Davies: absence of third-party rights creates weak incentives for firms to behave fairly
Non-clients should have a general right to complain about lawyers – such as parties affected by delays in the conveyancing process and beneficiaries of a defective will – the Legal Services Consumer Panel said today.
In its latest ‘Consumer challenge’ think-piece, the panel said the current exclusion of almost all third-party complaints from the jurisdiction of the Legal Ombudsman (LeO) is “too crude” and does not incentivise lawyers to treat third parties fairly.
The current LeO consultation on its scheme rules suggests specifying the circumstances in which third parties should be allowed to complain, but the panel recommends making all third-party complaints eligible, except in situations where this would impair the proper pursuit and administration of justice.
The paper identified complaints against an opponent’s lawyer as perhaps the most controversial issue. While the panel acknowledged the risk of speculative cases – for example, brought by a husband or wife about the other’s lawyer in a divorce – it said LeO has the power to dismiss complaints it considers vexatious or frivolous.
“This should not distract from ensuring there is an avenue for redress for third parties who have legitimate grievances. This is important not just for reasons of access to justice, but also to create the right incentives for ethical conduct and fair market behaviour,” it said, highlighting examples such as “hounding tactics” used by lawyers acting on behalf of corporate clients in file-sharing and civil recovery cases.
The panel also suggested that without this right, lawyers may seek to enter into complex business arrangements – such as an unregulated legal business sub-contracting legal work to a regulated provider – that ensure they steer clear of LeO’s jurisdiction.
Other scenarios where there would appear to be good grounds for giving third parties a right of redress through LeO:
- Where legal work is intended to benefit consumers, but they are treated as third parties due to the nature of the contract, such as a remortgage when the legal work is arranged by the lender;
- Bad treatment of victims and witnesses in the criminal justice system;
- Non-contentious matters where both the client and third party lose out, such as a delay in a conveyancing transaction because the seller’s lawyer loses some paperwork causing detriment to the buyer;
- Personal information compromised due to a data security breach;
- Beneficiaries when they experience problems due to a defective will; and
- Lawyers working on matters concerning groups of people where the work is arranged by another party on their behalf or in their name, such as leaseholders or unsecured creditors.
Panel chairwoman Elisabeth Davies said: “If you’ve experienced poor legal services and suffered detriment, then you should be able to obtain a remedy. It’s wrong that some consumers cannot currently complain to the Legal Ombudsman due to technicalities which they don’t even know about.
“While in some situations the case for giving third parties the right to complain is clear cut, in other circumstances, such as the treatment of victims and witnesses, the arguments are more finely balanced. Our paper aims to stimulate an open debate about where the Legal Ombudsman’s boundaries should properly lie.
“Denying third parties access to redress also creates weak incentives for firms to behave fairly and is a missed opportunity for lawyers to learn from their mistakes.”
This is all going way too far. Most if not all of the scenarios listed already have remedies in appropriate cases. What other business or service has to consider complaints from people they have no contractual relationship with or owe no duty of care to. There are now the over-riding principles in the Code of Conduct including the one nicked from the FSA – “treating third parties fairly”. Third parties are not our consumers.