Mr N’s small business instructed the service provider to pursue the recovery of a debt.
Part way through the service provider’s work, Mr N spoke to his insurer who told him that they could pursue the claim on his behalf. Mr N was concerned that the service provider did not inform him he could use his business insurance, so he dis-instructed the service provider and then raised a complaint.
Mr N said that he would not have instructed the firm privately, had he been aware he could use his insurance.
Mr N raised a number of concerns with the service provider, including:
They failed to give updated advice on the prospects of his claim;
They gave poor advice on the funding options for the claim;
They delayed the progression of the claim; and
The complaints handling was poor.
In his complaint Mr N sought a full refund, as he said he would not have instructed the service provider, if he had been properly informed.
The service provider did not uphold the main aspects of Mr N’s complaint but did make an offer of £400 to recognise the impact of the matter on him.
As Mr N did not agree with the service provider’s conclusions, he referred the matter to LeO.
Ms N’s complaint was reviewed on receipt and was not considered suitable for Early Resolution. This is because, although the service provider made an offer, we could not say that was reasonable. The service provider clearly told Mr N that he would need to pay privately, when it was clear that he did have insurance he could use to fund the claim. This meant it was only suitable to pass the complaint to in-depth investigation.
The investigator requested and reviewed evidence, and upheld a number of Mr N’s complaints, including his complaint about the service provider’s poor advice on funding options.
As a result, the investigator recommended that the service provider should refund all of their fees, which ran into the thousands. Had they correctly informed Mr N insurance was an option, he would not have instructed the service provider to act privately.
The case decision also recommended a remedy of £400 to recognise the emotional effects of the service failings on Mr N.
Both Mr N and the service provider accepted the case decision, and the file was closed. As LeO did not find in the service provider's favour, a case fee was payable.
Service providers should explore whether insurance cover is a viable option.
Where LeO can clearly demonstrate a consumer would have taken different action had the service provider’s advice been reasonable, it is likely that any costs incurred in pursuing the wrong approach will be considered when assessing the appropriate remedy.
