The Ombudsman's Corner

The Ombudsman’s Corner: September 2023

Our approach to unbundling

The idea of “unbundling” legal services has been discussed in the sector for several years. In a nutshell, it’s where a service provider takes on only those aspects of work that are reserved legal activities, with their client undertaking the rest. Work variously carried out by the Legal Services Board, Legal Services Consumer Panel and regulators has highlighted that this approach can provide flexibility, helping consumers afford otherwise unaffordable services, with the potential to increase access to justice.  

It’s understandable that unbundling may be particularly appealing in the context of the current cost of living crisis. Inevitably, despite the benefits for some consumers in some circumstances, things can and do go wrong. The case of Mrs F highlights the issues and complexities that can arise.

Mrs F was a beneficiary of the estate of her late sister, Ms J. She complained that she had been waiting for three years to receive her entitlement under the will, and felt that the firm involved had unreasonably delayed matters.

To save money, the lay executor of the estate, Mr J (Ms J and Mrs F’s brother) had instructed the firm on the basis that he would retain responsibility for the administration of the estate, but would instruct the firm to undertake certain tasks.

Ms J’s will left her house to her children, but also left a legacy to Mr J and Mrs F. When Mr J started to administer the estate, he learned that the house was the only real asset; Ms J had no savings or investments or possessions of value.

Mr J couldn’t apply for grant of probate until the estate’s Inheritance Tax liability had been paid. As he had no money himself to do this, he asked for the firm’s help in getting a loan. He then asked the firm to make the application for the grant of probate, and finally to convey the sale of the house, as this was Ms J’s children’s wish and to ensure legacies were paid.

Ms J’s house was large and located on a considerable plot of land, which she had also owned. Having established it was possible, Mr J decided to sell the house and land separately and applied for planning permission on the land so it could be developed. This was successful, but the process took more than a year. The house was then marketed for sale but failed to attract interest. It then went to auction twice, but each time failed to meet the reserve.

It was at this point Mrs F complained that the firm had cause unreasonable delays, denying her the legacy set out in Ms J’s will. The firm told Mrs F that she was only a legatee, rather than their client, so she had no standing to complain about anything they had (or hadn’t) done. Mrs F then contacted us.

Although Mrs F wasn’t a client of the firm, her complaint fell within our jurisdiction under our Scheme Rule 2.8, which says that a beneficiary of a will or trust can complain to us. The beneficiary doesn’t have to be a residuary beneficiary – pecuniary legatees can also complain.

However, we had to carefully consider the firm’s role in the matter. Mr J had wanted to retain as much control as he could – as he didn’t want to incur unnecessary fees which would reduce the children’s share of the estate. Because the firm had only been retained to undertake specific tasks, we were only able to consider the services they provided.

Our investigation found that, for the tasks they’d been asked to do, the firm had provided a reasonable service in a timely way. While Mrs F had waited a long time to receive her entitlement, we concluded that all the delays related to decisions made by Mr J about the sale of the estate’s property. On that basis, we didn’t uphold Mrs F’s complaint.

This case highlights our general approach to complaints involving unbundling, which is to look closely at the elements of service provided by the service provider and determine whether these have been reasonable. We’ll be mindful that some issues, while unfortunate, won’t be a consequence of a failing by the service provider but rather by the client, meaning the service provider can’t be held responsible.

As research in this area has highlighted, despite the benefits of unbundling, it does carry risks of ambiguity and confusion around responsibilities. This makes it all the more important that firms communicate clearly with the clients involved – including when clients complain, but ideally from the outset, to help prevent complaints from arising. Our free technical advice desk is on hand to talk through any questions providers may have about situations involving unbundling, so they can be resolved without being referred to us.

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.