The Legal Ombudsman is seeking a budget hike and changes to its funding model.
- LeO faces a significant backlog of complaints due to increased demand.
- There is a proposal to double case fees for unresolved disputes.
- A shift in complaint culture is necessary to reduce demand.
- Efforts to improve service standards have not met expectations.
The Legal Ombudsman (LeO) is seeking a 10.2% budget increase to £19.8m for the 2024/25 financial year, citing persistent delays in resolving complaints. The organisation, which deals with complaints about legal service providers, faces a high demand that has contributed to a longstanding backlog.
A major concern for LeO is the queue of complaints, which peaked at 5,862 unallocated cases in 2021/22. Despite efforts to reduce this through reforms and an emphasis on early resolution, the numbers have not decreased as quickly as anticipated. LeO anticipates the backlog will still be at 1,949 cases by March 2026, exceeding its target.
To address these issues, LeO suggests doubling the current case fee from £400 to £800. This fee is levied when a complaint is resolved in the consumer’s favour, and the service provider is found lacking in resolving the issue independently. Most of LeO’s budget is funded by a levy on the regulated legal profession, which is being critiqued for inadequate service levels.
There is a call for a significant shift in how complaints are handled within the legal profession to alleviate pressure on LeO. The draft business plan suggests regulators and the profession should embrace feedback from LeO as a means to improve service, rather than dismiss it. However, data from 2023/24 showed no notable improvement in complaint handling, with 46% of cases indicating poor service.
The organisation’s performance, in terms of complaint resolution, has increased. While LeO has been able to resolve more complaints year after year, the growth in demand has outstripped resources. Despite these challenges, service transformation efforts have improved the resolution time for complaints, yet complex cases can still take up to two years to resolve.
LeO’s consultation document also discusses an optional £350,000 increase to develop systems using generative AI to publish full ombudsman decisions. This step is considered crucial for transparency but has been delayed due to anticipated challenges. The proposed budget also accounts for a 4% pay award, which contributes to a portion of the requested increase.
Though the consultation process is ongoing, LeO acknowledges that additional reforms in complaint culture and handling are essential for long-term improvements. The current performance levels, while improved, remain under pressure due to the persistent and unexpected rise in complaint numbers.
The backlog reduction is projected to shorten average case allocation times significantly, from 149 to 110 days, if the budget increase is approved. Without the increase, this improvement will be marginal, which underscores the importance of the requested funding.
The Legal Ombudsman stresses the need for increased funding and a cultural shift in complaint handling to effectively manage ongoing demand.
