Barrister Paul Adams summarises the changes to the Legal Ombudsman’s Scheme Rules that apply from 1 April 2023.
The Legal Ombudsman Scheme Rules set out the framework for how the Legal Ombudman (LeO) undertakes investigations and makes decisions about complaints between authorised persons (including barristers) and complainants. Following a review and consultation process, LeO recently made changes to their Scheme Rules, which apply to complaints received by LeO from 1 April 2023.
The previous Scheme Rules had been in place since 2010 with no major amendments until now. However, the changes are not being applied retrospectively to complaints received by LeO before 1 April 2023, and the previous versions of the Scheme Rules remain available for information.
The Bar Council made representations to LeO during the consultation process, including supporting the proposal to reduce time limits for complaints, and it welcomes the changes to the Scheme Rules. These have resulted in a more proportionate and efficient complaints handling system that is fair and reasonable, and this benefits both service providers and complainants alike.
What are the changes?
There are three key areas for change to the Scheme Rules that barristers should be aware of:
- a change to time limits for bringing complaints (Scheme Rule 4);
- changes to Ombudsman discretion to dismiss or discontinue complaints in certain circumstances (Scheme Rule 5.7); and
- discretion to decline to issue an Ombudsman decision where there are no objections to the findings of the case decision (Scheme Rule 5.19).
Scheme Rule 4: Time limits
From 1 April 2023, the time limits for referring a complaint to LeO are no later than one year from the date:
- of the act or omission being complained about; or
- when the complainant should have realised that there was cause for complaint.
This change is motivated by LeO’s experience that older cases can be more difficult to investigate due to the passage of time, which creates challenges in gathering evidence, impacts the quality of recollections, and may involve firms having closed or practitioners having retired since the events complained of happened. Under the previous Scheme Rules, the time limit was within six years of the act, or within three years of the complainant becoming aware of the act or omission.
Whilst the time limits are being reduced, LeO has widened the level of discretion it has to accept complaints that are out of time. Under the Scheme Rules prior to 1 April 2023, the test for exercising this discretion was in “exceptional circumstances”, whereas now complaints may be accepted in circumstances where it is “fair and reasonable” to do so.
Complainants are nevertheless still required to bring their complaint to LeO within six months of the date of the final response to the complaint. LeO will take into account the circumstances of the complainant and whether they are vulnerable, e.g. whether they have experienced a recent bereavement or if they have a disability.
Communication of the change to time limits to service users is key. This includes information published on service providers’ websites as well as any signposting or guidance documents that service providers may use which outline when a complaint can be taken to LeO.
Scheme Rule 5.7: Discretion to dismiss or discontinue complaints
LeO’s Scheme Rules provide the Ombudsman with discretion to dismiss or discontinue a case where there are compelling reasons to do so. The old Scheme Rules prior to 1 April 2023 provided a number of scenarios where this threshold would be met. From 1 April 2023, the new Scheme Rules have been amended to include additional circumstances which would meet this test.
The Ombudsman can now dismiss or discontinue a complaint if:
- they are satisfied that the complainant has not suffered ‘significant’ loss, distress, inconvenience or detriment;
- the size or complexity of the complaint, or the behaviour of the complainant, results in the complaint requiring a “disproportionate” use of LeO’s resources;
- there has been due to undue delay in the complainant bringing it. This scenario mainly applies in cases where complainants seek to raise further issues during an investigation that they should reasonably have been aware of at the start and brought at that time; and
- where the service provider has made a reasonable offer to resolve the matter at first instance and it has been accepted by the complainant prior to referring the complaint to LeO. This is an extension of the existing discretion to dismiss a complaint where a reasonable offer has been made and remains open for acceptance.
Scheme Rule 5.19: Discretion to decline to issue an Ombudsman decision
Under the new Scheme Rules, LeO will have discretion to consider a complaint to have been resolved on the basis of an investigator's case decision if neither party provides "any substantive reasons" for disagreeing with that decision.
An Ombudsman may conclude that a final decision is not needed on a case if no substantive issues have been raised in response to the investigator's findings or remedy (for example, where a response to a case decision is simply disagreement, with no rationale provided).
If an Ombudsman’s finding recommends that a remedy is payable to a complainant, LeO expects service providers to honour the recommendation.
If a service provider "fails to do so within a defined period of time", the complainant can request that the case is passed to an Ombudsman for a decision for the purposes of enforcement through the courts.
This change will allow LeO to more easily close complaints, following a case decision if it is fair and proportionate to do so, without escalation to an Ombudsman, thus reducing their workload and resulting in prompt and fair determinations.
Other new rules and drafting changes
Alongside some minor drafting amendments to a number of Scheme Rules, including to reflect new dates, provide clarification and correct typos, LeO has also added a “slip rule” to allow the Ombudsman to rectify clear and obvious errors without the need to set aside and reissue a final decision.
What does this mean for the Bar?
Barristers should take this opportunity to familiarise themselves with the changes and ensure their complaints handling policies, procedures and client communications are up to date, including, for example, updating client care letters or website signposting material on websites. While some of this will be particularly relevant to barristers who undertake direct access work, it is important that all barristers are familiar with the changes and potential impact on them and/or complainants.
Resources and useful links
LeO has developed the following resources relating to the changes to the Scheme Rules that are available on their website:
The Scheme Rules (including previous versions);
Scheme Rules FAQs, which is an updated version of the previous FAQs with information about the application of the amended rules and case studies; and
On 9 May, the Bar Council hosted a free webinar with LeO Investigator Jason Chapman to set out the Rule changes and implications for barristers.
LeO can be contacted via a dedicated email address for enquiries or for service providers to request further information and guidance relating to the new Scheme Rules: [email protected]
Paul Adams is an employed barrister at the Financial Conduct Authority, specialising in financial services, investigations and white collar crime. He has been a member of the Bar Council since January 2022 and is a member of the Young Barristers’ Committee and Regulatory Reform Working Group.