Regulation of the Legal Profession is about to change. These changes will have a significant impact on the lowest in value of the professional negligence claims made against the profession. Those solicitors dealing with complaints against their firms will need to have in mind the time limits for responding to complaints that the Ombudsman will apply.  The profession, together with their Qualifying Insurers will learn over time the approach that the Ombudsman will take to complaints.  That approach will shape and inform the way that the profession will need to apply in dealing with complaints that could become Ombudsman claims.

The LSA 2007 created the Legal Service Board, (LSB) this is the regulator for the entire legal profession.  The LSB appointed the board of the Office for Legal Complaints (OLC) and is empowered to set key performance targets for the OLC.  The new Ombudsman  will deal with all complaints against the legal profession, including barristers.  The following is on the basis of the draft rules, if implemented in their current form.

1.      Who can complain to the Ombudsman? Individuals, small businesses with a turnover of less than 10 staff and a balance of  EUR2million or less, charities, clubs and trusts with an income of less than £1million and personal representative of a deceased would-be complainant.

2.      What are the time limits for a complaint? Subject to the discretion of the Ombudsman, the time limits are six years from the date of the act/omission complained of or three years from the date of knowledge.  In addition, the complainant must complain within six months of receiving a response from a complaint made against the lawyer. However, that time limit will only be applied where the in-house response was made in writing and the existence and availability of the Ombudsman  service was prominently explained and the need to complain within six months, together with full contact details for the Ombudsman  have been provided by the lawyer.

3.      When can a complaint be made to the Ombudsman?  Generally the Ombudsman will require the complainant to exhaust the in-house complaints handling procedures of the lawyers about whom they are complaining. 

4.      What can be complained of?  Any act of an "Authorised Person" (a lawyer) can be complained of.  However, it does not have to be an act that is, or relates to, a reserved legal activity.  Importantly, the Ombudsman  will consider on a case by case basis whether a complaint, which includes a claim for professional negligence, is one the Ombudsman  scheme can deal with or whether the issue would be better dealt with in court.

5.      Will the Ombudsman consider every complaint on its merits? No type of complaint is expressly excluded, though the Ombudsman has power to dismiss a complaint without considering its merits if it is:

• frivolous or vexatious;
• no loss or distress or inconvenience has been suffered;
• it is the same as a previous complaint and no new evidence has been produced;
• a comparable complaint scheme or court has already dealt with the same complaint it concerns the exercise of a lawyer’s discretion under a will or trust or involves someone else who has not complained;
• is not practicable because of the lapse of time or involves an act outside England and Wales; and
• does not have sufficient connection with England and Wales.

6.      Can the Ombudsman  refer complaints to the Court? The Ombudsman can refer a particular issue to the court, in order to decide the whole question and it is not suitable for the court to deal with the whole complaint.  Also, where the lawyer requests and undertakes to pay all costs, and it is a test case, the Ombudsman  may but does not have to, dismiss the complaint without considering merits so that a court can do so.

7.      What powers of investigation does the Ombudsman  have? When investigating the Ombudsman may make directions as appropriate, take a decision of a disciplinary tribunal as conclusive, draw inferences from failure to provide information requested, include or exclude evidence that would be inadmissible in court.  The Ombudsman may require a party to attend to give evidence and produce documents and may enforce that requirement through the High Court. The Ombudsman may consult specialist lawyers on matters of specialist expertise.

8.      Will complaints always be determined on paper? The Ombudsman will not ordinarily hold hearings, but will do so if it is required to determine the complaint fairly.  A party can request hearings and must set out why a hearing is required.

9.      What awards can the Ombudsman make?

The Ombudsman can order the lawyer to pay specified compensation, put right the error at his expense, take specified action for the complainant at his expense, pay interest, apologise, limit fees (including a refund).  The compensation limit is £30,000 plus interest and costs.

Impact on claims against solicitors

Any potential Claimant with any claim of £30,000 and under has every incentive to make a complaint to the Ombudsman. The Claimant will be unlikely to have any costs liability and is not bound by the finding of the Ombudsman . So, they would be well advised to pursue claims under the scheme rather than through the Professional Negligence Protocol and litigation.  We do not yet know how Claimants will use the Ombudsman  service in the tactics of a larger claim.  Much is likely to depend upon the speed of the Ombudsman  decisions and the weight that the Ombudsman  will give to the legal arguments in any particular claim.

The Ombudsman will determine the complaint by reference to what is fair and reasonable in all the circumstances.  It will take into account, but is not bound by, the decision a court would make, rules of conduct at the relevant time and what ought to have been good practice at the relevant time.    

Central to producing the best outcome for insured firms will be demonstrating early and swift investigation of complaints leading to a substantive response as soon as practicable and within eight weeks of the complaint.  Otherwise, the lawyer will not be given the opportunity to exhaust the in-house complaints procedure before the Ombudsman  is prepared to look at the complaint. 

The legal profession will have to get used being judged by reference to the "fair and reasonable" test, as opposed to the legal standards of professional negligence law.