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April 2014 - Expressions of dissatisfaction - an update

Expressions of dissatisfaction – an update

We previously looked at the choices a client has between the Legal Ombudsman (LeO) and the route of civil liability claims involving the pre-action protocol for claims against professionals, with, ultimately as a last resort, the uncertain and pricey outcome of a court process before a Judge.

The talk in the past had been whether it is likely (and appropriate) that the limit for compensation should rise from the current £30,000. As Des Hudson of The Law Society said, the LeO was not intended to be a substitute for the courts.

£150,000?

Interesting therefore that the Legal Services Consumer Panel has very recently called for an increase to £150,000 for the compensation the LeO can award. It also seeks an increase in the £400 case fee levied by the LeO and the removal completely of the 'so-called' 2 fee free complaints that firms are currently allowed per year.

What is notable is the use of the language by the Consumer Panel to consider why these changes will be good for the consumer. Whilst the LeO suggests raising the £30K limit to £50K, the Consumer Panel sees no reason not to bring it into line with the Financial Ombudsman Service (FOS) of £150K. If we all thought that a rise of 66% to £50K was a leap, the potential rise of fivefold may raise even the most rigid of eyebrows.

The Consumer Panel apparently see a risk that consumers do not bring complaints because they perceive the value of those complaints to exceed the £30K limit and that the fee free element of cases may 'breed complacency among lawyers'. Whether this is the experience of law firms and indeed clients is no doubt a point to discuss.

6 Years?

As we touched on previously (Expressions of dissatisfaction - LeO v Civil Liability) the rather darker proposed change is to remove the limit of one year to complain, to replace it with six years from the date of the event (or three years from the date of knowledge). This would bring complaints time limits in line with civil liability limits so familiar to so many solicitors and lawyers.

Non-Clients?

What has caused recent surprise in the press is the other proposed change - that of opening up the complaints process to third parties and non-clients, to 'serve as an important deterrent against cold calling and other undesirable sales techniques'.

This may in practical terms bring a need for a more detailed tracking and recording of details of third parties and non-clients, so that a business has at least some recollection, even if only in a virtual sense, of a prospective client at any point in time in any six-year period (or longer potentially working on date of knowledge).

Whether the case law established over many years by the courts (indeed by the specialist higher courts) as to the extent of duty owed by lawyers to those other than clients will also be put in parallel for the LeO regime, is a moot point.

The potential at least therefore remains for consumers of legal services and indeed potential/prospective clients of law businesses/regulated legal activities to have a far wider remedy, without needing to satisfy the civil test of the balance of probabilities, aside from the rather more fundamental and often tricky hurdles of duty, breach, damage and the often fatal requirement expected of a claimant, causation.

We will keep you updated on this hot topic as it progresses through the coming year.

For further information on this and other topics or for a discussion as to how Wesleyan Active Risk Management can help your specific business:

Phone: 0800 107 8171

This article is a general guide and is not a substitute for professional advice. No responsibility can be taken for any loss incurred by anyone acting or failing to act on the basis of this article.

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