Complaints handling in probate-accredited firms: improving consumer trust

ICAEW is making some changes to its Legal Services Regulations to support improvements in first tier complaints handling. The move is part of wider efforts to foster greater confidence in the way legal services providers deal with clients’ complaints.

The changes to Regulation 7, which covers complaints resolution, are necessary to comply with updated requirements and guidance from the Legal Services Board (LSB), which were introduced in May 2024. “They apply to all legal services regulators,” says Rachel, “and our fellow regulators will also be making similar, appropriate changes to their own regulatory frameworks.”

“The proposals are designed to help firms create a more transparent, effective and client-focused complaints process,” she explains. “So, we’re encouraging all our probate-accredited firms to engage with the consultation.”

Inadequate first tier response

First tier complaints are those made directly by the consumer to the firm involved. After receiving a complaint, firms have eight weeks to investigate it and produce a final written response. If the complaint is unresolved after eight weeks or the client isn't happy with the firm’s response, they can escalate the issue to the Legal Ombudsman (LeO), where it becomes a second tier complaint.

According to figures quoted by the LSB, almost half of cases referred to LeO have been inadequately handled at the first tier. The research also shows that almost one third (30%) of second tier complaints to LeO are made prematurely, and this is often due to poor understanding of, or confidence in, the first-tier process. These complaints have to be referred back to the firm, which adds time to the process and further erodes customer confidence.

Research from the Legal Services Consumer Panel (LSCP) provides further insight into how consumers view complaints handling. Its tracker survey for 2024 shows that, despite being dissatisfied with the provision of legal services, 21% of respondents didn’t take any action at all.

The 2024 tracker survey found that 51% of respondents would know how to complain about the legal services if they were dissatisfied. But this left 28% uncertain and 21% saying they would not know how to do this. The most common route for dissatisfied users to first complain about a problem was to the provider itself, with 48% stating they would do this. Consumers who had engaged an accountant or financial advisor were one of the groups least likely to complain to the provider (27%).

When the LSCP survey delved deeper, it found that, of all respondents who wouldn’t complain to the firm itself, 33% didn’t trust their provider to deal with it properly, 32% said it would take too long, and 28% thought it might affect their bill. Those using probate services were more likely to think that complaining to the firm would affect their bill (45%). “Complaints handling must be free of charge, and firms should make this clear in their complaints’ procedures.” Rachel comments.

Only a very small percentage of all respondents to the tracker survey had used an accountant for legal services. But accountants still need to be aware of the issues raised and keep these barriers in mind when advising their probate clients.

“These are concerning statistics, and may mean that, although clients do have a complaint, they’re afraid to raise it directly with a firm,” says Rachel. “This is a significant concern for consumers, firms, LeO, the regulators and the legal services market in general.”

Two key changes that firms need to consider aim to enhance

• consumer access to complaints processes; and
• learning from complaints.

Improving consumer access to complaints processes

These accessibility-related changes target ensuring a fair and prompt resolution for clients who may be dissatisfied with the service they received.

Currently, firms are required to notify clients about their complaints process in writing at the beginning of an engagement. Under the new proposals, firms will have to provide this information not just at the start of engagements but at key subsequent stages in the relationship. This would be at the conclusion of the matter, upon request, or if a complaint is made during an engagement.

“If a client complains during the retainer, then we would expect you to provide the complaints procedure again,” explains Rachel. “This means the client has always been recently reminded of the process, as well as of who they need to refer their complaint on to if they’re not satisfied.”

“We’ll be taking a proportionate view on what’s reasonable in the circumstances,” she adds. “For example, if a client complains immediately after the engagement and you’ve just sent them the letter, we won’t expect you necessarily to send it again. But if it were halfway or towards the end of the retainer, it would be reasonable to remind them of your complaint procedures. You would also be required to do this again at the end of the engagement.”

“It’s also important to remember that a complainant could be a client, a former client or a residuary beneficiary,” says Rachel. “LeO will often consider complaints raised by beneficiaries, so they should also be provided with your complaints procedures just like your clients.”

Improving accessibility also means adapting your complaints procedures to meet clients’ needs. This includes ensuring it is communicated in a reasonably tailored format where appropriate and thinking more broadly about how clients might prefer to raise their concerns. It is important to ensure complaints procedures are reasonably easy to locate, access, and initiate for all complainants.

We have adopted the Legal Ombudsman’s definition of a complaint as an “oral or written expression of dissatisfaction”. Therefore, under the Regulations firms should enable complaints to be made in any reasonable manner that makes it accessible to the client. What is a ‘reasonable manner’ is a matter for firms to decide as you know your client best. Generally, communication should be in writing, but you should be prepared to meet individual needs where appropriate.

Being attentive to any early signs that a client or beneficiary might be unhappy with the firm’s service, could also prevent concerns escalating to a formal complaint.

Learning from complaints

Another key change is an enhancement of ICAEW’s existing provisions on learning from complaints. “This aspect is already there in the regulations,” explains Rachel. “But we’re strengthening it so that firms will need procedures to review their complaints procedures periodically and reflect on any wider learnings at the end of each complaint process. Firms must also carry out any necessary staff training and provide suitable support to address any identified risks and issues.”

The LSB’s statement of policy also means that regulators must ensure the best possible complaints resolution system for consumers by using information and intelligence gathered from first and second-tier complaints. This includes identifying any thematic areas of weakness in complaints handling, overall timeliness and the number of premature complaints referred to LeO.

“To comply with these changes, there will be a new requirement for firms to report first tier complaints data in the annual return,” explains Rachel. You will need to report the:

• number of complaints received
• category of complaint
• number of complaints resolved within eight weeks.

ICAEW will analyse this data and publish a report highlighting its findings. “The results will help us provide targeted contextual guidance to support firms in handling complaints effectively,” says Rachel. “We will use the data promote good practice and continuous improvement, which can only be better for both consumers and firms.”

“Our reports won’t contain detailed information about individual firms,” she emphasises. “Instead, we’ll provide the data on an aggregate basis and identify general trends. As a regulator, this means we’ll have better data-driven insights on common complaints, how firms are handling them, and how to prevent them. And from the firm’s perspective, the data will inform their own processes and help them better understand what’s happening in the wider market and how they compare to other firms.”

Under the existing regulations, firms are already required to reflect on the complaints they receive, identify any lessons learned and make improvements as appropriate. Firms must also keep records of the way any complaints have been handled.

“You will already have the necessary records available,” says Rachel. “But the reporting changes mean it’s going to be even more important than ever to maintain those records, both for reviewing and reflecting on learning points, but also to provide data about your handling of complaints to ICAEW on your annual return.”

Continuous improvement

Complaints are an expression of dissatisfaction but, as such, they also provide an opportunity to consider how you can provide a better service and support clients more effectively.

“We’ve always encouraged our accredited firms to handle complaints fairly and learn from the complaints they receive,” stresses Rachel. “So, while the proposed changes may mean you will need to update your complaints procedures and staff training, they are mostly about enhancing what you’re already doing.”

In responding to the consultation, Rachel recommends firms consider their current complaints processes and identify areas they may need to change, or where they might need additional support and guidance from ICAEW. “That would be really useful feedback for us,” Rachel says.

“We want to improve consumer confidence in complaints handling and foster a culture of continuous improvement, so we need our firms to engage with the consultation, provide their views and let us know where they need support.”

Administration of oaths

The consultation also includes amendments to enable the introduction of the reserved legal service of the administration of oaths.