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ABSs will increase legal complaints confusion

14 November 2011

A new report for the Legal Ombudsman has called for a review of the right of redress for consumers complaining of poor legal service following concerns that the arrival of alternative business structures into the legal services sector will increase consumer confusion.

The research, carried out by the University of Leicester, found consumers were confused about how they could pursue redress if they weren’t satisfied with the advice received.

In its report published this morning, Mapping potential consumer confusion in a changing legal market, the Leicester team led by Professor Cosmo Graham said the confusion stemmed from the development of the market that has allowed a variety of organisations to deliver legal advice.

The bundling of legal advice alongside other types of advice by these organisations also compounded the issue.

“The provision of legal and non-legal services may be bundled together and, although the division may be clear within the organisation, it may not be readily apparent to consumers,” the report said.

Of particular concern was the right to pursue a complaint depended on the type of organisation, even though the service that is being offered is substantially similar.

“This leads to confusion for consumers because, although they may expect that a service is a legal service, and therefore ultimately there will be recourse to the Legal Ombudsman, if that service is provided by a non-lawyer, this will be outside the Legal Ombudsman’s remit,” the report said.

The position of online services was singled out as giving rise to another set of potential problems “when it is not made clear how to make a complaint and what type of person, if any, is involved in the provision of the service”.

The arrival of ABSs prompted even greater concerns: “These problems are likely to get worse given the developments in the market, especially as regards the introduction of alternative business structures.”

Calling on the Legal Services Board and the Ministry of Justice to review the rules, the report said the existing framework contained “gaps and anomalies which raise serious concerns about whether it is fit for purpose, particularly in light of the developments that are taking place in this market” and that future redress arrangements should be “sufficiently comprehensive, streamlined and robust to meet consumers’ needs”.

At the top of the review list should be a requirement on LeO to keep a systematic record of complaints it is unable to handle, clearly identifying the sort of body complained about and where the complainant has been signposted to. “If it turns out that there are areas of significant confusion, the Legal Ombudsman should explore the possibility of direct transfer of complainants to the relevant body,” the report has recommended.

Will writing was acknowledged as a problem area but pending the outcome of proposals to make it a reserved activity the report merely suggested a voluntary system.

The regulation of claims management companies came in for particular criticism, with the authors of the report finding it “anomalous” that the MoJ’s powers in relation to complaints were more limited than the Legal Ombudsman’s, in particular with regard to compensation.

The report saw this as a significant consumer detriment and said the MoJ should “explore and consult on this issue as a matter of urgency, particularly given the rise in the numbers of complaints”.

The not-for-profit sector was another area the research considered. It has recommended the creation of some form of voluntary jurisdiction for complaints.

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