Ombudsman backs redress extension for all legal services users

The Law Gazette

9 October 2020

The Legal Ombudsman has told competition overseers that the time has come to allow complaints from clients of unregulated providers.

The ombudsman said this week that there is sufficient evidence to show that that current differentiation between the regulated and unregulated sectors is not understood by consumers and that the gap must be closed.

The Competition and Markets Authority has asked all the key legal organisations for ways to improve consumer knowledge of the sector. The current situation where only clients of regulated providers can make complaints to the ombudsman is likely to be a key consideration when the CMA reports back later this year.

The ombudsman says it is ‘difficult to argue for the distinction’ between regulated and unregulated providers to be maintained.

Its submission adds: ‘If sufficient risk exists for a solicitor who is writing a will, administering an estate, or providing immigration or employment advice then arguably the same risks exist for those unregulated providers, and the same protections should be in place.’

It is also suggested that the CMA considers which areas of the unregulated sector might fall under any new redress rules. The ombudsman notes that will-writing, paralegals and immigration are often considered, but there could be merit in looking more broadly at those giving general legal advice and special bodies such as law centres and trade unions.

Under the Legal Services Act, law firms are required to have a first-tier complaints process, signpost to the ombudsman service and cooperate with investigations and decisions.

The ombudsman says there must not be an assumption that the current model and powers are appropriate for the unregulated sector, and there should be understanding of the nature and complexity of the likely complaints if redress is to be extended.

Any extension of the ombudsman’s powers will require an increase in the organisation’s budget, and the LeO response makes clear on several occasions that any such move would be dependent on increased funding.

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