Legal Services Consumer Panel
Revisiting the maze
29 September 2015
At the end of August the Legal Ombudsman (LeO) withdrew its application to the Legal Services Board to become an approved Alternative Dispute Resolution (ADR) provider under the EU Directive on Consumer ADR. This wasn't something we were expecting, and we didn't see this coming. The main question now is what could be the implications of this decision for consumers of legal services? And I think the answer could be brief - confusion.
LeO's application withdrawal means that although regulated lawyers will continue to meet their obligation under the Legal Services Act to signpost to LeO, they may not meet their obligation to also signpost to an ADR entity as required under the EU Directive, unless they choose another accredited provider certified by the Chartered Trading Standards Institute. Significantly, this further delays work to enable LeO to handle complaints from unregulated legal services providers, something which is long overdue.
The confusion has started and it looks set to continue. To prevent non-compliance with this information requirement obligation, in early September the Law Society confirmed the names of those ADR entities currently certified to deal with disputes in the legal services sector. Those noted were Ombudsman Services, Promediate and small claims mediation.
On 10 September, the Law Society changed its advice; instead of the three ADR providers it had listed previously as acceptable, it asked its members to visit the Chartered Trading Standards Institute (CTSI) website, check the list of approved providers on there, and choose one who had been approved as an ADR entity. Clearly, the Ombudsman's application withdrawal caught the Law Society as unawares as it did us.
And that's still not the end. The ADR Directive is voluntary for businesses. So even though law firms will have to signpost to an additional CTSI certified ADR provider, that doesn't mean that they will be using that service: they just have to say that it exists.
This is the exact scenario the Legal Services Consumer Panel hoped to avoid. Instead of the legal sector having one body to signpost to, we now have LeO for regulated lawyers plus a multiple choice of ADR providers.
LeO is now consulting on whether it should change its scheme rules and apply to be an ADR entity.
The Panel will of course be responding to LeO's consultation on its scheme rules and worryingly there are risks for even more confusion - what if LeO faces further delays in applying to become an ADR entity, or worst case scenario it fails to get certified? What if regulated providers are against the rule changes proposed by LeO? What if the suggested CTSI listed ADR providers, which currently lack the experience and expertise of LeO through sheer age, fail to provide correct redress or for consumers?
ADR has gained widespread acceptance among both the general public and the legal profession in recent years. But these developments feel as though they could be at odds with the fundamental spirit of ADR. Rather than working to create a maze of options hampered with dead ends, we should be working to provide a dispute resolution service based around the needs of consumers, and one that offers a clear route to redress for all consumers of legal services - regulated and unregulated.