Quite why an Ombudsman should seek to extend their remit after only a month in effective operation is beyond me. Especially where the raison d'etre was to build confidence in the quality of service from solicitors and barristers - it raises the question - is that job now 'done and dusted'?
Far be it from me to point a white finger - but is all well and good now in the legal High Street? Can miners sleep soundly again? Can victims of spurious whiplash claims go about their business? Are we happy that in camera family courts are spotless? Can the 45% of prospective clients who think law firms don't care about them find good alternatives easily? Maybe no cases really are now being unduly delayed or client accounts confused; I certainly hope so.
The Legal Ombudsman Business Plan 2012 makes interesting reading. http://www.legalombudsman.org.uk/aboutus/consultations.html
After a month in operation they have a 3 year plan to set their world to rights. Behind the motherhood and apple pie stuff, however, this unit is expecting its costs to go up from £14.8m to just shy of £20m this year. Interestingly they expect to have 165k contacts - maybe 'enquiries' - in a year: that's 15.7 per solicitors practice in the UK. As for 'cases': a benchmark of 1.4 cases per solicitors firm in England and Wales is anticipated. Is that a case load they are happy with? Is the profession proud of these levels of Ombudsman referrals? Ombudsmen are supposed to be a 'last resort' - are that many really coming down the pipeline?
To be fair, the team deserve some praise too. It really is no small feat to put 304 people in place, operational and equipped - well done.
But behind all the rhetoric that Annual Reports and assorted plans inevitably entail, is it not time to see if this is where we want to start from?
Is the legal profession happy to admit that on average its clients throw the toys out at these sort of ratios? Silence.
What rate of improvement would be acceptable? Not a word.
What timescale is expected to be required to reduce the case loads by, say 10% per year? 25%? 50%? Not addressed.
Does this require using the full £30k sanction often? If so how often? The budget suggest less than 10 times a year - is that enough? No elaboration.
On what basis does the full £30k penalty become likely? What is the anticipated median/mean/average penalty? Even law firms should know the 'tariffs' in play, surely, or they're diluting the deterrent effect of what they do? This must be buried deep in the bowels of various memorandums of understanding, as it is not explicit in the budget other than as the level of fee income expected. Why hide the stick and walk noisily?
What alternatives to fines are there for repeat offenders? How does LeO move to prevention rather than apologist?
There is much chaos in the legal service world currently, and it is possible to forgive some degree of getting swept along in the tide of 'reform' - but strip away the rhetoric and there is much to be worried about here.
The risks inherent in any body such as this are two fold:
(a) regulatory capture; and
(b) regulatory/mission creep.
Regulatory capture is where a body designed to police other organisations in some sense 'goes native'. This is always a fine balance, but given that the regulated always want to achieve certainty at least and ideally a measure of control over their regulators, this has to be viewed as a pervasive and subtle risk to the regulator at all times.
Mission creep is simply where a body set up to do one thing, ends up diluting its focus by tackling other issues as well. This is not an inherently 'bad' thing, but it needs justification and balancing especially if it is likely to make the core objective less achievable.
With regard to the former, the explicit admission by LeO that while their money comes from the government, it is effectively only channelled by them from levies on the professions is interesting. Frank; and welcome in that they have this issue out in the open. But to state this and then fail to openly address the issues above which are central to how to make the perception of the profession improve is confusing at best. It seems we are expected to assume that the creation of the ombudsman role in itself is enough. It isn't.
Why is LeO not tackling the appropriateness of the level of workload issues first? To fail to address this issue is lamentable as it (no doubt unintentionally) opens the doors to accusations of being an apologist rather than a genuine consumer resource. That is not a good start.
'Mission creep' is explicitly an aim within the next 3 years. Section 128 (1) of the Legal Services Act 2007 relates solely to 'reserved legal activities' and the activities of 'an authorised person'. While s12(1) explores other legal activities and in other subsections goes beyond Clementi's intentions with regard to reserved activities - that is beside the point for LeO. It is not the role of an Ombudsman to redefine reserved activities, whatever their length of experience.
Seeking to extend their remit this early in the process is frankly misleading. The invitation to others within a 'broadly legal context' to seek their (LeO's) assistance is apparently something they would feel obliged to pursue. Why? Who's definition of 'legal services' will we apply this week? They only operate once other's procedures and disciplinary codes have been exhausted - do they have to be approached only by regulatory bodies or institutes? Why go there?
I can understand a rush of blood to the head in the current rush of nonsense that pervades the legal services debate - but LeO would be better advised to stick to their knitting right now. The main complaint of the professions is that they have a tougher regulatory burden than many of their competitors. That is open to debate, frankly - and usually just boils down to a complaint that they spent a long time in law school. To dismiss the regulation of insurers, listed companies, financial services and the myriad certifications in ISO/UKAS, etc for other businesses is unwise and in fact simply reveals an ignorance that does the professions no credit whatsoever. For a regulator to already be in their corner in seeking to extend their cost and oversight burden to 'others' puts them squarely off side from the first whistle. Consumers - and especially consumers who are businesses - will simply not wear it - LeO will increasingly be seen as an apologist, no more, and that was not the intention behind their creation.
LeO also fear they may not be able to keep up with demand concerning their core task - on benchmarks which at the very least are worryingly high already. So they want more scope as well? It simply doesn't add up.
A final point on ABSs: Isn't the point of them that they bring with them a raft of other business models with their own checks and balances? Liberalisation should mean opening these business models up to lawyers who should be able to benefit from them and compete more readily - any attempt to simply add more legal overheads to all the other regulators is both anti-competitive and futile.
Companies, and especially listed ones, already have additional tiers of regulation in place. Surely the point of a deregulated legal system is to give consumers more power to pick, choose, move and even sue if need be for professional negligence. For business clients, even small ones, surely they are arms length transactions between grown ups? Why does the 'new ' regulator use the terms of art such as 'consumer', customer and client in the unique and parochial way lawyers do - ie to refer to a unique band of people simply as 'non-lawyers' when the context permits? It is unhelpful, unwise, and reinforces the perception that they are starting 'off-side'.
So what? Can LeO get back onside? Maybe:
1. Lets see what LeO plans to make the referral burden via the other regulators a declining benchmark. Surely a sign of success for LeO is a declining workforce - not a growing one. they have nailed their colours to the mast at 1.4 cases per solicitors firm - let's see how quickly that comes down to below 1:1.
2. Stick to the knitting. Tell us what level of referral and case resolution is deemed acceptable and why it isn't 'zero referrals'. When that task is well on the way to being achieved, let us know - and we mean at least a 50% reduction on the benchmarks you inherited.
3. The funding is not technically hypothecated as far as we know - so drop the assumption that in the real world it isn't. In the real world, the profession do not control your purse strings, and if they do - pack up and go home now, as you'd become just another appellate tier on an already costly system.
4. You do not get the right to cover all legal services complaints until you have earned it. One month's performance is not enough. 3 years performance is not enough. Prove that you can reduce the level of complaints about the existing bodies, get the perception of the profession back on track after scandals around miners compensation etc, and then people will be clamouring for you to tackle other areas or issues. Right now - focus.
5. Stick to the areas where the real imbalance of commercial power arise - consumers. Businesses can and do fight their own corner - even small businesses - as they are increasingly 'informed' buyers (often ex-profession) and have plenty of choices for alternatives. It really does the legal professions no credit to ignore the 'terms of art' around consumer/customer/client that commerce understand. To assume that SMEs, and especially micro firms have no buying power in legal services is simply wrong. The fact that lawyers (from the Lord Chancellor downwards if need be) don't understand or even see the alternatives, does not mean they are not there. The problem is that in the real world, micro firms would rather use almost anyone other than a law firm - and the range of alternatives for them is growing.
It is an unpromising start - can we please see real evidence of how the perception of the profession has been transformed by the LeO operations to date?
