The governing board of the Legal Ombudsman (LeO), the Office for Legal Complaints (OLC), is proposing significant changes to how LeO charges for complaints. Under the proposals, firms could be charged even where complaints are ultimately dismissed.
That is a remarkable proposition. All complaints accepted within LeO’s jurisdiction would attract a case fee unless a waiver test is met. Fees would escalate as the matter progresses:
- ÂŁ200 for early resolution
- ÂŁ750 for an investigation without an ombudsman decision, and
- ÂŁ1,500 where a final decision is required.
- A further ÂŁ400 would apply where the law firm had not issued a final response within eight weeks, regardless of the outcome.
The real cost for firms
Those figures cannot be viewed in isolation. By the time a complaint reaches LeO, a firm will already have spent hours reviewing the file, speaking to fee earners, preparing a final response, considering redress and dealing with an unhappy client.
If the complaint then proceeds through LeO, the firm must spend more time responding to enquiries, collating documents, preparing submissions and dealing with provisional views. It becomes even more difficult with the longstanding delays to LeO investigations: it’s quite difficult to revisit a complaint you (or indeed a former colleague) investigated a year or two before and respond quickly to LeO’s questions.
Add a potential ÂŁ750 or ÂŁ1,500 case fee, and complaints become expensive before any compensation, fee reduction or write-off is considered.
Same story, different day
In fact, we’ve been here before. The SRA’s own recent proposals point in a familiar direction. Its proposed funding requirement for 2026/27 rises by £25 million, a 29% increase, so it can “fix foundations, strengthen core operations and improve the way it works”. In plain English, firms are being asked to pay more because the regulator needs to repair historic operational weaknesses.
The OLC proposal follows the same pattern. Both the regulator and the complaints body have been overwhelmed by systems that have not kept pace with reality. Their answer? Let’s bill the profession.
Where does the problem really lie?
There are two causes of the rising demand. One is frustrating for the profession, one uncomfortable.
Let’s tackle the uncomfortable one first. The consultation says LeO found poor first-tier complaint handling in 46% of the complaints it investigated. That is a stark failing on any reading and needs to be addressed.
However, it might not be as dire as it seems. The consultation also recounts that, in 25% of complaints, consumers said they had never received a final response.
But LeO is not saying the firm had not sent one; it is saying consumers reported they had not received one. Are firms sending final responses without making clear that they are final? If so, this is a quick win. There may well be other quick wins that could address a lot of what might contribute to poor complaints handling.
However, law firms know that the rising demand is not simply caused by systemic failings in firms’ complaint handling. Instead, many complainants have unrealistic expectations of the service they should have received. Many of them then use AI to help them communicate their complaint: AI reinforces and amplifies those expectations. That is the frustrating part for firms genuinely trying to handle complaints properly: sometimes, you simply can’t reach a resolution.
The real reform: stop wrong complaints entering the system
This is the point the OLC, and the SRA, need to face: “bad” complaints must be stopped from clogging up the system. These are complaints which didn’t need to go to LeO in the first place (because the law firm should have dealt with them better) or shouldn’t be going to LeO (because, in fact, the law firm has dealt with them well but the complainant is unwilling to accept anything less than complete capitulation by the law firm).
The OLC goes some way to addressing this in their consultation. They propose standardising how complaints are accepted, using an online form, and tightening how complaints are assessed, including requiring complainants to explain the impact of the alleged failing and applying a more consistent approach to dismissing complaints where there is no significant detriment. These are sensible proposals, but they do not go far enough.
The question is: why haven’t these proposals been in place already?
What better first-tier complaint handling should look like
The OLC should be going further and looking at tackling the root causes of the increase in what comes across their desk. This includes a focus on the work that (some of) the profession has to do on first-tier complaint handling. It has made some attempt with its proposed Model Complaints Resolution Procedure, but this is basic, focusing on early identification and resolution through explanations, apologies and meaningful redress.
Firms that handle complaints well will already do this. The focus should be on firms that do not, where the issue is likely to be systemic: there is a cultural problem which means that complaints are not recognised, not appreciated or simply not given enough headspace. The OLC should make clear that firms need to ask:
- Does the complaints handling procedure stand up to scrutiny?
- Is the task appropriately resourced?
- Does the person handling the complaint have the ability to make meaningful gestures of resolution (whether that’s apologies, refunds or compensation payments)?
- Are all staff able and willing to identify complaints and to work with management to resolve them?
- Do people know how to investigate, understand and respond to a complaint?
- Can people identify when a complaint is a service-level issue, and when it is really a potential claim or misconduct issue?
- Does management treat complaints as obstacles to avoid, or as learning points?
AI-assisted complaints need practical guidance
Firms who take complaints seriously also have a problem.
Fundamentally, the OLC and SRA need to issue realistic guidance on AI-assisted complaints. Rather than assuming firms can manage lengthy, sometimes incoherent and often stubborn complaints in the way they always have done, they should acknowledge that the landscape has changed. They need to set clearer parameters for complainants. It’s a task they need to confront in their own organisations and complaint-handling procedures; as part of that, they should be setting precedents that can be adopted, as appropriate, by law firms too.
This might include allowing firms to:
- Require complaints to meet a specific word count or mandatory format, with reasonable adjustments where necessary;
- Explain that AI-generated advice may be irrelevant, inaccurate or inappropriate, and may reinforce, rather than test, a complainant’s sense of grievance; and
- Be firmer in ending unnecessary back-and-forth correspondence and calling out abusive or inappropriate behaviour.
Higher fees are not reform
The OLC is right to recognise that the complaints system is under strain, but a fee increase is not a strategy. Charging firms more will not stop weak, tactical or vexatious complaints. It will simply make them more expensive to resist.
For smaller, fixed-fee, low-margin and high-volume firms in particular, the commercial pressure will be obvious: settle early, offer redress or concede ground, even where the complaint is weak or unreasonable, because fighting on may cost more than buying peace.
That may help LeO manage its caseload, but it does not serve justice, consumers or the profession. Real reform means improving poor first-tier complaint handling, filtering out complaints that should never reach LeO and setting practical rules for an AI-assisted complaints landscape. Until that happens, higher fees will do only one thing: make a failing system more expensive for the firms least able to fix it alone.
