Consumers could suffer if legal ombudsman remit is widened

The Law Society has warned that a proposal by the Legal Ombudsman to cover complaints about unregulated legal providers could be detrimental to consumers.
In its response to a Legal Ombudsman (LeO) consultation on proposals to widen its remit to cover complaints about unregulated legal service providers and other professionals the Law Society warned that, by extending its remit LeO will cause consumer confusion about who is regulated and who isn’t.
The Law Society is concerned that the Legal Ombudsman’s effectiveness and efficiency in its core jurisdiction could be affected by taking on the unregulated segment of the legal services market. It currently handles complaints from clients of regulated legal service providers in England and Wales.
The LeO proposals are, in part, a response to a new European directive that will require service providers to have third party complaints handlers.
Law Society President Nicholas Fluck said: “We recognise that the implementation of the alternative dispute resolution (ADR) directive coming from Europe may lead to unregulated providers requiring an ADR provider. However we do not believe it is appropriate to use the Legal Ombudsman’s voluntary jurisdiction to provide this due to the adverse effect on their core jurisdiction.”
He added: “We also foresee difficulties in the Legal Ombudsman managing a voluntary scheme. Unscrupulous providers may use membership of such a scheme to provide them with legitimacy and allow them to take clients’ money before disappearing, leaving the Legal Ombudsman to deal with the complaints. The Legal Ombudsman would be in no position to help clients who had lost money.”

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