The Ombudsman’s Corner: 15th November 2022

Legal Ombudsman’s Scheme Rules April 2023

Aside from a couple of minor amendments and additions made back in 2012, our Scheme Rules have not changed from the date that I started my career at the Legal Ombudsman in January 2011. Last year, we decided to undertake a thorough review of them ahead of a two-stage change process, making necessary changes to enable us to better deliver an efficient and effective Scheme which will have benefits to both service providers and their clients.

For the first stage of the review, we identified changes which we wanted to make regarding our time limits, our discretion to dismiss or discontinue cases which fall within our jurisdiction and our rules relating to escalating a complaint to an Ombudsman for a formal final decision, as well as capturing typographical changes and re-drafting rules to support the delivery of the Scheme. Our second stage review, which we are planning to consult on in 2023 ahead of implementation in 2024, will look at our case fee structure and our ability to delegate aspects of our work to further support the efficient delivery of our Scheme.

I want to concentrate this month on our stage one review, as we consulted on this in April 2022 and, after having received positive and constructive feedback from a range of stakeholders including regulators, service providers, consumer bodies and members of the public, we made the decision to revise our Scheme Rules on 1 April 2023, implementing most of the proposals set out in our consultation paper.

Our time limits

The major change that we are making is a revision of our time limits. Our current rules say that we can accept complaints where the act or omission took place in the last six years and if this was not the case, the complainant must have become aware of the issue within the last three years. We only have discretion to accept out of time complaints in exceptional circumstances.

From 1 April, our time limits reduce to only accepting complaints where the act or omission took place in the last year, and if this was not the case, the complainant must have become aware of the issue in the last year. However, we are changing the level of discretion we can exercise in order to accept out of time decisions to what is fair and reasonable in all the circumstances.

Why are we doing this? Well, we have consistently found difficulties in undertaking complaints on cases where the matter took place several years ago – documents may not be available, and the lawyers who dealt with the matter may have moved on. We only want to accept investigations where we can undertake a fair and appropriate investigation and come to a fair determination of the complaint. We are however mindful that we want to be fair to complainants, which is why we are reducing the discretion test and investigate complaints which do not fall within our time limits when it is fair and reasonable to do so.

Reasons to dismiss or discontinue complaints

Secondly, we are setting out some new rules on how and when we may choose to dismiss or discontinue a complaint which is within our jurisdiction. We are not giving ourselves new powers here – we have always had the discretion to dismiss a complaint where there is a compelling reason to do so, but we want to be clear to our customers by setting out additional circumstances in the rules which constitute a compelling reason.

We are therefore including new rules which say that we may dismiss or discontinue a complaint where we determine there is no significant loss or detriment arising from it, or where the complaint is so large or complex that it prevents us from undertaking an investigation in line with our obligations under the Legal Services Act which says we must do so “quickly and with minimum formality”.

In respect of complaints where there is no significant loss or detriment, we would dismiss these in circumstances where the level of alleged detriment is so minor that it would not be an appropriate and reasonable use of our time putting the case through an investigation process to an ombudsman’s decision. A real example was a case where the only complaint was that the firm had failed to empty a litter bin in the meeting room in which they held a meeting with the client – he referred to “rotting apple cores” which he found “disrespectful” and wanted compensation for. The level of alleged detriment here was so minor that it is not really an appropriate use of our time and resource to investigate.

At the other end of the spectrum, we see matters which are so complex, have so many complaints or where the amount of evidence is so large that it is simply not an appropriate use of our resource to investigate. An example was where a firm were administering an estate and the beneficiaries complained, raising 155 different complaints and providing over 8,000 pages of evidence. We do not have the resource to investigate this size of complaint, which contained many complex issues.

We would also seek to apply this rule where it is the case where the complainant’s behaviour is such that it prevents us from undertaking an appropriate investigation – in one case we were receiving multiple telephone and email contacts per day which, when not responding to, generated many complaints about our service. We would apply this rule after warning the complainant about their behaviour and asking them to change it.

In addition to the rules surrounding proportionality, we are also bringing in a new rule to allow us discretion to dismiss complaints which are added to existing investigations where the complainant should reasonably have known about the issue at the time which we accepted the complaint for investigation. We sometimes find that complainants add in new complaints when we inform them that we cannot uphold the complaints they have initially raised and which we agreed to investigate, which is unfair to service providers.

Discretion to decline to issue a formal ombudsman decision on a complaint

The third major change we are making to our rules is to require complainants who reject our investigator’s findings and Case Decision to provide material reasons why they disagree and want a formal ombudsman decision on the complaint, and in the absence of those material reasons we have discretion to determine that the complaint is resolved by way of the Case Decision.

Previously, the complainant had the right to request a formal decision in all circumstances if they reject the Case Decision and sometimes request this just as an appeal against the Case Decision with no reason other than they do not agree with the findings. We do not consider it an appropriate use of our resources to issue a formal decision unless there are material comments to consider and address.

The rationale for our changes is to be fair to both complainants and service providers and deploy our resources in the most efficient and effective way. I appreciate that you may have questions and queries about our new rules and how they affect you as service providers, and what I would say is that I am happy to address these via our Technical Advice line which you can contact at Technical.Advice@legalombudsman.org.uk.

Read more stories

Join over 6,000 wills and probate practitioners – Check back daily for all the latest news, views, insights and best practice and sign up to our e-newsletter to receive our weekly round up every Friday morning. 

You’ll receive the latest updates, analysis, and best practice straight to your inbox.

Features