’s teeth
Effective and organised complaints handling is likely to have a positive effect on the outcome of client complaints. Lawyers are obliged to co-operate with LeO and need to engage in the complaints process wholeheartedly, involving insurers at an early stage where appropriate. LeO provides helpful guidance on the handling of complaints and refers to ten simple steps.
Those include providing a range of options for the resolution of complaints and acknowledging when things have gone wrong. Adopting some or all of those suggested steps is likely to result in reduced awards. LeO’s own scheme rules provide that an apology will not of itself be treated as an admission of liability.
There is a real incentive to get the process right. Potential claim payments can be minimised and stress and aggravation can be avoided. Insurers are likely to benefit from knowing about such matters, as opposed to finding out afterwards, not least because the outcome of a complaint that has not been ‘effectively managed’ can often be detrimental to any later negligence claim.