Legal Ombudsman guidance on handling complaints

Each year the Legal Ombudsman (LeO) publishes a report to provide helpful data about the complaints it receives and investigates, and how to avoid them.

For the most recent report, visit the LeO webpage dedicated to annual trends in complaints accepted and resolved by them.

• View LeO Complaints Information Reports webpage

LeO updated its guidance earlier in 2024 to help firms understand its view on good costs service. In the third edition of the guidance, LeO reminds firms that they must communicate with clients about the ongoing cost of the service the firm is providing. Failing to do so could result in complaints made by clients.

Many complaints arise because firms have not updated clients about the cost of a matter as it progresses. In fact, one in ten complaints referred to LeO relate to disputes around billing.

LeO has confirmed that it is not enough to simply provide cost estimates to clients at the start of a matter and bill at the end. LeO will look for evidence that firms have kept a client informed about the cost of the work on a regular basis.

The guidance outlines three key principles that probate firms should keep in mind.

1. A client should never be surprised by the bill they receive.
2. If a firm intends, now or in the future, to charge a client for something, the firm should tell the client clearly, as soon as they reasonably can.
3. Firms should keep clear and accurate records of all cost information, including any confirmation from the client that they understand the charges.

Firms should consider these four key steps to avoid complaints about costs.

1. Provide regular cost updates even if estimates have not changed

Your engagement letter is a key piece of evidence used by LeO to evaluate the information you provide about your costs and services. Depending on your agreement with the client, this could include an accurate explanation of:

• the agreed work you will or will not carry out;
• likely timescales;
• information about your fee structure or fixed fee; and/or
• a realistic estimate of costs.

However, this is not where good costs information ends. Regulation 7.2  of the Legal Services Regulations states:

Firms should ensure that their clients understand and agree to the process and these costs and should keep their clients updated on matters as the engagements proceed.

This means that unless you have agreed a fixed fee in advance, you should provide updated costs information or reminders throughout the engagement. Consider proactively updating your client even if delays from HM Courts & Tribunals Services (HMCTS) mean matters are not progressing. This is good practice in a lengthy engagement, even if your initial fee estimate has not changed.

Regular communication with clients about costs can also improve perceptions of customer service. You could consider providing regular costs updates in your communications with clients. For example, the following could be stated: “Because every estate is unique, we'll keep you updated on costs regularly, so you can stay in control.”

2. Provide clear explanations, options, and choices

Help clients maintain control of their costs and make informed choices about your services. For example, clients may need to manage beneficiaries’ expectations on costs and their impact on the net estate to avoid any disputes or surprises at the end of an engagement. This is particularly important given that probate matters can sometimes take several months and can be a stressful experience for executors and beneficiaries.

This is a requirement of regulation 3.6  of ICAEW’s Legal Services Regulations which sets out that firms:

…should also provide information to enable their clients actively to manage their costs, including being prepared to explain to clients aspects of their work as it progresses and provide them with revised choices and costs estimates if the original estimates are likely to be exceeded.

If an engagement is very complex and/or lengthy, you should discuss any costs implications proactively throughout the engagement. This can include offering guidance on potential cost-saving measures or alternative fee options and courses of action. For example, flexible fee structures could be introduced to unbundle certain aspects of your services. Whatever charging structure you use, LeO expects you to explain how it works, and what it does and doesn’t include, so that it is crystal clear.

Furthermore, if unforeseen circumstances arise and the original fee estimate is likely to increase, inform clients at the earliest opportunity. It would also be good practice to explain why the increase could not reasonably have been anticipated from the outset.

3. Keep written records and review them

Firms should maintain clear and accurate records of all cost-related information provided to clients. This includes documenting any costs updates and estimates, agreements, or discussions about costs, and confirmation from clients that they understand the charges.

ICAEW recommends taking time to reflect on how well you manage your client’s expectations about your service, typical timescales, and costs from the outset. Consider reviewing your costs advice and billing practices to address potential billing issues before they escalate into complaints.

4. Reflect on your compliance

Finally, to avoid complaints, regularly review your costs and complaints practices against LeO’s guidance and ICAEW’s regulations and guidance to ensure ongoing compliance. You must also publish clear costs and service information on your website to comply with our transparency rules.

• You can find out more by reading LeO’s guidance: An Ombudsman's View of Good Costs Service
• Or email the Legal Ombudsman at: enquiries@legalombudsman.org.uk

Visit the LeO website for more information on helpful data about the complaints it receives and how to avoid them, including its Annual Complaints Data Overview 2019/20

• ICAEW Legal Services Regulations
• ICAEW Best Practice Guide to Price and Service Transparency
• ICAEW Probate Engagement Letters
• ICAEW Legal Services Compensation Scheme
• Probate register
• Probate resources

LeO has changed its postal address. Be sure to update all your engagement letters or complaints information for clients and send all written correspondence to:

Legal Ombudsman
PO Box 6167
Slough
SL1 0EH

Clear processes for making complaints

Clear internal procedures to deal with complaints are important. Clients should know at the start of any engagement who they can complain to. You should provide the details of the probate contact principal or Head of Legal Practice (HoLP), should the circumstances arise.

Clients have the right to complain to ICAEW and LeO. Be sure to inform clients about ICAEW’s Probate Compensation Scheme either through an engagement letter and/or standard terms of business. You could also make the information available on your website.

If a complaint relates to a service issue it should be referred to LeO in the first instance.

Price and service transparency: best practice

ICAEW’s 2019 research on the provision of transparency information showed there is room for improvement in transparency in all areas from pricing disclosures, the provision of information relating to complaints and redress, compensation arrangements and professional indemnity insurance.

ICAEW resources are available to you to help with clear communications and adopting our transparency recommendations can help you avoid these common areas where complaints can arise.