Business & Finance

LeO seeks 9.6% budget rise equivalent to £7.20 per solicitor

The Legal Ombudsman (LeO) is seeking an “inflationary” 9.6% increase in its budget for 2023-24 to £16.8m as it aims to “drastically reduce” the complaints backlog.

Chief ombudsman Paul McFadden said it was now a question of “when, and not if” LeO’s “front-end queue” could be removed altogether, “something that for many seemed out of reach not so long ago”.

LeO’s budget rose by 5.3% for the current year to £15.3m, after a 13% increase the year before as the Office for Legal Complaints (OLC) – its governing body – sought to stabilise the organisation as performance plummeted.

Launching a consultation on LeO’s draft business plan and budget for 2023/24, the OLC said LeO would not request additional investment in staffing for 2023/24.

If inflation (excluding energy costs) and pay were excluded, it would be seeking a budget rise of 1.4%. However, including inflation at 10%, and a pay increase to staff of 8%, meant the budget would increase by 9.6%.

“This budget will enable LeO to build on the performance gains and stability embedded in 2022/23, while managing pressures relating to increased case resolutions, LeO’s strengthened focus on quality, and the monitoring and further development of changes to the scheme rules.”

LeO is paid for through a levy on each legal regulator in proportion to the number of cases arising from their communities.

The OLC calculated that this would mean that Law Society members would see their individual levy contribution increase by approximately £7.20 each, accounting for around two-thirds of the extra £1.5m that will be raised.

On staff pay, the OLC said an “inadequate” award would have “significant negative consequences” for staff morale and retention.

“An award of lower than 8% would not recognise the very real impact on staff of the rising cost of living.”

The OLC said benchmarking had confirmed that LeO’s existing offer for many operational roles was less than the median market salary.

In his introduction to the consultation, Mr McFadden said that, by the end of March 2022, LeO had resolved 40% more complaints than it had in 2020/21 and sustained this performance into the current year.

The number of people waiting had reduced for seven consecutive months, and “we remain on course to halve that front-end queue by the end of March 2023”.

Mr McFadden said that, by the end of March 2024, LeO’s backlog would have been “drastically reduced”.

He went on: “It is now a question of when, and not if, that queue is removed: something that for many seemed out of reach not so long ago.”

According to figures in the consultation, the backlog at the “front-end queue” or pre-assessment pool (PAP) had fallen from 5,862 on 1 April to 4,800, in line with expectations.

So far this year, complaint closures were 55% higher than the same period in 2021/22, 4,694 cases compared to 3,033.

As at September 2022, the time taken by the front-end team to resolve low-complexity complaints without investigation fell 72% to 119 days. For all low-complexity complaints, including those investigated, the journey time was 289 days, 11% lower than LeO’s target.

The PAP is on track to reach “a working level” of about 665 cases by the end of March 2024.

Mr McFadden said changes to the scheme rules, approved by the Legal Services Board in July, would ensure that LeO could take the “right approach at the right time” for users and providers of legal services.

The rule changes, which come into effect in April, will cut the time limit for complaining to LeO from six years to one year, and mean that complaints can be dismissed where has been no “significant loss” or where there has been “undue delay” in complaining.

The OLC estimated in the consultation that these changes would cut the PAP by 720 cases in the run-up to March 2024.

On the budget, Mr McFadden said that “like all organisations”, LeO faced “significant unavoidable costs and inflationary increases”, and there was a “very real risk of losing skilled people” if the cost of living was not taken into account.

Elisabeth Davies, chair of the OLC, said in her foreword: “The impact of the action LeO has taken is already being felt by users and providers of legal services.

“However, in the uncertainty of the current environment, the OLC and LeO must maintain a laser-like focus on getting LeO to a level of performance that is both acceptable to its customers and sustainable in the long run.”

She added that LeO’s updated mission contained “an explicit focus on the early resolution of complaints – and in its objectives, a renewed emphasis on customers’ experience and proportionality”.

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