Poor service from law firms is blamed for a £2 million rise to the legal ombudsman’s annual budget amid predictions of a surge in complaints about lawyers.
But the legal profession has hit back, criticising the ever-increasing cost of regulation and suggesting that throwing more money at the ombudsman will do nothing to improve itsown performance.
In its 2025-26 business plan published last week, the legal ombudsman scheme — known among the cognoscenti as LeO — said that its budget will increase to more than £20 million for the coming year. That 11.4 per cent rise on the previous year’s budget has been approved by the Legal Services Board, the overarching regulator for all legal services in England and Wales.
“Investing to save” is the language the ombudsman uses to justify the increase, with the report saying that the money will go towards increasing “investigator resource” to reduce the “historic” backlog of 3,000-plus cases and cut waiting times by a third.
In a bid to push up standards and enhance transparency, the ombudsman also committed to publishing decisions in the public interest and to working with regulators to develop a model complaints handling procedure.
Created by the Legal Services Act 2007, the ombudsman service, which is overseen by the Office for Legal Complaints, is tasked with investigating and resolving complaints about providers of legal services — as well as promoting better complaint handling by law firms.
Based in Birmingham and with outposts in Cardiff and Leeds, the service employs 252 staff who have resolved between 80,000 and 100,000 complaints since 2010.
The ombudsman can order compensation payments of up to £50,000, and instruct lawyers to refund or reduce fees, fix the issue or pay another firm to do so, and return any necessary documents to a client. It can also order lawyers to apologise.
According to its figures, complaints received rose from 6,400 in 2019-20 to 9,400 in 2022-23, and it predicts that it will receive more than 10,000 complaints this year.
In the report, Elisabeth Davies, chair of the Office for Legal Complaints, and Paul McFadden, the outgoing chief ombudsman, said that growing demand reflected in part a greater client awareness of the right to complain.
But they also blamed lawyers, claiming that data over several years shows that “standards of neither service nor complaints handling have improved in legal services”. In fact, they added, “they have worsened” in some areas. “Persistently high demand, and persistent findings of service and complaint-handling failings, are clear indicators that consumers are being let down,” the pair state.
Future complaints, they accept, will also be driven by the impact of the higher cost of living — which is predicted to increase “consumers’ propensity to complain” — and an expected rise in homebuying, the area of law attracting the most complaints.
Davies and McFadden claim that the service has made a “step change” in its annual output, increasing the number of complaints resolved annually from 6,500 to more than 8,000. But despite that “transformation”, they state that the average “customer journey time” is about 290 days — although nearly half are resolved in less than 90 days. They acknowledged that the service “can’t currently deliver acceptable waiting times” to all customers.
The legal ombudsman is primarily funded through a levy on the approved regulators of the legal profession, which are themselves financed by solicitors and barristers. Yet the lion’s share comes from the significantly larger solicitors’ profession.
Richard Atkinson, president of the Law Society, which represents some 163,000 solicitors, criticises the “soaring” budget of the ombudsman, which is, he says, still slow paced and failing to meet performance forecasts. The society, its leader says, does “not have confidence that further investment will result in the projected improvements”.
Atkinson recommends that the service should outsource investigations during periods of high demand and use automation to filter and redirect inquiries that are unrelated to legal services.
Defending lawyers, Atkinson points to data from the Legal Services Consumer Panel, which last year found that 87 per cent of clients were satisfied with the service provided.
Issues linked to barristers represent only about 4 per cent of complaints to the ombudsman, says Stephen Kenny KC, chair of the Bar Council’s regulation panel. But he agrees that the overall cost of legal regulation should be cheaper and that regulators, including the ombudsman and Bar Standards Board, should focus on their core aims instead of “costly, additional projects”.
Increasing cost and scope of regulation is becoming a “real burden” for law firms, senior lawyers complain. Iain Miller, a regulatory partner at the law firm Kingsley Napley, argues that “the increasingly disproportionate regulatory burdens placed on the sector by legal regulators seems to fly in the face of the government’s agenda of making regulation more proportionate and targeted in order to drive economic growth”.
MPs on the justice select committee assessed legal regulation last year and its then chair, the former Conservative MP Sir Bob Neill, says that almost 20 years after the 2007 act came into force, there are concerns that legal regulation is not providing “value for money”.
“All [legal regulators] seem to be stretching their remits and should instead concentrate on their core business,” says Neill, who suggests his committee found no evidence of a desire for a “whole review of the Legal Service Act”.
