LEGAL OMBUDSMAN – CHANGES TO SCHEME RULES

The Legal Ombudsman (“the LeO”) has been under considerable pressure to improve its performance in recent years. Complainants and law firms have experienced significant delays writes

Jayne Willetts Solicitor Advocate of Jayne Willetts & Co Solicitors Limited.

For example, there has been a backlog of cases in its Pre-Assessment Pool with the average waiting time is 7 months for low complexity matters and is much higher for medium & high complexity matters. The delays have been caused by a myriad of factors including the pandemic and recruitment problems. Progress has & is continuing to be made by the LeO leadership team.

Part of the improvement plan has been a review of the Scheme Rules in order to identify opportunities where the LeO could improve its operational efficiency. A consultation took place between February & April 2022 and the final proposals were approved by the Legal Services Board in July 2022. The amendments to the Scheme Rules will go live on 1 April 2023.

A summary of the main changes is set out below so that firms can begin thinking about their in-house preparatory work. Also, please bear in mind that the LeO will be publishing guidance, factsheets, FAQs and templates on its website so practitioners will need to keep a weather eye out for these documents in early 2023.

Reduced time limits – Rule 4

The most significant change is the reduction in the time limit for referring a complaint which will be no later than:

• one year from the date of the act or omission being complained about (reduced from six years) : or

• one year from the date when the complainant should have realised that there was cause for complaint (reduced from three years)

The LeO will retain the ability to apply Rule 4.7 which allows an Ombudsman to exercise discretion to extend the 1-year time limit if it is fair and reasonable to do so.

Interestingly, when the LeO was originally set up in 2010, the time limit was 1 year and the maximum award of compensation was £30,000. In 2013, the time limit was extended to the present time limits of six years from date of complaint and three years from date of knowledge. The maximum award of compensation was also increased to £50,000. The intention at the time was to put the LeO in a position to handle lower value professional negligence claims – with the six-year time limit and the £50,000 maximum award. So, the reduced time limit from 1 April 2023 will be a return to 2010 time limits.

Work for law firms – communication & changes to documentation

Firms will need to inform their clients of this alteration to the rules. A letter to existing clients on or about 1 April 2023 will be required. For new clients then the revised time limit should be incorporated into the retainer documentation for all new retainers post 1 April 2023.

Other amendments will need to be made to internal Complaints Procedure policies to include all versions whether printed or electronic or on websites. Another amendment should be to the Complaints Information Section printed on invoices.

Dismissal if loss/detriment minor – Rule 5.7 (b)

The LeO has always had the power to dismiss a complaint if there had been no loss or detriment to the complainant. For example, a complaint that a law firm had failed to return a single telephone call would fall into the category of no loss or detriment. However, where the loss or detriment is minor as opposed to non-existent, the LeO has been obliged to undertake a full investigation. From 1 April 2023, the word “significant” will be added to Rule 5.7 (b). This change allows an Ombudsman to consider whether it is a proportionate use of resource and time to investigate a complaint where the detriment to the complainant is not significant.

Dismissal due to size & complexity –Rule 5.7 (p)

This new rule will enable the LeO to dismiss a complaint on the basis that the size and complexity of the complaint means that it would be disproportionate for it to be investigated. The LeO has cautioned that this new rule would only apply to a very small proportion of cases and then only to those where it is considered disproportionate, unreasonable, or even impossible for the Leo to investigate the complaint. Further guidance is awaited from the LeO on the application of this rule.

New issues excluded from existing complaint – Rule 5.7 (q)

Another brand-new rule is being introduced to exclude new issues being added to an ongoing investigation if they were already known to the complainant at the time the investigation commenced – but were not included at that time. On occasion, complainants who anticipate that the outcome of a complaint is unlikely to be in their favour seek to augment the original complaint with additional issues. This results in delay and frustration for the law firms involved so this new rule is a helpful introduction, provided it is robustly applied.

Welcome changes

These amendments to the Scheme Rules are to be welcomed in a move to streamline the complaints process and to exclude from full investigation certain categories of complaints. The time limits in particular will ensure that those complaints which are referred to the LeO will be fresh in the minds of both the complainant and the law firm. There will also be less likelihood of files having been archived or even destroyed. The other changes will assist the LeO case handlers to process cases more quickly. The current delays damage the reputation of the profession and these changes are definitely a step in the right direction.