Complaint management in Law Firms - Is your reputation at risk?

Is your reputation at risk?

Our recent webinar took a look at some key areas of complaints management, including:

• The requirements of the SRA Standards & Regulations
• The Legal Ombudsman (LeO) Scheme Rules
• First-hand examples of where firms are getting it wrong.

Many firms face a number of challenges in relation to complaints, for example:

• Understanding what a complaint is
• Staff failing to follow their firm’s complaints procedure
• Complaints being swept under the carpet
• Not appreciating that their PII insurer may want to be notified about complaints and settlements
• Failing to appreciate that taking a commercial view on settlement may be the best solution rather than challenging a complaint.

Bearing in mind everything that you do relates to the services you provide to clients, you need to appreciate that just about every part of the Standards & Regulations could come into play in relation to complaints, for example, your Compliance Officer for Legal Practice (COLP) will need to keep an eye on how complaints are managed even if a separate partner has been nominated to act as the Complaints Partner.

One of the new requirements of the Code of Conduct for Firms is that you ensure that clients are not charged for handling their complaints; you may be thinking that this has always been the case but under the Code of Conduct 2011 as the SRA considered making a charge a potential problem under Indicative Behaviours, which were optional only. The LeO Scheme Rules have always said a charge must not be made so the new requirement just brings the SRA in line with what it requires.

The main challenge for many firms and their staff is recognising what a complaint is; the LeO states that a complaint is:

An oral or written expression of dissatisfaction which alleges that the complainant has suffered (or may suffer) financial loss, distress, inconvenience or other detriment and is covered by the LeO Scheme Rules, Chapter 2 (who can complain about what).

Once you have identified that a complaint has been made it is key that you then deal with it in line with internal complaint procedure, for example, most procedures will cover stages including:

• Dealing with the complaint informally if possible
• Acknowledging the complaint within 48 hours if being dealt with formally
• Requesting further information if required
• Investigating the complaint and respond within 21 days
• Dealing with any request for a review of the initial findings.

Keeping track of complaints and how you manage them is not only a specific regulatory requirement it will also help you to manage your client care programme and take steps to remedy areas of concern.

If a complaint makes its way to the LeO not only could you face having to apologise, pay compensation, refund fees, etc., but you will also have to pay a case fee of £400; this fee may be waived in limited circumstances but the rule of thumb is to expect to be charged a case fee.

If the LeO finds issues relating to conduct it could make a referral to the SRA for further investigation, so you need to be aware of this when carrying out internal investigations.

In 2018/19 the LeO found the top areas for complaints to be:

• Residential conveyancing – 1,571
• Personal injury – 864
• Family law – 797
• Wills & Probate – 788
• Litigation – 595

The top reasons for complaints were:

• Delay/failure to progress
• Failure to advise/poor advice given
• Failure to follow instructions
• Costs
• Failure to keep informed.

Many firms have difficulty in trying to assess what settlement should be offered where a complaint is found to be justified, others just try to settle at as low a level as possible; the following provides a guide to settlement levels expected by the LeO:

• Small award
  • Apology
  • Completing/correcting work
  • Progressing matters in a specified timeframe
  • Returning documents
• Modest award (impact short-lived and now resolved)
  • £50 - £250
• Significant award (serious but not permanent effect)
  • £250 - £750
• Serious award (long-term impact on client’s well-being or life)
  • £750 - £1,000

One question that we get asked on a regular basis is, “Can I chase outstanding costs once a complaint has been made?”; the short answer is yes, but you should assess whether this could make matters worse.

If you value your reputation you should deal with complaints in an appropriate manner; a well-handled complaint can actually lead to a positive rather than a negative outcome!

Five steps to effective complaints management

1. Put in place effective complaint handling policies and procedures
2. Train all staff on complaints handling
3. Create an open culture so complaints do get hidden
4. Take an appropriate approach to resolving complaints
5. Try and achieve positive outcomes to complaints

 

Complaint management was discussed in our recent four-part webinar series ‘Working with the SRA’s Standards & Regulations (STaRs)’ which ran throughout February. 

Brian Rogers, Regulatory Director for Digital Learning and Compliance, examined some key areas of risk that law firms are exposed to and how the Standards and Regulations apply to them. These included:

- Risk Management 
- Risk-Based File Audits 
- Complaint Management 
- Breach Management.

You can watch them here on demand. 

Alternatively, you can request a free demo of our Risk and Compliance software here.