Phillips: Radical changes needed
The Legal Ombudsman (LeO) has hit crisis point again after it was forced to backtrack on its request for a 20% budget rise, with the Legal Services Board (LSB) describing its performance as unacceptable.
The oversight regulator’s lack of confidence in the complaints-handler seems to be shared by LeO’s staff, with a staff survey finding that more than 50% of employees want to leave in the next year, while half of new recruits leave in their first two years.
The original plan by the Office for Legal Complaints (OLC) – the board that oversees LeO – to seek a 19.5% hike in its current £12.3m budget was strongly opposed by the Law Society and Bar Council.
Papers made public yesterday show that, despite this, the OLC actually considered upping its ask to 30%, but eventually it applied for the LSB to approve a 21% increase, taking the budget to nearly £15m.
But the papers from the LSB’s main board meeting last week show that the oversight regulator’s executive recommended rejecting this.
The board was told that the budget was “inadequately evidenced and does not make out a sufficient case that the increases asked for will lead to the improvements in performance modelled within it”.
There was also concern about “late and significant” amendments made to the budget, including a ‘fast stream resolution’ trial that was put forward at the last minute as being key to improving LeO’s performance.
This is a new way of handling “low-complexity case work which relates to an area of law which is formulaic in character”. The trial later this year will focus on residential conveyancing, which accounts for a quarter of the cases LeO considers to be low complexity.
But the LSB executive said there was a paucity of detail on how it would work and the impact it would have, and so its late addition “undermined” confidence in the budget.
“The executive has serious concerns about the ability of the OLC to deliver this programme in a manner that secures the outcomes set out in the budget.”
Further, “there has been a historical pattern of failure to meet the existing performance targets, agreed by reference to previous budgets (including the current budget). This causes the executive to lack sufficient confidence in the OLC’s ability to deliver on the targets set out in the draft budget”.
The paper said that each of these factors provided a sufficient basis on their own for not approving the budget, and this was “reinforced by the evidence that there is a weak culture in terms of leadership, change management, systems and governance at the OLC”.
It concluded: “The LSB is open to budget increases, where those increases are well-evidenced… The executive wants to see a performance improvement and recognises that budget increases may well be necessary to support that.
“However, weighing everything in the balance, the executive’s view is that the current budget proposal should not be accepted.”
As a result, the OLC pulled its proposal and instead presented a revised budget that simply increased the current figure by inflation.
In her blog about the meeting, LSB chair Dr Helen Phillips said: “The board and the OLC representatives had a frank and open conversation about the Legal Ombudsman’s performance and we all agreed that it continued to be unacceptable.”
With Elisabeth Davies about to take over as the new chair of the OLC, Dr Phillips said: “We anticipate that Elisabeth will seize the opportunity to drive forward the radical changes that are needed and move progress in the right direction.
“The [Legal Services] Act allows the OLC to apply to the LSB for a variation of the approved 2020/21 budget in-year, and approval of the revised proposal was made in the expectation that the OLC will make use of this facility. Any such application will, of course, be carefully considered on its own merits.”
The board papers revealed that the first draft of the OLC’s budget was thrown back by the LSB last November for being inadequate.
Though the LSB asked for “close engagement” as it was revised, it was “not offered any opportunity to provide substantive feedback, or engage in any meaningful discussion, in advance of papers being finalised and circulated to the OLC board for its 4 March 2020 meeting”.
The final application to the LSB was said to be a significant improvement, but this still meant the budgeting process itself “highlighted issues with governance and leadership” that dented the LSB’s confidence in the OLC.
LeO’s performance improved last summer, but it has deteriorated since October and the OLC has acknowledged in correspondence with the LSB that “this is more than a blip”, with low-complexity cases taking six months to resolve, when the aim is for half that time.
There are also over 3,000 cases waiting in the pre-assessment pool – meaning they have not yet been allocated for investigation – while the expectation that a full-time investigator should be able to close up to 7.3 cases per month is being missed by many; 35% of staff are currently closing fewer than five cases a month.
The OLC application said that “whilst significant investment has been made in systems and processes over recent years, the reality is that the current underperformance is, in large part, attributable to issues with the experience and stability of our workforce.
“This is true overall but is most significant in our operations teams and particularly in our investigators who manage much of the complaint activity on behalf of our customers.”
Attrition levels are high (22%) and have been growing, with investigator attrition nearer 30%. “New joiner turnover is a particular issue with half of new starters leaving within their first two years.
“Recruitment has largely been successful in bridging gaps but new starters are less productive and as such the mix of staff has impacted overall productivity levels.
“Staff survey results, often an early indicator of future action, are particularly worrying. Engagement has dropped by eight points to 42% (28% for investigators) and over 50% of staff say they wish to leave in the next 12 months.”
Leo Introduced a new way of working called the “supervision model “which literally strangled any investigator discretion and judgement , causing huge bottlenecks. This was because investigators were not trusted to run their own investigation . Virtually every letter, report and even telephone call had to be drafted in writing and authorised by an ombudsman before it could be communicated to the parties . And of course the results was backlogs of work and frustrated investigators and customers alike.
Experienced investigators have left leaving complex investigations in the hands of new investigators who also invariably leave .
Leo’s response ?
To micromanage even more by holding weekly meetings with investigators to get them to explain in detail why they are unable to progress investigations in the timescales permitted . Is this kind of madness of leo management that has driven the organisation to its knees.