Summary 4

Summary 4

Area of law: Litigation

Complaint reason(s): Costs information deficient, failure to advise, failure to keep informed

Remedy: To refund fees already paid

Outcome: Ombudsman’s decision accepted by complainant

Mrs F instructed the firm in two related matters. She wanted help to enforce an earlier judgment against her old lodger, and to force the repayment of a business loan she had made to the same person. The firm estimated that enforcing the judgment would cost £750, but did not give an estimate for the second matter.

The first issue was quickly resolved, with Mrs F being paid the £10,000 owed to her. They firm also sent the claim form to her old lodger about the repayment of the business loan.

Mrs F wrote to the firm, requesting an estimate of costs. The firm confirmed they would only reach a compromise with the other side, which included a contribution towards Mrs F’s costs. They later sent an estimate of costs at £6,500, but said that this was not set in stone.

The matter went to court, and Mrs F was awarded nearly £14,000 and costs were awarded in her favour. Mrs F was worried about actually getting this money, and was anxious about the costs she would incur in chasing this matter up further. The firm appear to have pursued the mortgage company to find out what equity lay in the property, despite Mrs F asking them to stop.

Upon investigation, we found that while the firm maintained that the costs in relation to the mortgage lender would be covered by them, they had still charged Mrs F £1,000 for this. The ombudsman therefore decided that the firm should refund this money. We also felt that because the firm did not provide a costs estimate at the outset, Mrs N should be given £200 compensation. Mrs N accepted the decision.