The Ombudsman’s corner: recent changes – taking the right approach for each case
The Legal Services Act 2007, which set up the Legal Ombudsman, requires that we complete our work “quickly and with minimum formality”. Demand for our service has never been higher, and there have been significant waiting times for us to begin investigating complaints.
So, we have assessed our business model and implemented new processes and procedures to ensure that, wherever possible, customers and service providers receive a quicker resolution, which remains fair and independent. Firms that have had complaints referred to us over the past nine months may be aware of our new approach, but for those who are not, I wanted to explain what this involves.
For a range of reasons, not all cases referred to LeO require a full investigation. For example, there may be a fair and reasonable offer already on the table, or the parties may be open to negotiating a way forward. We have implemented a dedicated resource consisting of both investigators and ombudsmen who are looking at cases as we receive them to identify these opportunities, as well as working through the cases that we had previously received that are awaiting allocation to our investigators.
Firstly, whilst we have always undertaken jurisdiction checks at the outset to ensure that complaints fall within our scheme, we are now giving careful early consideration as to whether complaints that are received that are in jurisdiction are appropriate to investigate. We are particularly considering those cases that come to us with the service provider having made an offer to settle the complaint at first tier. If we determine those offers to be reasonable and if they remain open for acceptance, we are advising customers to accept those offers rather than go through our process to obtain the same outcome.
An offer is likely to be reasonable if, when looking at the complaints that have been raised, we consider that the that the remedy offered by the service provider at first tier suitably reflects the impact of any poor service and is unlikely to be exceeded through a LeO investigation.
Recently, I assessed a complaint about a property purchase. The customer had come to us complaining of delays and a failure to respond to enquiries about the purchase and to communicate generally. The purchase had completed on schedule, but the customer felt frustrated and upset by their experience and had raised a complaint. The firm had upheld many of the complaints and had offered the customer compensation of £450 to settle the complaint, an offer which remained open for acceptance.
I wrote to the parties explaining that the offer was reasonable in the circumstances and, if we went through our process, we would be unlikely to better what was already on offer. My decision was therefore that we would not investigate the complaint and instead the firm should pay the customer £450.
The customer wrote back to me to thank me for my decision. Although she had expected a full investigation, she had reassurance that the firm’s offer was reasonable in the circumstances, and she was able to obtain the settlement sum much quicker than she would have via our investigation process. From the firm’s perspective, they saved valuable time by not having to provide evidence and comment to us to enable us to investigate the matter.
In addition to assessing whether the matter is suitable for investigation, we have also implemented a team who are proactively engaging with customers and service providers to negotiate an appropriate settlement to the matter before cases are allocated to our investigators. Our team guide negotiations between the parties and have been hugely successful in obtaining agreement which satisfy both parties.
One example of this is a recent complaint we received in which the service provider was dealing with an estate. Unfortunately, the service provider distributed too much money to the beneficiaries, and when they realised their mistake, they asked those beneficiaries to return the necessary funds. The beneficiaries didn’t want to do this and complained. The firm apologised for the error but did not offer any remedy and threatened to take action against the beneficiaries to recover the overpayments.
When the beneficiaries brought their complaint to us, we decided that there had been some poor service and that compensation was justified to resolve the matter. Our team suggested to the parties that £200 should be paid to each beneficiary on the basis that it was not appropriate for the beneficiaries to keep the overpayment, but there was an impact which needs to be recognised.
Both the firm and the beneficiaries were happy with the outcome, which saved them both time and, in the case of the service provider, the work required in going through a full investigation.
Service providers have advised us that our guided negotiation process has provided learnings which will assist them in dealing with future complaints, particularly in relation to setting an appropriate and fair remedy for their customers. We encourage firms who are contacted by us to engage with our early resolution process as there are clear benefits to both them and their customers in doing so. Firms should also consider, when a complaint is received, what an appropriate remedy would be, as if we determine there has been a reasonable offer made, we would advise a customer to accept it rather than going through our full investigation process to get essentially the same outcome.
