LeO maximum monetary award increases – but at least it's final

01 February 2013

The Legal Ombudsman – or LeO to its new friends – has today been granted the power to award £50k (up from £30k).

Although lawyers now face increased exposures to LeO complaints, they can at least be sure that, once a maximum award is accepted, that will be the end of the matter.

We thought the comparable position in respect of FOS awards under s.228(5) FSMA was clear and that an FOS Ombudsman's award, once accepted, was 'final and binding'.  As reported here, the FOS was quick to adopt the findings of the High Court in the recent Clark case that decided complainants can sue for the balance of their losses in Court.

Lawyers should face no such uncertainty about their exposures to LeO complaints. The LeO's jurisdiction was more precisely drafted: s.140(11) of the Legal Services Act 2007 expressly provides that "neither the complainant nor the respondent... may institute or continue legal proceedings in respect of a matter which was the subject of a complaint, after the time when a determination by an ombudsman of the complaint becomes binding and final..."

No doubt the parties to the Clark appeal will argue over whether this puts in words what was always the intention of Parliament in creating the FOS (on which the LeO is based) or that, by omission, this tends to confirm that Parliament did not intend the FOS to be the final word on a matter.  We will have to wait and see what the Court of Appeal decides.

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