Open and shrewd

Read our Chief Ombudsman, Adam Sampson's blog.

Permission to proceed

21 February 2012

Perhaps it's the fact that I was brought up on a smallholding but there is something buried inside me which finds comfort in the rhythm of the seasons. Of course, living in London and working in central Birmingham, I cannot pretend to be deeply in touch with country ways (unless you count the view from west-coast mainline carriages, that is). But even in the sort of work I do, there is some underlying rhythm to our activity, which helps me feel grounded in something beyond the immediate.

Preparing for Board meetings assumes particular importance at this time of the year, for example. The dying of year is dominated by the formalities of the planning process - and I have learned that in a public sector body such as ours, that process actually has to begin around the time of the harvest the previous autumn. February and March is the time when we finally begin to see the flowers growing as result of that hard graft, the first tentative indications of what the year might bring.

And so the central business of yesterday's OLC meeting was to consider our proposed business plan and budget for 2012/13. This is not the place to report what decisions resulted, not least because the financial limits within which we have to operate require signing off by the LSB as part of the budget-setting process, in about a week or so. And for the true geeks among you, the minutes of the meeting will be published in the usual way as soon as they are agreed at the next OLC meeting in March.

Not that there will be any real surprises in what emerges, of course. The shape of what we are proposing was trailed in the draft we put out at the back end of last year and has been discussed in various legal articles over the past few months. Central to it, of course, are the proposals to bring complaints about claims management into the remit of the scheme, this time on a statutory basis (although without the formal intervention of the LSB as regulator). That would go alongside the parallel work to explore the creation of a voluntary jurisdiction, which would give access to redress to people who, for example, have had wills written or been represented at an employment tribunal by a non-regulated individual or firm.

What has made our approach to these proposals easier, of course, has been the almost unanimous support they have received. And that is scarcely a surprise. For consumers, we are offering the promise of wider access to redress. For the profession, an equalising of the playing field and, for those who currently pay our costs, the possibility of sharing some of the operating costs of our organisation with the providers who would now fall under our remit. Indeed, the financial logic behind the move is one of the reasons why the profession, among others, has come out supporting the move, understanding, as lawyers do, that it can only gain rather than lose financially by the change. The devil will be in the detail, as with all these things, as many people have told us. But the principle is sound.

Of course, we are only started down this path. Having had to go through the protracted process of designing, building and launching the Legal Ombudsman, and having watched the good ship ABS being buffeted from legal reef to legal reef on its way out of the harbour, I am only too aware of how much there is to do to move our plans from aspiration to reality. But at least we can now say for sure that those are our plans.


Names and numbers

6 January 2012

Still mulling over yesterday's meeting with lawyers and consumer representatives to jaw over how to implement our decision to name lawyers who have been the subject of an Ombudsman decision.

To be honest, I hadn't been looking forward to it. The formal consultation meetings before we took the decision had not been all that easy – the gulf between the legal and consumer communities was seemingly unbridgeable. When we eventually announced the policy, the reaction showed that we were going too far for one group and not far enough for the other.

In the event, the atmosphere in the room was cordial and constructive; a few acerbic asides apart, no-one wanted to go back over old ground. It may have been helped by a clear steer from the representative from the Department of Business, Industry and Skills on the Government's commitment to opening up complaints information to public scrutiny. The principles we suggested on which the policy should be based – openness, proportionality, simplicity and reliability – were generally welcomed (truth be told, since they verge on mom and apple pie, they are almost impossible to reject).

Everyone agreed that the data we're going to publish would only be useful to consumers and fair to lawyers if it's put in a proper context. "X firm had Y number of Ombudsman's decisions made about them last year" is fairly useless on its own. In how many of those cases did the Ombudsman decide that the firm had given poor service? How does that number compare to the number of clients the firm had? What were the areas of poor service and what were the remedies? What does it all mean, anyway?

Happily, we can provide most of that information. We can pull details about the type of the complaint and the remedies ordered straight from our database. We also routinely collect information about the sort of cases which give rise to complaints – we know that areas of law where emotions can run high (family law is an example) lead to far more complaints than matters like conveyancing. And while we have to be very careful about stereotyping, some types of legal service, such as mental health and prisoners' rights, involve customers who, the stats show, may be more likely to complain afterwards.

But there was one stumbling-block – and a pretty big one. How to relate the number of complaints which had got to the Ombudsman to the number of clients the lawyer, or firm, had? We all agreed that this was vital information: after all, a firm with very few clients, many of whom complained, is very different to a firm with thousands of clients that had had the same number of complaints.

But how to get at the data?

The regulators do not routinely collect it, and the size of a firm is not a very good way of estimating how much work it does. Even if some firms collect the information, others don't and some lawyers, barristers being a good example, would be shocked if you asked them to. And in a world of needing to demonstrate proportionate regulation, it's probably the right question to ask. But for us, asking for the figure each time we made an Ombudsman decision would be an administrative nightmare: more importantly, we would end up publishing unchecked data coming from the lawyer who's being complained about. And given that we're a place that values its expertise in weighing up facts and evidence, publishing unverified stuff under the Ombudsman badge doesn't seem to sit quite right.

This is hardly a unique a problem. When the Financial Ombudsman Service began publishing complaints data, it set up an industry and consumer panel who, after a year's work, reached a similar stalemate. In that case, the regulator decided to require firms to publish complaints information themselves, which provides the context for what FOS publishes. In the absence of any mechanism for getting access to the verifiable data we need, perhaps that is where we will end up.


Changing horses

19 December 2011

Competition, choice – language we're used to hearing about the new Legal Services Act. But it's for the consumer, isn't it? Not lawyers and regulators. But here's the question we've been grappling with lately. When is a new firm a new firm, and when is it a successor firm? Or a phoenix firm?

Happily, our wise Parliamentarians, when they blessed the Legal Services Act, decided that this question was one to be answered by the Ombudsman. A useful quirk of the Act – and a far sighted one it appears.

For us this is exemplified in a group of recent cases, all about the one (or is it two?) firm (or is it firms?).

Over a period of months, we had been getting a series of very similar complaints centring on three very similar firms which had opened and closed in very quick succession. However, according to the firms in question, each of these manifestations (which seemed also to involve many of the same personnel) was entirely new fresh, without connection or responsibility for what went before. Well, that's what they were telling us – and very firmly – for all that the story on their website was very different.

What made life interesting is that between the second and the third manifestation, the firm had changed regulators. And neither regulator could tell us whether or not they were intending to treat them as the same or different businesses. Without the support of the regulators, we were left very much on our own. But for us, all the evidence pointed to this new firm being a successor of the old. And when the firm challenged our decisions, we found ourselves thinking that it would be useful to hear the view of the courts as to whether our decision was right. We were, after all, in virgin territory. So we started proceedings, confident in our approach but also grateful that the end result would bring about clarity in this area.

Thankfully, we received confirmation of our decisions in an unexpected way. Rather than go to court, the firm (rather suddenly it has to be said) agreed it is responsible for service issues provided under its old name. So we have clarity. And our reward is that these many complainants will now receive what they are entitled to in terms of putting things right.

This is the first (and I am sure not the last) time this new dimension of being able to choose between regulators – and their slightly different consumer protection mechanics –played a significant part in complaints that come to us. That firms will look for loopholes in the legislation and the newness of the implementation of this fresh regulatory sphere is not surprising; another, less positive, form of the innovation we so often see in legal services at present. But perhaps it does vindicate the decision to place an independent Ombudsman in the middle of this changing regulatory framework and market forces. The LSB say this is all about putting the consumer at the heart of legal services. Perhaps that is what we managed to achieve this time.


Publish and be damned?

7 November 2011

We've had about 50 complaints about one firm, all the same sort of issue: people who wanted to buy their new home and then came to us because they felt they had been overcharged. And in all those cases, we saw a pattern of behaviour of that firm that confirmed what all these people suspected. They had been overcharged, and in most cases by an amount of around £1,500 – a lot of money.

Worse still, when we saw our first 5, or 10, we knew there was a trend here, a common issue. And then we got to 50.

When we started consulting on the question of whether we should publish information about Ombudsman decisions that included the names of lawyers, we didn't have any cases like this. But now we do have enough to make us – and others – wonder what else should the Ombudsman be doing to share this information.

Over the last year it's been the public that has told us that it is in the public interest to share information about the names of firms in some circumstances. Both to help protect the reputation of the profession as a whole (no one thinks that the sorts of patterns like this are endemic across the profession – we heard a lot of 'bad apple' analogies as we talked to people about this issue) and also to help consumers be better informed about the legal services market.

So today we announced what inevitably will be an unpopular decision with the legal profession. We feel it's the right decision; nevertheless for all the merit of the approach we will adopt in relation to publishing information – with names – about lawyers and law firms, it's been a task to grapple with the issues, not least as the profession have been incredibly supportive of the independent Ombudsman to date.

But it's worth considering this issue in a broader context. We're seeing such innovation in the legal services market, with financial services, legal and other services increasingly bundled together. None of us can afford to stay siloed and look at this in relation to legal issues alone. Indeed, Government is increasingly calling for bodies like ours to look at this broader picture and share the information we hold not just to protect consumers, but also to make the legal profession stronger and improve service standards overall.  It may just take a little time for all lawyers to see it that way.


Hoovering up the work?

30 September 2011

I appeared in front of the Birmingham Law Society twice this week. My first session seemed to go well at 1pm on Wednesday. But I returned to appeal later in the day, just in case. I'm hoping to get off with just a fine.

No. Actually, I was there to speak to one of the largest law societies in the UK and Europe about the work of the Legal Ombudsman. Birmingham already is quite the legal town and because the Solicitors Regulation Authority is re-locating to the area, the number of lawyers in the city is on the up – and I think will continue on this trajectory until the move in summer 2012. I've spoken to them before, and they are a good audience – challenging and insightful – and it made sense to speak again to their reps in the form of two large groups of solicitors as well as barristers and the general counsel.

In between my two performances I returned to my desk to continue to get to grips with planning next year's workload on behalf of the organisation. In particular we need to plot the effect of the changes in legal aid, the Jackson Review and what that might mean for us as an organisation – we're planning in the midst of some key changes to the environment in which we work. And it's not something that we're going to crack in an afternoon. Rather our business planning is set to go on for a few months, including a consultation as we're keen to hear what people think so we can get it right. But, overall, what seems to be becoming clear is it might be prudent to plan for more complaints about lawyers and legal services rather than less. What might in the first instance look like a statistical curiosity could well have an implication on the reputation of lawyers next year.

Let me explain why.

If you take legal aid as an example, there's no doubt that less people will be entitled to legal aid in the future. This may well drive down the overall actual number of people coming to us, except that the proportion of our work that involves legal aid cases could well rise. Perversely this could be interpreted (in percentage terms) as more people being dissatisfied with the service they received from their lawyer.

And that brings me back to the Birmingham Law Society. There too was lots of talk about legal aid, and a new piece of terminology I'd not heard before; 'hoovering'. This is the practice of lawyers prospecting for business in the court building. Often it's highly competitive. At worst it involves opportunistically talking to potential clients even though they may have a solicitor already lined up. You can see how it might be controversial. Anecdotally the Birmingham Lawyers were saying 'hoovering' is becoming more and more prevalent – with legal aid reform being the main cause.

So everyone in the room had some planning to do. Old business models that relied on legal aid need to be reformed. Plans for increased competition and decreased margins may need to be brought forward. What's clear is that as legal services become more competitive the profession, consumers and the Legal Ombudsman need to make sure that there isn't a resultant lowering of standards. Because if there is then we will all have more to worry about than 'hoovering' in court.