LeO addresses tighter costs transparency rules

The Legal Ombudsman (Leo) has warned solicitors it expects them to give clients an upfront cost estimate before taking on a case.

The complaints handler said 13% of the cases it dealt with in 2018/19 included a complaint about costs, including complaints over the transparency of information, charging structures and the management of changing costs.

In the second edition of LeO’s costs guidance, ‘An ombudsman’s view of good costs service’, it states: “The new transparency rules require certain information to be provided up front in particular areas of law. 

The guidance builds on that which was published in 2014, adding greater emphasis on transparency rules will inform investigations going forward.

“We recognise that you won’t be able to cover all the different circumstances that could affect the cost of a piece of work on your website, but you might want to make it clear what the expected costs would be for a typical instruction and some typical examples of things that would affect the price”. 

The guidance emphasises that investigators will explore what estimates were provided to clients upfront in the course of investigating complaints.

The document also urges solicitors to make “crystal clear” to prospective clients what charging structure will be applied to the work and what that does and does not include.

“It is clear that some customers who come to the Legal Ombudsman have failed to understand the basis on which they were billed. This is not helped by the different sorts of charging structures lawyers currently offer: fixed fee, hourly rate, damages-based agreement and so on”, it explained.

A series of case studies throughout the documents offer examples of the kinds of complaints that come to the ombudsman and what measures firms should be taking to avoid them.