Inform clients of cost increases or face sanctions, states Legal Ombudsman

Yesterday the Legal Ombudsman revised their guidance, reminding lawyers that they must tell clients the ongoing cost of their service. Failing to do so, could result in complaints made against them.

One in ten complaints referred to the Legal Ombudsman’s Office are on lawyers’ bills, and general disgruntlement surrounding costs features in many more. One area that is raised in complaints, is surrounding the lawyer’s standard of communication, either by lack or quality (or both) of the information on costs.

The revised guidance has been prompted not only by the complaints received but also by a series of recent high-profile court cases over the cost information clients are being given, and as a result the Legal Ombudsman has decided to revisit their guidance from the second edition back in 2014.

The third edition of the guidance does highlight that the Legal Ombudsman’s position on costs issues remains unchanged and that a client should never be surprised when they receive their bill.  What has been added however, is information surrounding what the Ombudsman believe to be reasonable service.

The Ombudsman also highlight how the quality of cost information is especially important, stating that given a considerable amount of people who are engaging with legal services are experiencing stressful and difficult situations, cost information needs to be clear. The revisited guidance has been drafted to help lawyers deliver a service that reflects the individual client’s needs.

The updated guidance now states that it is “not enough for a lawyer to agree the possible cost of a service at the outset”. The Legal Ombudsman receive many client complaints stating that at no stage were they updated on costs increasing or given the chance to try and control costs.

Going forward it will be essential that lawyers do keep clients informed about cost of the case on a regular basis, and in the case of a complaint, the Legal Ombudsman may look for evidence from the lawyer that this has been undertaken. Taking this one step further, they will also want to see evidence that lawyers have consulted their clients on how to manage any potential cost increases, or what their options might be and potential next steps, if and/or when that situation may arise.

Where changes in the case or situation arise (and that can occur for a multitude of reasons) the Legal Ombudsman will be expecting the lawyer to have explained the change clearly, as well as provide further options, and then provide either estimated or real costs. The lawyer MUST also ask for instructions on how the client wishes to proceed off the back of the costs conversation. In the case where the lawyer genuinely feels that there is only one reasonable option for the client to follow in terms of next steps, instructions from the client must still be sought, and they should not make that assumption on the client’s behalf.

The revised guidance does recognise that cost increases can and will sometimes be down to an unexpected development, change of circumstances or the client’s own behaviour. That being said, the lawyer needs to have evidence to show that these issues were raised to the client during the course of the service and cost increases had occurred, or next steps and estimated costs were outlined, and that the client gave instructions.

Read the revised guidance here.

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