The OLC is a statutory body, established by the Legal Services Act 2007 (the Act), and is accountable to both the Ministry ofJ ustice (MoJ) and the Legal Services Board (LSB).
Section 117 of the Act requires the Legal Ombudsman to “have regard to such generally accepted principles of good corporate governance as it is reasonable to regard as applicable to it”, and the purpose of this document is to demonstrate how the OLC is discharging this obligationunder the Act. As a statutory body, the OLC complies with the Corporate Governance in Central Government Departments: Code of Good Practice 2011(the Code) where it is deemed practical and relevant to its circumstances.The OLC will review and update this Operating Framework at least every two years.
The OLC was established to provide consumers of regulated legal services and of the services of Claims Management Companies with access to an independent and impartial Ombudsman scheme. The Ombudsman can resolve complaints involving their service provider whilst at the same time driving systemic improvement by feeding back information that helps service providers improve and informs the expectations of consumers of those services. In October 2010 the OLC established an Ombudsman scheme for the legal sector, which is called the Legal Ombudsman (LeO). The Legal Ombudsman introduced a second jurisdiction for the customers of Claims Management Companies in January 2015.
The OLC is the Board to which the LeO Executive is accountable for the effective delivery of both schemes.
LeO’s purpose is to provide a service where disputes are resolved efficiently and with the minimum offormality, by an independent person. In fulfilling this purpose, it is informed by the best practice of those who administer Ombudsman schemes. Further details of LeO’s delivery of these schemes can be found in the OLC Annual Reports and LeO’s strategy and business plans. These are available from theLeO website.
The OLC is required by Part 6 of the Legal Services Act 2007 (the Act) to operate in away that promotes the regulatory objectives as set out in section 1(1) of the Act:
The OLC’s Annual Report will include details of the extent to which it believes that LeO has met the requirements of the regulatory objectives
The LSB,with the approval of the Lord Chancellor,is responsible for appointing a Chairman of the OLC for a term of three to five years. The appointment is subject to a pre-appointment hearing before the Justice Select Committee. The committee’s views are non-binding but the Lord Chancellor and LSB will consider any relevant conclusions and recommendations before finalising the appointment.
The LSB, after consultation with the Chair,is responsible for appointing at least six, but not more than eight OLC Board members for a fixed period up to five years. The LSB must ensure that a majority of the members are lay persons. The LSB is responsible for ensuring that the OLC Board skills, experience and knowledge reflects not only its current jurisdiction, operating environment and challenges but also any potential future risks and changes in focus that might require different skills.
Both the LSB and OLC are aware of the provision in the Act (para 3(1) of Schedule 15) allowing an ombudsman to be appointed as a member of the OLC board but the OLC do not currently choose to recommend to the LSB that they should utilise this provision.
A person who has held office as a member may be re-appointed once only, for a further period (whether consecutive or not) not exceeding five years.
A member may at any time resign from office by giving notice to the LSB. A member may also be removed from office by the LSB subject to the provisions outlined in the Act. The Chairman of the OLC may be removed from office subject to the provisions outlined in the Act but only with the consent of the Lord Chancellor.
Detailed role requirements and person specifications for both OLC Board Chair and members are held by the LSB.
Under the terms of the Act (section 122(1)(a)), the OLC must appoint a Chief Ombudsman.
Under the terms of Managing Public Money (para 3.2.3) the Principal Accounting Officer will normally appoint an Accounting Officer for the OLC. Whilst this may be the Chief Ombudsman, it may also be some other person employed by the OLC under the terms of the Act (para 13 of Schedule 15). The current arrangements are that the OLC has chosen to appoint a Chief Executive to whom the Principal Accounting Officer has delegated the functions of Accounting Officer for the OLC.
The Chief Executive and Chief Ombudsman are supported by a Senior Management Team (SMT), led by the Chief Executive. The OLC has delegated relevant day-to-day authority in accordance with its scheme of delegation, in order to facilitate the management of LeO and deliver the day-to-day operation of the LeO scheme.
Role requirements and person specifications for both CEO and Chief Ombudsman will be held by LeO and will be periodically reviewed and updated by the OLC board.
The OLC is supported in its stewardship by three committees: the Audit and Risk Committee (ARAC); the Remuneration and Nomination Committee (RemCo); and the Category 1 Decision Committee (Cat 1).
ARAC is responsible for providing appropriate independent oversight and advice to give assurance to the OLC and Accounting Officer that:·
RemCo is responsible for the overall remuneration approach and policy relating to all members of staff working within the LeO scheme.
Cat 1 committee is responsible for considering applications from the Chief Ombudsman for the Board to authorise publication of (an) ombudsman decision(s) in accordance with Category 1 of the OLC Publishing Decisions Policy.
All committees will be chaired by a lay member and will have a majority of lay members.
The OLC will ensure that LeO operates management information and accounting systems. These systems enable LeO to report in a timely and effective manner on its performance, both financial and non-financial, against the budgets and targets set out in the business plan.
After the end of each financial year, the OLC will publish an annual report of its activities together with its audited annual accounts. As required by the Act (Section 118 and para 26(3) and (4) of Schedule 15),a draft of the report will be submitted to the LSB and the MoJ in accordance with a mutually agreed timetable, prior to the proposed publication date.
Matters reserved for the approval of the OLC are detailed in the Scheme of Delegation.
In addition, the OLC shall receive reports for approval, decision or information as necessary, and may include items listed in the Scheme of Delegation, such as:
The OLC will publish a schedule of matters reserved to the OLC and a scheme of delegations on the LeO website. These will be reviewed regularly, but in any event at least every two years.
The OLC operates in accordance with the principles of good governance, as advocated in the Code:
In accordance with these principles, the OLC will:
OLC members should act in the public interest in keeping with the Nolan principles of public life;
the OLC’s activities should be recorded and communicated as appropriate within LeO. The OLC will normally invite members of staff to observe all or part of their meetings;and
where OLC members have concerns which cannot be resolved about the running of the OLC, LeO or a proposed action,they should ensure that their concerns are recorded in the minutes.
As part of a regular review of OLC effectiveness, the Chair of the OLC will:
As part of a regular review of OLC effectiveness, the Chair of the OLC in conjunction with the LSB will:
An evaluation of the effectiveness of the Board and its Committees will be conducted annually, under the leadership of the Board/Committee Chairs.
All individual Board Members will be appraised annually by the Chair. This appraisal will include any feedback provided by any relevant Committee Chair(s).
All Board Member appraisals will be retained by the OLC Board Secretary and copied to the LSB.
The process for evaluating the performance of the Chair of the OLC is maintained by the LSB.
The Chair of the OLC, through the OLC Board Secretary, should ensure that new OLC members receive a full formal and tailored induction on joining the board. This induction should cover such issues as:
The emphasis of the induction will vary depending on the individual and their experience and knowledge of the public sector and the organisation. The Chair of the OLC should ensure that:
Papers submitted to the OLC should be relevant,concise and enable the OLC to understand the background and issues for effective debate and, where appropriate, decision. Information should be drawn from readily available and reliable sources and care taken not to duplicate reporting requirements,or to collect information that is not used.
Information should cover the main areas of the OLC’s responsibilities and the OLC should agree the form and content of regular reports it considers appropriate. The OLC may consider other reports as required from time to time.
The OLC Board Secretary shall be accountable to the OLC,report directly to the Chief Executive (with direct access to the Chair of the OLC) and shall be a member of the LeO Management Team.
The OLC Board Secretary shall possess appropriate skills and should receive appropriate training. This should be supported by clear backing from the Chief Executive and Chair of the OLC.
The OLC Board Secretary may also have other responsibilities, as agreed with the Board, which may include:
The OLC shall have a separate document that details its rules of procedure and its membership.This will be reviewed by the Board Secretary at least once every two years and any changes (other than those required to reflect the changing membership of the Board) must be approved by the OLC Board. The document will be available on the LeO website.
The OLC will ensure that an effective system of risk management is in place and this shall be monitored and reviewed by the Audit and Risk Assurance Committee (the Committee).
The Committee will independently evaluate the effectiveness of systems established by management to identify, assess and manage risk. Particularly:
Members of the Audit and Risk Assurance Committee will be from the OLC, with at least one member having recent and relevant financial experience. The Chair of the Committee shall have free and confidential access to the Accounting Officer, Chief Executive Officer, Chief Ombudsman, Director of Corporate Services, Head of Finance, in-house Solicitor, Head of Internal Audit and National Audit Office. The Chair of the Committee will keep the Accounting Officer and the Chair of the OLC informed of any discussions to the extent appropriate.
The OLC is a statutory body accountable to both the Ministry of Justice (MoJ) and the Legal Services Board (LSB). The details of these governance arrangements are contained within:
Nothing in these governance arrangements will interfere with the independence of the Chief Ombudsman. In no circumstances will the OLC, intervene or engage in correspondence on substantive issues inrelation to the determination of an individual dispute by an Ombudsman,either at the stage of initial determination or, if a complaint (service related or otherwise) is made, about the substance of a decision after the event. The OLC will at all times encourage the MoJ and LSB to do likewise.
The OLC will ensure that the Chief Executive Officer prepares a corporate and business plan annually. The contents will reflect the OLC’s statutory duties and, within those, its contribution to the MoJ’s strategic objectives and specific targets set or required by the LSB.
The corporate plan will cover three years ahead and the business plan will detail the activities to be undertaken to achieve that plan during one specific business year, allowing for detailed budgeting and resource allocations. The OLC will informally consult theMoJ and LSB on the issues to be included, the timetable for preparation, and the indicative budget, ahead of formal consultation with other stakeholders.
The OLC will ensure that the Legal Ombudsman provides an annual assurance report to the MoJ in support of the Permanent Secretary’s accountability for security arrangements across the MoJ including its NDPB’s and Agencies and that there is an Information Assurance(IA) policy in line with Ministry of Justice IA policies.
The OLC will ensure that LeO has a published policy for the handling of complaints about the Chief Ombudsman, the Chief Executive and members of Legal Ombudsman staff.
Complaints about the OLC members, including the Chair will be dealt with under a separate LSB policy.
The OLC will ensure that LeO;
Has appropriate measures in place to protect the security and confidentiality of all personal data;
has an FOIA Publication Scheme as per the Information Commissioner’s model and registers with the ICO as a data controller;
maintains a central monitoring record of FOIA and DPA requests received and dealt with;
has an accounting process to record and account for any payments required for any FOIA or DPA requests;and
disclose all ministerial directions that would be subject to public disclosure under the Freedom of Information Act 2000 (were an appropriate request made) in the governance statement for the period in which the direction was granted.
Within the financial arrangements approved by the Lord Chancellor and the Treasury, in terms of managing public money, the OLC will have responsibility for the recruitment, retention and motivation of its people.To this end the OLC, through Rem Co, will ensure that:
The role of the OLC will, from time to time, be reviewed by the MoJ to ensure that it remains relevant in the light of changes to the external environment and to government policy. The precise timing and nature of any such review will be agreed between MoJ, and OLC and may take account of the timing of any similar review of the LSB. In the event that the OLC is wound up following such a review, the MoJ and OLC will follow the arrangements set out in Para 113 of Annex C of the Framework Document between the MoJ and OLC.