The recent report by the Legal Ombudsman on divorce related legal complaints is a helpful reminder of the ongoing challenges faced by some consumers in their interactions with lawyers. Although the report highlighted a few exceptional examples of poor service, it was reassuring to note also examples of where firms had acted reasonably both in their service provision and in the handling of internal complaints.

However, what was most surprising was why the firms that the Ombudsman had found to have delivered poor service and ordered to waive their bills and/or pay an award for distress and inconvenience allowed these matters to be escalated to the Ombudsman. Those case studies seem to indicate that the relevant firms did not have adequate arrangements to ensure that complaints were handled fairly.

One of the important good practice tips provided to firms in order to foster handling internal complaints fairly and effectively is to ask someone else not involved with the transaction to either undertake the investigation of the complaint or review the outcome of the investigation and any proposed remedy. In many situations, someone else in the firm can successfully undertake that role assuming that person is not conflicted by the impact of any proposed remedy.

However, in one of the cases in the Legal Ombudsman’s report, the client was billed £4000 for photocopying and the firm was required by the ombudsman to waive its final bill of £15,000. It is unlikely that someone else in that firm that operates in a similar way with regard to charging for photocopying and ongoing accrual of costs despite the client’s contrary instructions would have considered such practice unreasonable. Furthermore, it is more difficult for someone with a direct stake in the turnover of the business to recognise easily that it was in the client’s best interests to waive the final bill of £15,000 as recommended by the ombudsman. An objective comparison of the relevant regulatory obligations with the facts of this case should have made it obvious that the firm had acted unreasonably.

Obviously, the precise details of this case study are unknown particularly whether an ‘independent’ person was involved in the review of the internal complaint. However, for the sake of illustration, it is assumed that another person not directly involved in the transaction investigated the initial complaint, which took about five hours of his or her time. The proposed recommendation following that investigation which was to reject the complaint was subject to a further review by another independent more senior member of the firm. That review took approximately two hours to undertake which endorsed the recommendation to reject the complaint.

The escalated complaint to the Legal Ombudsman probably cost approximately another five hours of the firm’s time to liaise with the Ombudsman, which resulted in the firm having to waive a bill of £15,000. The question that arises is whether the firm’s approach was appropriate taking into account the overall cost of not handling that complaint fairly excluding any consequential reputational implications arising for example from social media, which could have been significantly reduced if a ‘truly’ independent person investigated the complaint.

This case study and the other similar examples in the Legal Ombudsman’s report highlight the tensions of being truly ‘independent’ in the handling of internal complaints and the possible unintended consequence of treating clients unfairly. The ability to be truly objective requires someone to step out of the firm’s way of doing things (i.e. culture) to establish whether the client’s complaint has some merit. Senior management of firms can embed and enhance independence and objectivity in their internal complaints handling process by ensuring the following:

  • Investigation of complaints should not be perceived just as a ‘low level’ compliance task but as a brand enhancing activity;
  • Independent investigation officers particularly fee earners should be appropriately recognised for the quality of their investigations;
  • Independent investigation officers should be appropriately trained to investigate complaints competently, diligently and impartially;
  • Independent investigation officers should be made aware that their role is similar to that of an independent ombudsman or independent external consultant in the context of the investigation;
  • The quality of the investigation should not be influenced by the perceived financial value of the clients to the firm;
  • Independent investigation officers should ensure that the subject matter of the complaint has been correctly identified and understood;
  • Independent investigation officers should ensure that the nature of the investigation is dependent entirely on the nature of the complaint and all available evidence is evaluated thoroughly and fairly;
  • Complex complaints or complaints from vulnerable clients may benefit from additional scrutiny by an external party prior to escalation to the Legal Ombudsman;
  • Periodic reviews of the appropriateness of the decisions on internal complaints by the senior management of the firm.

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