Legal Ombudsman should also only handle cases up to £10,000 and over five years old
The Legal Ombudsman (LeO) should only deal with solicitor-client disputes over costs of up to £10,000, and any switch should not in any case happen for five years, the Chartered Institute of Legal Executives (CILEX) has said.
CILEX was responding to the Civil Justice Council’s consultation on reform to part III of the Solicitors Act 1974, which proposed that LeO could deal with disputes worth up to £50,000.
A poll of CILEX members found most considered this figure far too high – 41% said it should be less than £10,000 and a further 35% less than £5,000.
CILEX supported £10,000, meaning that if LeO was unable to resolve a dispute, it would go to the small claims court, while a £50,000 cap would likely send too many cases LeO’s way.
“CILEX is cognisant of the current pressures that the LeO is under in managing finite resources to deal with complaints backlogs”, the response said.
“CILEX therefore believes that the jurisdiction of the LeO in relation to costs should only be expanded following extensive analysis of all its operational demands and priorities, and consultation, to ensure that such an expansion would even be feasible.” It suggested giving LeO five years to prepare for the move.
The LeO itself has admitted to not being ready to take on the extra work.
For complainants outside of LeO’s jurisdiction (such as large companies) or where the bill exceeds £50,000, clients would first have to exhaust the solicitors’ internal complaints procedure and then go through compulsory ADR before seeking recourse to the courts, the CJC recommended.
CILEX backed the role of ADR but cautioned that “recourse to the courts in the absence of resolution should be protected”.
It otherwise broadly supported the CJC’s ideas. CILEX agreed that with the overarching principle that fees should be “fair and reasonable”, and judged on an objective basis, although argued that the importance of the matter should not form part of the test.
“CILEX is of the view that the importance of the matter does little to change an outcome, except apply additional pressure onto lawyers, and that this should not factor into costs or terms. CILEX believe that the substantive issues which arise from the importance of the matter – i.e. expediting a claim, spending more time or care on a claim, or doing additional research or extra communications, are factored into with other criteria.”
It supported a one-year time limit for clients to initiate proceedings, removing the distinction between contentious and non-contentious business and abolishing the concept of ‘statute’ or ‘statutory’ bills. “CILEX further agrees that the content and format of bills should be set by conduct rules and the rules of the court.”
The response also raised wider concerns about the language used in the act, requesting that it be updated to apply to all relevant legal professionals and not just solicitors.
“Practitioners such as CILEX members provide excellent care, and do not have the same level of recognition which their solicitor counterparts have, despite being equally qualified, in relation to their area of expertise and where the lawyers have the same practice rights”, it said.
“Furthermore, for many CILEX lawyers, they undertake the same role as their solicitor counterpart and deserve to share the same rights, and responsibilities, associated with bills under the Solicitors Act 1974. As a result, having a similar right (as well as responsibility) in the form of bills would promote equality across the sector.”
A “streamlined and equitable system for bills” would benefit all parties, CILEX added.
“Mandating one process through which all legal bills are disputed will result in better awareness for consumers of what the process is, it will streamline processes for alternative business structures which may include both solicitors and non-solicitors, and reduce bureaucracy for those involved in the system.
“All of these benefits could reduce in marginally lower costs, which in turn could be passed back onto the consumer. It will also bring regulatory certainty, which in the present climate of legal services should be welcomed.”