The Office for Legal Complaints (OLC), which oversees the Legal Ombudsman service, has launched a consultation proposing a significant overhaul of its case fee structure. The changes are designed to incentivise firms to resolve complaints at the first tier, before they reach the Ombudsman.
Why Is LeO Proposing These Changes?
The OLC has initiated a process to radically transform LeO under a strategic vision it calls LeO 2030. The vision has three pillars: continuous improvement in LeO’s own operations; reducing avoidable demand through potential changes to the Scheme Rules, proposed changes to case fees, and exploring options to facilitate the publication of decisions; and a comprehensive, externally led Scheme Transformation Review to deliver longer-term transformation and a service with the agility to deal with its new demand environment.
This consultation covers the second pillar. The OLC has stated that the proposed changes are limited to those that can be implemented within the Legal Services Act as it currently stands and that the proposals are subject to the relevant approvals before implementation.
The case fee proposals are designed to more closely align the distribution of LeO’s costs with legal providers generating the greatest demand, while maintaining free access for consumers.
What Is Changing And Why?
Currently, the individual case fee is £400. Under the proposed new regime, fees would vary depending on how far a complaint progresses:
- £200 where a case is resolved at the early resolution stage.
- £750 where the complaint proceeds to investigation.
- £1,500 where the complaint goes to a final ombudsman decision.
A separate additional fee of £400 would apply to any firm that failed to issue a final response to a client’s complaint within eight weeks. The OLC has confirmed this charge would apply irrespective of the eventual outcome of any investigation. Even where a complaint is resolved in the firm’s favour, case fees will be waived only if the Ombudsman is satisfied that the firm took all reasonable steps to resolve the complaint at first tier.
What Is The Financial Impact?
Under the current regime, the Ombudsman generated £940,000 in case fee income in 2024/25, representing 5% of the overall costs of providing the service. The OLC has stated that if the proposed regime had been in place that year, it could have generated nearly £3.5 million, equivalent to around 20% of LeO’s costs for that year. All additional fee income will be used to offset the levy paid by the legal profession to fund the Ombudsman.
What Else Is Being Proposed?
The consultation also proposes changes to the Scheme Rules that would narrow the complaints LeO accepts for investigation in certain circumstances.
The key proposals are:
- Complainants will be required to show evidence of impact or detriment from the way they were treated. Where no such evidence is provided, LeO will not accept the complaint for investigation.
- A 12-year long-stop for very old complaints where it is clear they cannot be investigated without significant extra resources.
- The OLC is consulting on changes to support greater publication of Ombudsman final decisions, subject to safeguards; Law Gazette reports that full publication is unlikely before 2027/28.
LeO has stated that complaint volumes rose by 37% in 2025/26, driven by changing consumer expectations, issues with first-tier complaint handling, and wider societal trends, including the growing role of artificial intelligence tools.
OLC Chair Ric Blakeway Stated:
“LeO’s experience shows that standards of complaint handling are not consistently meeting the level that customers of legal services should be able to expect. A single statistic points to the need for change: that one in four people who escalated their complaint to LeO in 2025/26 said they never received a final response from their provider. This is poor and preventable.”
Final Words
The OLC has described the proposed changes as having the potential to drive ‘significant cultural change’ across the sector. The consultation runs from 10 June 2026 to midday on 2 September 2026.
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