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Lawyers & third party complaints

A house purchase is delayed because the seller’s conveyancer loses some paperwork, writes Steve Brooker.  A victim of a violent attack is treated abusively by prosecuting counsel.  Beneficiaries are denied an inheritance due to a defective will. These are just some of the situations where a lawyer’s work can have a major impact on people other than those buying their services.

At the Legal Services Consumer Panel, our role is to represent the interests of consumers when decisions are made about how lawyers in England and Wales should be regulated. We’ve just published some thinking – HERE – on under what circumstances the Legal Ombudsman should take on complaints from individuals who are not the lawyer’s own client, or ‘third parties’ as they are technically known. The Legal Ombudsman is consulting on this at the moment as part of a review of their scheme rules.

Unsurprisingly, this proposal has met with strong opposition by some lawyers. Lawyers must act in the best interests of their client, which may quite properly involve doing things that could make things worse for the other parties. Wouldn’t this just simply encourage an embittered ex-husband with nothing to lose to complain about his former wife’s legal team, or home buyers in a long conveyancing chain to play the blame game?

The Panel doesn’t think all third parties should be able to complain to the Legal Ombudsman in every situation, as in our adversarial legal system we must be careful that the consumer redress system does not create conflicts of interest or impair the proper pursuit of justice.

However, the current system is unfair, as it bans all third parties from complaining. In our view, there are a range of situations when allowing non-clients to complain would be the right thing to do.  

We think a better approach would be to allow the Legal Ombudsman to accept some types of third party complaint whilst excluding those which fall on the wrong side of what is acceptable.

There are situations where a lawyer carries out work intended to benefit a consumer, but for technical reasons they are treated as a third party since this work was arranged through someone else. For example, legal work on a remortgage currently falls outside the Legal Ombudsman’s remit because the lender, rather than the homeowner, is considered to be the client. Similarly, if an unregulated estate administration business subcontracts the task of filling out probate forms to a firm of solicitors, the consumer is unable to complain because, strictly speaking, they had employed the company, not the solicitor, to do the work.

Such technical niceties seem especially unjust and would appear to frustrate the intention of the contract on which consumers rely in good faith. This also encourages lawyers to create complex business structures in order to get round regulation.

The Legal Ombudsman may currently accept complaints from beneficiaries about poor service by lawyers dealing with an estate after someone dies. However, on our reading of the rules, it cannot act should those same beneficiaries lose their inheritance because the will was poorly drafted. Of course, the sums of money at stake for the beneficiaries can be huge, not to mention the emotional upset and family arguments this can cause. Last year a mystery shopping exercise found that one in five wills prepared by solicitors and unregulated will-writers was substandard. This makes it really important to give people denied their inheritance due to bad legal drafting the right to complain to the Legal Ombudsman and, where appropriate, receive an apology or some compensation.

Another example is when lawyers fail to protect someone’s personal information. This is critical in legal services because of the sensitivity of the issues that lawyers can deal with. There are examples of laptops containing personal details falling into the wrong hands. As a consumer, you can report problems to the Information Commissioner who can investigate and penalise firms found to have breached data protection laws. But the Information Commissioner cannot compensate the people affected, nor can anyone complain to the Legal Ombudsman unless they are the lawyer’s client.

These are tricky issues and deciding where to draw the line isn’t easy. But we think there are a range of situations where it is unjust to deny third parties access to the Legal Ombudsman. Not only is this unfair, it also means lawyers have weak incentives to behave well towards non-clients in the first place. In our response to the Legal Ombudsman’s consultation, we have recommended that its remit should be extended to allow third parties to complain to them except in specific situations where doing so would impair the proper pursuit and administration of justice.

 

 

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