Legal Ombudsman seeks 10% increase in budget

The Legal Ombudsman (LeO) has proposed a 10.2% increase in its budget, or £1.8m, as the post-pandemic increase in the number of complaints has not abated.

It said that “the marked feature of LeO’s data is that, over several years, standards of service and complaints handling haven’t improved in legal services – and in some areas, have worsened”.

In 2023/24, LeO found evidence of poor service in how providers handled complaints in 46% of the cases it investigated.

The draft 2025/26 business plan and budget, put out for consultation at the end October, said “persistently high numbers of people who’ve relied on legal services at critical times in their lives are turning to LeO, with demand having never returned to pre-pandemic levels”.

In 2025/26, LeO expects to receive 9,700 new complaints, and take on 7,500 for early resolution or investigation.

It also said it is consistently resolving 25% more complaints than in the past, including half through early resolution, and in 2025/26 expects to resolve 8,800 complaints.

“In the context of high demand, the OLC is aiming to balance investing in resource to reduce the queue of people waiting; to help the legal sector prevent demand and consumer detriment at source; and to ensure LeO is harnessing the power of technology to enhance its service and generate savings and efficiencies.”

The current year’s budget of £18m was 7% (£1.2m) higher than the previous year. The proposed budget for 2025/26 is £19.8m. Nearly half of the extra cash will go on hiring more investigators, mostly to help bring down the queue of complaints awaiting investigation, which has not gone down as quickly as LeO hoped.

The extra money would allow LeO to reduce the average time for a case to be allocated to an investigator by 26% (from 149 days to 110 days), compared with by 1.3% (to 147 days) without it.

It said that, if demand increased at a similar rate as seen this year for the next two years (5%), then LeO would reach an “acceptable position” in terms of its queue and wait times by the end of 2026/27.

The average end-to-end customer journey time for cases of all complexities is now under 300 days, with almost half of cases now being resolved in under 60 days. But the most complex cases are taking over 720 days (almost two years).

LeO has also proposed doubling the case fee – charged for complaints resolved in the consumer’s favour where the service provider did not take reasonable steps to resolve it – to £800, “recognising the role of this income in both offsetting the levy and in incentivising better complaints handling through underlining the ‘polluter pays’ principle”.

The draft plan warned that “a significant shift in complaint culture, led by regulators and the profession – underpinning positive engagement with LeO’s insights and interventions – is required to address unnecessary escalation of demand to LeO”.

It continued: “This also extends to the sector’s wider attitude to feedback on the service they’ve provided, so this is embraced as an opportunity to improve, rather than ignored or dismissed.”