PID-013 - Poor costs information Background Ms B instructed national law firm Veale Wasbrough Vizards (“the firm”) to advise on the ownership of her late husband’s company and to represent her in a potential claim under the Inheritance Act 1975 against his estate, where she acted as one of four executors. The firm ended the retainer after around 2 years due to non-payment of fees. Ms B later complained that the firm had not represented her cost-effectively and had allowed £60,000 to be drawn from the estate for legal costs related to a mediation that never occurred.Complaints The Legal Ombudsman accepted 10 issues for investigation, including concerns about lack of cost transparency, failure to progress the case, inadequate invoices, unresponsiveness, and incurring excessive counsel fees. The Legal Ombudsman’s view and approach The Ombudsman concluded that the firm’s service was unreasonable in relation to five of the ten issues, specifically: Failure to advise of likely costs: The firm’s client care letter did not provide adequate cost estimates, and subsequent fees exceeded expectations significantly. Ms B was not informed of potential total costs, which ultimately led to the retainer ending. Failure to progress the matter: Little progress was made, particularly after a proposed mediation fell through. Failure to answer questions: The firm ignored several reasonable queries from Ms B, contributing to her distress and confusion. Unnecessary counsel fees: The firm incurred substantial counsel costs (£9,700 plus VAT) for issues unrelated to mediation preparation, without prior approval or cost estimates. Delay and cost in securing funding from the estate: The firm spent an unreasonable amount of time and money trying to agree the release of further funds from the estate or the company. As a remedy, the Ombudsman directed a total remedy of £24,389.70, made up of: A 30% reduction in Ms B’s outstanding cost liability (a reduction of £12,749.70 including VAT). A refund of £11,640 (inclusive of VAT) for unjustified counsel fees. The Ombudsman agreed that the remedy was to be offset against outstanding fees which Ms B still owed to the firm. Legal Ombudsman InsightIt is important that providers’ costs information are sufficiently clear and detailed to enable a customer to understand the likely costs and decide whether or if they want to proceed. Read the full decision
PID-012 - The implications of poor advice BackgroundMrs A instructed Monmouth based Twomlows Limited ("the firm") to advise and assist her in relation to two property matters. The first instruction was to transfer two properties ("the M properties") into the names of her and her three daughters as set out in her father's will and to deal with the first registration of these unregistered properties. The second instruction was to transfer a buy-to-let property, owned solely by Mrs A, into the joint names of her and her eldest daughter to equalize matters between her three daughters. Work was done by the firm to complete the necessary documentation for both instructions, and the relevant applications were sent to the Land Registry. However, requisitions were raised on both applications by the Land Registry the following year, and all the applications were eventually cancelled. Mrs A contacted the firm multiple times for updates until Mrs A eventually instructed the firm to do no further work until they had discussed matters with her. Despite this, the firm continued with the application for first registration of the M property, which was completed. Complaints Mrs A raised eight complaints about the firm including; causing delays, failing to provide updates and respond to requests for information, failing to follow instructions, providing incorrect advice, failing to register the properties and failing to respond to her complaints.The firm did not respond to Mrs A’s complaint other than to acknowledge receipt. The Legal Ombudsman’s view and approach The Ombudsman found that the firm:caused delays both in dealing with the Land Registry requisitions and for nearly 9 months when they did no work on the transactions. failed to provide updates until requested by Mrs A did not follow Mrs A’s instructions to contact her before continuing with outstanding work. provided incorrect tax advice which led to Mrs A incurring unexpected tax liabilities. failed to complete the first registration application correctly leading to the cancellation of the application. The Ombudsman directed the firm to: waive all their fees in relation to the transfer of equity (£420 including VAT) compensate Mrs A for 50% of the costs, fees, and disbursements incurred in dealing with the transfer of equity (£12,359.51 including VAT) compensate Mrs A for Stamp Duty interest and penalties incurred (£1,017) compensate Mrs A for emotional impact of the poor service (£1,000) Legal Ombudsman Insight• Mrs A incurred a significant financial expense as a result of the firm’s incorrect advice.• If we can be satisfied that a customer would have acted differently if not for the advice they received, then we can look to compensate for the losses they have incurred if those losses were caused directly by the firm’s advice. Read the full decision
PID-011 - Acting in a client's best interests Background Mrs A instructed St Helens based law firm St Helens Law (“the firm”) to act for her in a claim against a government department. The firm’s work was funded by a conditional fee agreement (CFA) also known as a “no win no fee” basis.The claim settled with Mrs A being awarded £50,000 plus legal fees and disbursements following a joint settlement meeting. From this fee, £12,500 was deducted for the firm’s success fee and £13,980 was deducted for an After The event insurance (ATE) premium. Mrs A was left with £23,520 ComplaintsMrs A’s complaint was that the firm told Mrs A that she could use her insurance policy to fund the claim but then took out an ATE policy on her behalf. Mrs A maintained that the firm had spoken with her in an initial meeting about use of a home insurance policy. The firm argued the policy was discussed but that Mrs A ultimately decided not to use the insurance policy to fund her claim, and never provided details of the policy until she received the bill anyway. The Legal Ombudsman’s view and approach The firm’s attendance note of their initial meeting with Mrs A at her home (due to her having a serious health condition and being unable to attend their office) stated funding options were discussed, but no further detail was recorded.The firm’s engagement letter of the same date didn’t reflect this discussion, instead included the standard wording that should there be any insurance policy available to fund the claim, the firm should be made aware. The firm sent a letter to Mrs A two years later recalling that in the meeting the use of a policy was discussed. They added that the firm had made clear the drawbacks of using this were that a panel firm would have to be used instead of this firm, and there could be delays while the insurer approved stages of work.We decided that by only pointing out the disadvantages of using her existing insurance policy, the firm had led Mrs A to a decision whereby she shouldn’t use it when there was an important financial reason why she should. By the firm highlighting the disadvantages of the policy, it was also unsurprising that she didn’t provide the policy details to them at the beginning of the claim. Our final decision was that the firm should refund their own fees of £12,500, reimburse the ATE policy which cost £13,980, and pay compensation of £500. This was because, were it not for the firm’s unreasonable service, Mrs A would have used her existing policy cover and likely not paid any fees or premiums. She also wouldn’t have had to endure the stress of making a complaint or feeling she had been taken advantage of. Legal Ombudsman InsightsLawyers are expected to act with independence and not act if there is an own-interest conflict or a significant risk of such a conflict. In this case, the firm placed its own interests of becoming instructed to deal with the claim above the best interests of Mrs A. We aimed to put Mrs A back in the position she would have been in if the firm had given independent advice. Read the full decision
PID-010 - Short lease on a property Background Mr A instructed Surrey based law firm Rowe Radcliffe (‘the firm’) in the purchase of a leasehold property. When he came to sell the property 21 years later, his buyer’s solicitors discovered that the lease had only 56 years left of its term. His buyer then insisted that he extend the lease term before the sale. This cost Mr A £45,000 for the premium payable to his landlord, plus his landlord’s costs and his own costs. Rowe Radcliffe were intervened into by the Solicitors Regulation Authority.Complaints Mr A complained that the firm had failed to provide any advice to him about the possible risks of him purchasing the property with only 77 years remaining on the lease, or what he might need to do should he wish to sell the property. The Legal Ombudsman’s view and approach When acting on the purchase of a leasehold property, the Legal Ombudsman would expect a firm to give information about the amount of time remaining on the lease. If there were 85 years or less, a firm should provide detailed information about the impact of short leases on saleability and mortgages, and the process in relation to lease extensions. That would include information on the premium payable to the landlord for the lease extension, which would increase each year that the lease term fell below 80 years. The firm’s service was unreasonable because there was no evidence that the firm gave any advice to Mr A on the risks of purchasing a property with a lease term of only 77 years, either before or after the purchase completed.Had the firm advised Mr A at the time of the purchase about the implications of the lease having an unexpired term of less than 80 years, then he would have had a number of options. He could have decided not to proceed with the purchase, sought a reduction in the purchase price from the seller, or have asked his seller to serve a ‘section 42 notice’ on the landlord. That would mean he could start the lease extension process immediately on owning the property, rather than having to wait the two years required under the relevant legislation to own the property himself before he could extend the lease.We found that the most likely option Mr A would have taken would have been to ask the seller to serve a section 42 notice before completion. Mr A would then have extended the lease shortly after completion and paid his landlord the premium and associated costs due at that time. To calculate what that premium would most likely have been at the time Mr A purchased the property, we used the lease extension calculator on the Leasehold Advisory Service’s website. This gave an estimate of between £10,000 and £11,000 for a lease with 77 years left unexpired. We decided it would be fair to use the average of those figures (£10,500) for the likely premium Mr A would have paid at that time, had the firm’s service been reasonable.As Mr A paid £45,000 for the premium when he discovered the problem 21 years later, his loss was the difference between the sum he actually paid, and the sum he should have paid just after the purchase of £10,500. That meant his financial loss was £34,500. The remedy did not direct a payment to cover Mr A’s legal costs (or his landlord’s) for the lease extension work. That was because had the firm’s service been reasonable, he would still have most likely had to pay for the lease extension and its associated costs, although with a lower premium of about £10,500 at that time. However, a payment of £400 was also awarded to address the shock, upset and inconvenience caused to Mr A by the firm’s unreasonable service. This meant that there was a total remedy directed to be paid by the firm to Mr A of £34,900. Legal Ombudsman Insight• Service providers should advise their customers about any issues that are likely to impact their ownership of a property, in this instance the limited number of years left on the lease. • Mr A was put to unnecessary additional expense because the firm failed to properly advise him and we directed that expense be reimbursed. Read the full decision
PID-009 - Instructing a Direct Access barrister BackgroundMrs B instructed Mrs Pauline Lewis, a barrister, directly under the Direct Access Barrister Scheme to act for her as the claimant in a litigation matter against two defendants, against whom she was claiming monies owed on a rental property.Mrs B’s claim was successful at court, but the issue of costs was deferred to a separate hearing. Mrs Lewis was unavailable for the costs hearing, so she passed the matter on to another barrister (WL), who was responsible for finalising the court bundle and for representing Mrs B at court. Mrs Lewis was instructed by Mrs B throughout, and although some of the issues complained about related to the work done by WL we decided that it was fair and reasonable for all complaints raised in this matter to be against Mrs Lewis.ComplaintsMrs B raised seven complaints, some about Mrs Lewis alone and others about Mrs Lewis and WL together. Mrs B complained that Mrs Lewis had failed to provide her with a client care letter setting out her costs and the work that she was instructed to do for Mrs B, and she raised a number of complaints relating to both Mrs Lewis and WL’s preparation for and representation at the costs hearing, which Mrs B said was poor and led to the costs awarded being far lower than she considered they should have been. She also complained that confidential information had been disclosed, contrary to her instructions.The Legal Ombudsman’s view and approachWhen we determined the complaint, we decided that Mrs Lewis had provided poor service to Mrs B.She had failed to provide a client care letter at the outset which confirmed her costs and the work she had been instructed to undertake.We also decided that Mrs Lewis had failed to prepare for the costs hearing, failed to put together a court bundle with all relevant material in it, and that she failed to communicate with the replacement barrister who himself had failed to reasonably prepare for the hearing, giving the court incorrect and confusing information.We decided that this had resulted in Mrs B achieving a lower amount in costs than she otherwise would have.The Ombudsman directed that Mrs Lewis should: pay Mrs B £800 to reflect the emotional impact of the service failings reduce her fees by 70% (£665) to reflect the limited value of the service pay £11,103.70 to compensate for the money that Mrs B was not able to recover due to the poor service. Legal Ombudsman Insight• In this case the barrister was responsible for the acts and service provided by a third party who was covering the case in her absence.• Quantifiable losses caused directly by a lawyer’s poor service can be reimbursed. Read the full decision
PID-008 - Citizenship application not submitted BackgroundMr A engaged the barrister Mr Mohammed Latif through direct access to assist with his application for British citizenship. Mr A paid £1,200 for the legal work, expecting Mr Latif to draft and submit his application. Despite repeated requests, Mr A did not receive key documents, updates or confirmation that his application had been submitted. Mr A later discovered, after making his own enquiries to the Home Office, that no application had been made on his behalf. Repeated attempts to contact the barrister were met with silence or inadequate responses. Mr A requested a refund and the return of his papers but received neither. ComplaintsMr A raised a number of complaints about the service he received from Mr Latif which included issues like failing to provide agreed documents, failing to keep Mr A updated on the progress of the application, failing to submit the application to the Home Office, cancelling appointments without sufficient notice, failing to return document and failing to respond to his complaint.The Legal Ombudsman’s view and approachThe ombudsman concluded that Mr Latif failed to provide Mr A with a client care letter and payment receipt, did not keep Mr A updated or respond to his communications, misled Mr A on the progress of his application, and failed to refund fees or return his papers upon request. No application was submitted to the Home Office, and Mr A had to discover this himself. Mr Latif did not respond to the complaint or provide any explanation for his actions. The Ombudsman’s final decision was that Mr Latif should pay the following to Mr A: £1,630 for financial compensation, reflecting the then-current cost of a new British citizenship application; £650 to recognise the emotional impact and distress caused by the service failings. Legal Ombudsman Insight• Where no work has been done, a customer is entitled to have the money they have paid for that work refunded.• As Mr A was put to additional expense, that he wouldn’t otherwise have incurred, as a result of the poor service he received, he was entitled to be compensated for that expense. Read the full decision
PID-007 - Failing to apply to extend Leave to Remain BackgroundMrs A instructed London-based former solicitor Mr Chandi to support with her application to extend her UK Visa for Leave to Remain which was about to expire.Mr Chandi advised Mrs A that he was under the employment of a regulated law firm, however, enquiries by the Legal Ombudsman’s office found he had not been in the firm’s employment for quite some time. Given Mr Chandi was a regulated solicitor when the service was provided, our office set up a complaint file against his name personally, as we are entitled to do.Mrs A believed the application was underway as she paid the fee and provided Mr Chandi with information to support her application. Communication from Mr Chandi was mainly by text message but he sometimes used the previously mentioned firm’s name for emails, despite no longer working for them.During a stay in an NHS hospital, she was told her immigration status expired, so she was an overstayer in the eyes of the law. Due to this, she was not entitled to the free healthcare of the NHS. Having stayed in hospital for treatment, she was asked to pay £7,533 for the NHS care, in addition to a penalty fee of £1,210 which came as a huge shock to her.In addition, the issue of Mrs A’s status still needed to be put right. To do this, she had to pay new solicitors £5,000. Complaints Mrs A complained that: Mr Chandi failed to inform Mrs A that her application to extend her visa had been declined. Mr Chandi failed to update Mrs A about the visa application [over a 6 month period]; and Mr Chandi failed to submit Mrs A’s visa application within a timely manner. The Legal Ombudsman’s view and approach Our office found the service unreasonable for all complaints we investigated. The evidence shows Mrs A and her husband made many attempts to get updates from Mr Chandi, even arranging meetings which were cancelled or which he failed to attend, leaving them worried and frustrated. Mr Chandi misinformed Mrs A about the status of the application, as evidence shows he told her he would chase the Home Office where the application had not been submitted yet. The application eventually failed for missing information. Mrs A was never told by Mr Chandi about this. The application was not sent for six months based on Home Office information, causing her to lose her status to remain in the UK. The way Mrs A came to realise her application had failed caused upset at an already difficult time. Mrs A had to pay more money to another firm of solicitors to complete the work Mr Chandi should have done. To put things right, the remedy our office directed was that Mr Chandi should pay the following in compensation to Mrs A: £7,533 plus £1,210 to cover the NHS care fee and penalty £5,000 to cover the work by new solicitors to put right her status in the UK £400 to recognise the shock, frustration and upset caused by these failings. Legal Ombudsman InsightWhere we can determine that a customer has incurred a financial loss directly as a result of the provider’s poor service we can direct that they are compensated for that loss. Read the full decision
PID-006 - Retaining client money Background Following a Court hearing Mr B was ordered to pay a substantial debt to a third party. Around a year later Mr B instructed West End of London based law firm Bloomsbury Law to negotiate a settlement of the debt.Mr B transferred £20,000 to Bloomsbury Law to settle the debt. Mr B heard nothing further from Bloomsbury Law and after further enquiries Mr B found out that the debt to the third party was still outstanding and no money had been paid over.Complaints Mr B complained that he made a payment of £20,000 to the firm towards an insurance settlement, but the £20,000 was not paid forward by the firm.The Legal Ombudsman’s view and approach Although Mr B provided this office with evidence to show that he had paid the £20,000 to the firm, the firm elected not to engage with our investigation. Despite being offered a number of opportunities to do so the firm did not provide any evidence to challenge Mr B’s complaint. The firm were clear in their dealings with the Legal Ombudsman that they had no intention of complying with any direction that we might make considering our involvement in this matter to be perverse. Based on the evidence that had been made available to this office, the Ombudsman was satisfied that Mr B had paid £20,000 to Bloomsbury Law but that they had not paid that money on to the intended recipient. As a result, the Ombudsman directed that the firm should repay the £20,000 to Mr B and also pay him an additional £500 to reflect the emotional impact of these events. The firm refused to comply with the Ombudsman’s decision and, as a result, the Legal Ombudsman had no option but to take enforcement action against the firm to ensure that they complied with the decision. Legal Ombudsman InsightThe firm’s decision to retain a substantial amount of their customer’s money and not to pay it on to a third party as instructed was clear evidence of poor service and, based on the evidence that was available, it was fair and reasonable to direct the firm to refund that money to their customer and to compensate him for the stress he had experienced. Read the full decision
PID-005 - Fraudulent activity on a conveyancing transaction Background Mr A instructed Bridgend based law firm Anthony & Jarvie (‘the firm’) to handle the conveyancing for the purchase of an investment property. Shortly before exchange of contracts was due to take place, Mr A received an email from an address belonging to the firm, which they had used to communicate with him throughout the matter. It told him to pay his deposit to a different bank account. The firm had not provided him with any emails about the dangers of cybercrime, nor did anything in their client care letter or email footer tell Mr A that they would never change their bank details, despite this being common practice. Mr A wasn’t able to contact the firm to confirm the account details and made the transfer. It soon came to light that the money had been paid to fraudsters. Only some of this money was ever recovered. He was later able to purchase the same property for a lower price around a year later. Complaints The Legal Ombudsman agreed to investigate a number of complaints about the firm’s security measures, communication during the retainer, and failure to respond to the complaint. The Legal Ombudsman’s view and approach Our decision found that the firm’s email address was the one that was hacked. While acknowledging that this made them victims of a crime, we were not satisfied they had adequate security systems in place to protect against this. We also found they did not warn Mr A about the dangers of these sorts of scams, which might have meant he was able to spot and avoid what happened. There was also criticism of the firm’s response when they were told about what had happened. They were slow to report the incident to their IT provider or provide advice to Mr A about what steps he should take. We did not find that Mr A bore any responsibility for what happened. We separately found that the firm failed to respond to the complaint Mr A made or provide him details of their insurer. Mr A’s bank was able to recover some of the money, but we decided the firm should be responsible for the remainder of the loss, subject to some other deductions around the fact Mr A was later able to buy the same property for a lower sum. In the specific circumstances of this case, we also decided the firm should reimburse Mr A for rent he would have collected for 12 months had the purchase completed. The financial loss came to £41,547.70, and a further £1,000 was directed to acknowledge the exceptional degree of upset and upheaval caused to him. Legal Ombudsman InsightsWhere service providers follow SRA guidance and practice notes on protecting against fraud and reporting incidents, and where they or their clients have fallen victim through no fault of the firm, we are unlikely to find that the firm are responsible for any losses. Cases like this however serve as a reminder of the importance of staying vigilant in this area, and the financial and reputational damage that could result where providers don’t do so. Read the full decision
PID-004 - Poor costs information Background Mr A engaged Birmingham-based law firm Allerton & Gladstone Ltd to handle possession proceedings he was looking to bring against a tenant. The matter required several court hearings, with some being adjourned. A dispute arose concerning payments made by Mr A to the firm during their instruction. The firm's position was that a sum of £24,040 remained outstanding. The firm ceased acting on his behalf following a meeting a year later. Possession was ultimately secured by Mr A nearly a year after the firm ceased acting for Mr A. ComplaintsMr A raised six complaints with the Legal Ombudsman about the service he received from Allerton & Gladstone which encompassed concerns regarding the firm's general management of the case, including the legal advice provided, preparation and submission of documentation for the hearings, transparency in relation to costs and the handling of his complaint. The Legal Ombudsman’s view and approach The firm’s service was deemed unreasonable for the following reasons: The firm did not serve the amended particulars of claim within the required timeframe. The firm did not prepare adequate bundles for a hearing. The firm’s cost information, invoicing, and record-keeping were poor, in that they failed to provide a cost estimate and did not discuss the potential for funding under Legal Expense Insurance at the outset, failed to account for payments of £1,000 and £2,400 Mr A had made to them, issued inaccurate and inconsistent invoices and made inaccurate requests for payment. The firm failed to give a reasonable response to Mr A’s complaint. The overall lack of accurate record keeping meant that it was impossible to ascertain with confidence how much work the firm had done or what fees they had accrued. As the firm did not provide a cost estimate at the outset Mr A had no idea how much the firm’s fees might be. Also, if the firm had investigated alternative funding methods Mr A might not have had any cost liability at all. Finally because of the poor service provided whilst working for Mr A the work the firm did was actually deemed to be of little value. As a result, the Ombudsman directed that the firm should waive any unpaid fees due to the firm which it was estimated amounted to around £16,000 plus VAT. A further payment of £500 was directed in recognition of the avoidable emotional impact of the firm’s poor service. Legal Ombudsman InsightWhere we can determine that the work done for a customer was of little or no value we can direct that the cost of that work be reduced or written off in full. Read the full decision
PID-003 - Employment The facts Mr A and Ms B wanted to make a claim against their former employer. They instructed London-based firm Scornik Gerstein LLP (“the firm”) to help them. Originally paying privately for the work, Mr A and Ms B were struggling to keep to the payment plan that had been set up. Nearly two years later, the arrangement for the payment of costs changed to a damages-based agreement (known in short as a “DBA”). This explained that the firm’s fees would be defined by 35% of whatever was recovered under the claim. The case was ultimately settled by agreement in Mr A and Ms B’s favour. Although there was a delay in payment, leading to work to enforce the debt, the employer paid both the compensation and the legal costs that had been agreed between them. On receipt of the settlement amount, the firm deducted 35% of the damages for its own fees (a total of £36,225) and Mr A and Ms B complained about that deduction. Unhappy with the firm’s response, Mr A and Ms B brought the matter to us. Mr A and Ms B’s complaint was that the firm deducted more fees than agreed in the Damages Based Agreement. They argued that the firm had charged twice for the work, taking its fees both from the employer and from Mr A and Ms B. The firm cooperated with our investigation, including responding to questions the ombudsman asked, before he made his decision. Our Scheme Rule 5.37a) says that, in deciding what is fair and reasonable, an ombudsman will take into account what decision a court might make.Our normal approach is to focus on the service, rather than the law, which means we find ourselves looking at the work a lawyer has done a case through a different lens to the lens a judge would in a negligence or contract claim. However, it was clear to us that some consideration of the law on DBAs was necessary, as the firm was strong in its belief that it had acted both appropriately and with the clients’ consent. The law In litigation, the winning party will usually get some or all of their legal costs paid by the losing party. With DBAs, there is a specific set of regulations, and section 4 of the DBA Regulations 2013 specifies that the winning claimant’s lawyer shouldn’t recover more than the percentage fee and the losing defendant shouldn’t pay more than the assessed costs. This is known as the Ontario model. Although employment cases are treated differently, our review of the law and the background led us to conclude that the courts would still say the spirit of the Ontario model applies. The firm was given the chance to comment but didn’t give us anything we considered persuasive, so our conclusion was that the 35% should only be taken once, unless there had been some specific and clear reason for a second payment that Mr A and Ms B gave informed consent to. Our decision The firm didn’t send us any cost information to support its account that Mr A and Ms B should have understood that they would be charged separately to any money recovered from the employer for legal fees. We’d expect something so important to be documented. The DBA the firm drafted did make reference to the possibility of charging for additional work to the employment claim, but it said the firm would tell Mr A and Ms B if that happened, and we saw no evidence that the firm did so. In An Ombudsman’s View of Good Costs Service, we explain that it’s good to tell clients about the possibility of costs that might happen in the future, but, if the costs then do need to be charged, the lawyer must tell the client that this is happening. The firm didn’t do that here, and we decided it was reasonable for Mr A and Ms B to expect the cost of the firm’s work was 35% of the settlement. So, when the agreement included the employer paying an amount equivalent to 35% of Mr A and Ms B’s legal costs, Mr A and Ms B were entitled to believe that was their debt to the firm paid. The Ontario model would mean that the firm had been paid once and in full, and that was enough. On the cost information point, a key feature of our guidance is that a client should never be surprised by the bill they receive from their lawyer, and it was clear to us that Mr A and Ms B were. We decided that the fair thing to do was to say that the firm’s fees should be limited to the amount recovered from the employer, so Mr A and Ms B should not have had any deduction from their settlement for the firm’s fees. Our final decision was that the firm should refund the 35% it deducted from the settlement (£36,225, including VAT), plus 3% interest on that (£2,391.53) and compensation of £600 for the inconvenience and upset caused, making a total remedy of £39,126.53. Read the full decision
PID-002 - Wills and Probate The death of a family member is devastating; however, a Last Will and Testament can provide financial security for loved ones, particularly in blended family relationships.A Will drafted for an individual’s circumstances can also ensure that the surviving partner can live in the family home, even if they will not inherit its whole value.Nonetheless, the best laid plans can be derailed if the legal professionals trusted with administering the estate fail to treat the beneficiaries fairly or deviate from the wishes laid out in the Will. Mr C believed he was providing for his long-term partner, Mrs B, when he instructed Southampton-based firm Underwood & Co (“the firm”) to draft his Will in 2005. He made sure that she would receive one-fifth of his estate and ensured that she was allowed to continue to live in the house he owned for as long as she needed.Although Mr C named Mrs B as an executor, when he died in XXXX, she felt unable to complete the task, so that fell to the reserve executors, Underwood & Co.Although Probate was granted in the same year as Mr C’s death, Mrs B received none of the £21,600 cash assets due to her before she died (almost two years later), nor did she receive any explanation about why the money had been withheld. After Mrs B’s death, her daughter and executor, Ms D, tried to establish the legacy due to Mrs B’s estate from Mr C’s estate, but the firm failed or refused to engage with her. Indeed, they provided only one update of substance, despite the house being sold 9 months later.Ms D’s attempts to complain to the firm, even using another solicitor, all failed to elicit a response or any of the money due, so she brought her complaint to the Legal Ombudsman nearly 5 years after Mr C had died. Ms D could complain to the firm and to the Legal Ombudsman because she was complaining about a service Mrs B, as a beneficiary of Mr C’s estate, had received when she was alive. Ms D could also complain, in her own right, about the service she received when she was Mrs B’s personal representative, and her estate was a beneficiary of Mr C’s estate. Unfortunately, the Legal Ombudsman could not start the investigation immediately, but Ms D and her solicitor continued to chase Underwood & Co. without success.Ms D finally received a letter in 2023 informing her that Mrs B’s estate would receive just £17,709, after deductions, from Mr C’s estate, but it took several further letters before Underwood & Co. explained why it was so much lower than expected. Underwood & Co. explained that they had received representations from another residuary beneficiary, one of Mr C’s four children, which made them look at the original notes made when the Will was executed. They concluded, without ever speaking to Mrs B or Ms D, that the wording of the Will was not as Mr C intended and they decided that Mrs B’s estate should not receive one-fifth of the value of the house. Following this exchange, Ms D raised further complaints with the firm and these were added to those dealt with by the Legal Ombudsman.After an extensive investigation, the Legal Ombudsman was able to establish that Underwood & Co. had paid the other four residuary beneficiaries £21,600 each a number of years prior but had withheld Mrs B’s share. However, the firm had never told Mrs B why they were doing this which meant that she died without having access to the cash Mr C had left to her in his Will. The ombudsman also found that the firm failed to respond to numerous legitimate requests from Ms D and her solicitors for information about Mr C’s Estate, his Will, the estate accounts and interim payments, and the legacy Mrs B’s estate was due. They also failed to respond to any requests for payment of monies due to Mrs B or her estate. Likewise, the firm had failed to deal with any of Ms D’s complaints. Nevertheless, although Ms D had seen that the house had been sold some time prior, the ombudsman found that Underwood & Co. did not respond to any requests for updates for a number of years. However, we established that the other four residuary beneficiaries had each received a quarter of the value of the house, within a month of the sale.The ombudsman was satisfied that the wording of Mr C’s Will meant Mrs B’s estate should have received one-fifth of the residuary of the whole estate, including the house. Moreover, the firm failed to provide the ombudsman with any legal authority to vary the Will from what was written and signed by Mr C in October 2006.Therefore, the ombudsman concluded that Underwood & Co. had failed to administer the estate in accordance with Mr C’s Will. This meant that the firm had diverted £51,235 from the house sale to the other four beneficiaries thus depriving Mrs B’s estate of that money. The Legal Ombudsman has a cap of £50,000 on a remedy, which is why we could not award the full amount, but the ombudsman decided that interest could be added to that amount as Mrs B’s beneficiaries had lost the value of their inheritance. In total, the ombudsman awarded Mrs B’s estate £60,962.99, including the interest and refund of fees. Read the full decision
PID-001 - Litigation Mr A instructed Harrow-based firm Ansham White Limited (‘the firm’) to act for him in his litigation matter. The Legal Ombudsman accepted for investigation 25 issues of complaint made by Mr A about the firm, of which 19 issues were upheld. The Final Decision directed the firm to pay Mr A £25,473.10. This case was important because there were so many service failings identified throughout the retainer. These included issues in relation to the firm’s preparation of the case for trial, and their representation of Mr A at that hearing. The firm then advised Mr A to embark on what was ultimately a costly and unsuccessful appeal.That could have been avoided had the firm either provided the barrister advising on the merits of the appeal with an accurate note of the hearing, or if the firm had obtained a transcript of the hearing. There were also difficulties during the investigation obtaining key evidence from the firm. The firm had acted for Mr A in his claim against his local council for damage caused to his property by large trees in the adjoining council-owned park. This was shortly after the trial had been adjourned. The trial was relisted for a later date. Mr A did not attend the trial, at which a fee earner from the firm represented him. His claim was partly successful, but he was left out of pocket, as he failed to beat the other side’s Part 36 offer. The firm instructed a barrister to advise on the merits of an appeal. The barrister’s advice was that there were reasonable prospects of success. However, the barrister said that his advice was based entirely on the firm’s note and recollection of the trial, so if the firm had any doubt about the accuracy of the note, then a transcript of the trial should be obtained. An appeal was lodged, without a transcript being obtained. The full transcript was not obtained until significantly later, and the firm did not provide a copy of it to Mr A until about 11 pm the night before the appeal. The transcript showed that the judge had heavily criticised the firm’s preparation for the trial, and their representation of Mr A at the hearing. It also showed that there were many inaccuracies in the firm’s note of the trial. Following receipt of the transcript, the barrister who was now representing Mr A at the appeal expressed concerns, including that the appeal would be ‘difficult and challenging’ and that the transcript had weakened the prospects of success. Those concerns were not shared with Mr A by the firm. The appeal was unsuccessful, and Mr A was ordered to pay the other party’s costs. The complaint issues accepted for investigation by this office broadly fell into two categories: complaint issues about the service in relation to the trial, and complaint issues about the service in relation to the appeal. Regarding the trial, the complaint issues upheld included the firm: failing to seek permission to rely on an additional expert report; failing to advise Mr A that he would need to obtain and seek permission to rely on appropriate medical evidence to support his personal injury claim; failing to arrange for the trial to be listed when Mr A could attend; failing to ask appropriate questions of the expert witness at the trial; and failing to seek an order that the trees be cut down and instead confirming only damages were sought. The complaint issues upheld that related to the appeal included the firm: failing to obtain the transcript within a reasonable time of the trial; failing to provide the transcript to Mr A until about 11pm the night before the appeal; failing to submit court documents on time; and delay. Regarding the remedy directed to address these service failings, a significant element was for the costs of the appeal. Had the firm’s service been reasonable, they would have obtained the transcript soon after the trial and before lodging the appeal, as clearly advised by the barrister. Had this been provided to the barrister who had initially advised on the prospects of an appeal, he would most likely have advised (as the later barrister did with the benefit of the transcript) that the appeal would be ‘difficult and challenging’. Had that happened, then it was more likely than not, that Mr A would not have agreed to pursue the appeal, and so not have incurred those costs. The remedy directed in the Final Decision comprised the following elements: a refund of 75% of the firm’s costs for work regarding the trial (as the value of that work was substantially diminished due to the many service failings upheld) which was £5,265; most of the costs of the appeal, including most of the firm’s own costs, counsel’s fees and the adverse costs order (as explained above) totalling £19,208.10; and a sum for the emotional distress caused to Mr A by these service failings of £1,000. This meant that a total sum was directed to be paid by the firm to Mr A of £25,473.10. Read the full decision