A “wide-ranging” consultation on the Legal Ombudsman’s Scheme Rules has been launched to tackle what the Office for Legal Complaints (OLC) has described as a response to “unprecedented levels of demand.”
Driven by a 37% increase in demand in the last year alone, the Changes to Scheme Rules, case fees, and the publication of ombudsman decision consultation invites the legal profession to offer feedback on proposals to introduce a staged case fee, dependent on how involved LeO becomes in a complaint, along with changes to the Scheme Rules which would support clearer expectations and faster resolution
Changing consumer expectations and wider societal trends, including the growing role of artificial intelligence tools, are key factors in the increase in complaints, the LeO said. The ombudsman still sees issues with first-tier complaint handling amongst firms, which it says “amplifies the need for transformation in complaint handling, by both the legal sector and LeO itself.”
The staged structure would see a fee of £200 where early resolution is achieved, £750 if there is an investigation but no ombudsman decision, and £1500 if an ombudsman decision is necessary. An additional £400 would be charged if it can be established no final response to a complaint has been issued within eight weeks of the complaint being made to a firm, irrespective of the eventual outcome of any LeO investigation.
The ombudsman has previously consulted on changes to case fees and proposed a sizeable increase to £800 per case, before an “inflationary increase” of £400-£600 was proposed last year. LeO said that although the proposal was welcomed, it had been asked to explore “more radical changes to its case fee approach” in an effort to reduce complaint numbers and incentives better complaints handling at a firm level.
Proposed changes to the structure of case fees “should incentivise service providers to provide a final response to complaints within the expected eight-week period”, the LeO said.
Its own data showed that in 2025/26, 25% of those who submitted complaints said they had not been given a final response by their firms: “This hinders efficiency and proportionality, as these complaints can’t be considered for early resolution in LeO’s process, and instead have to go forward for a full investigation.”
The staged case fee represents a “polluter pays” model, the LeO says, whereby providers creating the biggest demand on LeO’s resources would bear a greater share of its costs. The impact is a reduction in overall contribution from the levy as increased revenue generated by case fees offsets the costs of running LeO.
The report explains: “Based on cases closed in 2024/25, under the existing regime LeO generated around £940,000 in case fee income – 5% of the overall costs of delivering LeO. This means that, in broad terms, the remaining 95% was covered by the levy contribution. If the proposed new case fee regime had been in place in 2024/25, then LeO could have generated nearly £3.5m in case fee revenue – about 20% of LeO’s costs for that year. So, the levy contribution borne by the sector would have only represented 80% of LeO’s costs.
“Those who had complaints considered and upheld by LeO would have also seen their levy contribution reduce – but would have seen the amount of case fees they had to pay increase quite significantly. So their overall contribution to the cost of delivering LeO would have increased.”
Further proposals include changes to Scheme Rules which would dismiss complaints where the impact is “trivial, inconsequential or theoretical”, and a 12-year statute of limitations on complaints.
In recent months the ombudsman has published decisions where there is public interest; the new proposals include provision for every final decision to be considered for publication on the LeO’s website.
Chair of the OLC, Ric Blakeway, said: “Legal services are operating in a changing and challenging environment and high-profile events have shaken consumer confidence. Fragile trust is reflected through unprecedented demand to the Legal Ombudsman. This amplifies the call for a transformation in complaint handling, by both the legal sector and LeO itself.
“This consultation seeks to encourage a shift in culture and ensure complaint handling across the sector consistently meets the standards consumers would expect.
“These proposals are also about ensuring LeO is operating as efficiently and effectively as possible, while reducing avoidable demand and strengthening accountability within the sector. Improving how complaints are handled at source is critical – both to delivering better outcomes for consumers and to building confidence in legal services.”
Chief ombudsman Phil Cain added: “The scale and pace of rising demand present a significant challenge for LeO’s current operating model, and we need to ensure we are maximising our operational capacity and focusing our resources where they can have the greatest impact.
“These proposals introduce stronger incentives for legal providers to engage with complaints at first tier and resolve them at the earliest possible opportunity. They also ensure that those providers who are not handling complaints effectively – and are therefore generating the greatest demand – contribute more towards the cost of the service.”
The consultation is open for 12 weeks, closing at noon on 2nd September. The OLC invites views from legal service providers, regulators, professional bodies, consumers and their representatives, to help shape the final approach.
