The Legal Ombudsman

Introduction

The Legal Ombudsman (LeO) has been established by the Office for Legal Complaints (OLC) under the Legal Services Act 2007 and its purpose is to ensure that consumers of legal services can access an independent and impartial Ombudsman scheme to resolve disputes with lawyers of all kinds, including solicitors, barristers, licensed conveyancers and legal executives. It will take over from a number of bodies, including the Legal Complaints Service and is expected to commence operations in November 2010.

The LeO will be overseen by the Board of the OLC, the chair of which is Elizabeth France. The Board has six members and has established two committees to help it fulfil its role of overseeing the running of the OLC and the creation of the LeO. These are an Audit and Risk Committee and a Remuneration and Nomination Committee.

The Audit and Risk Committee is responsible for ensuring the maintenance of appropriate audit and risk processes within the organisation and the governance of the internal audit and external audit programmes and the Remuneration and Nomination Committee is responsible for the overall remuneration approach and policy relating to all members of staff at the OLC.

Scheme Rules

The LeO will operate under the terms of some scheme rules, the aim of which is to ensure that users of legal services and their lawyers will have confidence in how complaints are resolved. The scheme rules themselves provide the framework for how disputes will be resolved and, drawing on the learning from complaints, will inform good practice. The rules will underpin the LeO’s decisions and process. They will deal with complaints that are made after the OLC starts operating – transitional arrangements for complaints in process of being handled under the existing arrangements being dealt with separately.

Details of the scheme rules will be found elsewhere on this web site as soon as they are finalised.

The LeO will, it is intended, be a more effective resource than the bodies which it replaces.

In particular it should be borne in mind:

• Because of the limitations upon who can complain through the LeO, the focus is going to be more in the direction of smaller practices than larger ones. The initial intention is that complainants must be
  • individuals,
  • micro-enterprises,
  • smaller charities, clubs, associations and trusts, and
  • personal reps of estates where the complainant has died.

  In other words large organisations of the kind represented in the main by city and larger provincial practices will not be eligible to use the scheme.

• All those in legal practice can be liable for the defaults of others. Thus, although a complaint must be about the act or omission of someone who was an authorised person at the time of the incident, the act or omission of an employee will usually be treated as the act or omission of the employer whether or not the employer knew or approved, and an act or omission by a partner is usually treated as an act or omission by the partnership.

The nature of the determinations and awards that the LeO may make.

It is likely that the LeO will have the power to make one or more of the following directions to the lawyer in favour of the complainant:

• to apologise,
• to pay compensation of a specified amount for loss suffered,
• to pay interest on that compensation from a specified time,
• to pay compensation of a specified amount for inconvenience/distress caused,
• to put right and pay for putting right any errors, omissions or deficiencies,
• to take and pay for any specified action in the interest of the complainant,
• to pay a specified amount for costs of the complainant (fortunately likely to be rare),
• to limit fees to a specified amount.

There is a limit of £30,000 on the total value of that which can be awarded in relation to:

• compensation for loss suffered,
• compensation for inconvenience/distress,
• reasonable cost of putting right any error or omission, and
• reasonable cost of any specified action,

but there is to be no limit on:

• interest on specified compensation for loss suffered,
• costs incurred by the complainant (if awarded),
• limiting fees to a specified amount, or
• interest on fees to be refunded.

Moreover, if the LeO feels there has been professional misconduct then the matter will be referred to the regulator.

Once a determination has been accepted by a complainant then the decision of the LeO is binding on the parties and final and the only recourse that would be open to the solicitor or other lawyer would be to have the process by which that decision was reached judicially reviewed. Given the cost of judicial review – this is unlikely to be an option in many cases.