LeO backs redress extension for unregulated providers

The Competition Market Authority (CMA) has been informed by the Legal Ombudsman (LeO), that the time is now right to allow complaints from clients of unregulated legal service providers.

Clients are unclear about which areas of the sector are regulated and which are not, and the LeO has urged that more knowledge needs to be shared and the power given to consumers.

The CMA has asked all the key legal organisations for ways to improve consumer knowledge of the sector.

Currently, clients of regulated providers are the only ones who can make complaints to the LeO. When the CMA reports back later this year,  enabling clients who use unregulated services to complain to the LeO is likely to be one of the main priorities it wants to change.

The LeO says it is ‘difficult to argue for the distinction’ between regulated and unregulated providers to be maintained.

It added:

“If sufficient risk exists for a solicitor who is writing a will, administering an estate, or providing immigration or employment advice then arguably the same risks exist for those unregulated providers, and the same protections should be in place.”

LeO have also asked the CMA to consider which areas of the unregulated sector might fall under any new redress rules. Will-writing, paralegals and immigration are often considered, but there could be merit in looking more broadly at those giving general legal advice and special bodies such as law centres and trade unions.

Under the Legal Services Act, law firms are required to have a first-tier complaints process, signpost to the ombudsman service and cooperate with investigations and decisions.

LeO says there must not be an assumption that the current model and powers are appropriate for the unregulated sector, and there should be understanding of the nature and complexity of the likely complaints if redress is to be extended.

Any extension of the ombudsman’s powers will require an increase in the organisation’s budget, and the LeO response makes clear on several occasions that any such move would be dependent on increased funding.