News

First-tier complaints: New information requirement for firms

Updated 26 September 2011

 

New information required

Although our move to risk-based regulation will result in a new approach to gathering regulatory information from firms, we have—in recognition of the pace of change this year—limited the level of significant new information we will be asking for in this year's recognition renewal forms. The additional information firms need to provide is limited to a new question asking for information about the number and type of complaints your firm receives from your clients (first-tier complaints).

Why we are asking for new information

A perception of poor complaints handling by the legal profession was one of the drivers for the Legal Services Act 2007 (LSA). In response, a fundamental requirement of the LSA is that approved regulators must ensure legal service providers have effective procedures in place for the resolution of complaints. Section 112(1) of the Act also requires an approved regulator to make provision for the enforcement of those requirements.

The Legal Services Board (LSB) maintains a direct oversight role in monitoring our effectiveness at regulating first-tier complaints handling. In May 2010, the LSB published signposting requirements and guidance on first-tier complaints handling (PDF 10 pages, 145K), which came into force on 6 October 2010. This expects the SRA to achieve the following outcomes when regulating first-tier complaints handling:

Consumers have confidence that:

  • complaint handling procedures provide effective safeguards for them; and
  • complaints will be dealt with comprehensively and swiftly, with appropriate redress where necessary.

In order to meet these requirements, we need a clear picture of how firms are performing in relation to first-tier complaints handling. This will help us build an evidential base which we will use to monitor and enforce compliance. To develop a complete picture about complaints handling, we will also use second-tier complaint data from the Legal Ombudsman (LeO) and information arising from our supervisory activities and consumer-client research.

Recent research carried out by the LSB on first-tier complaint handling highlights that there is a gap between what is expected to happen under the regulatory framework and what is actually happening, supporting the case for introducing this new question this year (First-tier Complaints Handling Report, June 2011 (PDF 65 pages, 1.9MB).

Answering the question

The question will be presented in a table format for you to complete in form RF1 (the bulk renewal form for recognised bodies and recognised sole practitioners).

Complaint category Complaints Received Complaints Resolved Complaints also referred to Legal Ombudsman
Conduct      
Costs information deficient      
Costs excessive      
Criminal activity      
Data protection      
Delay      
Discrimination      
Failure to advise      
Failure to comply with agreed remedy      
Failure to follow instructions      
Failure to investigate complaint internally      
Failure to keep informed      
Failure to keep papers safe      
Failure to progress      
Other      
Total [Sum of column above] [Sum of column above] [Sum of column above]

The first column asks for the total number of client complaints received in the last 12-month period, broken down by type of complaints category.

  • Client in this context has the same definition as in the SRA Code of Conduct (i.e. the person for whom you act, including prospective and former clients).
  • Complaint means a formal complaint to you and includes complaints made initially to a third party and referred back to you to address in the first instance.
  • Last 12 months means the last 12-month period from the date you complete your recognition or authorisation form.
  • Complaints categories are those used by LeO to categorise the type of complaints they handle. We have chosen to use the LeO categories, as it is important for us to be able to compare information collected on first-tier complaints with data provide by LeO on second-tier complaints. The guidance accompanying the forms will provide further information on the categories we have used.

The second column asks for the number of client complaints resolved by you.

  • Resolved means those clients who are satisfied with the outcome of their complaint to you.

The third column asks for the number of client complaints that were referred by your client to LeO.

  • Referrals to LeO means those clients who are dissatisfied with the outcome of their complaint to you and refer the matter to LeO, regardless of the outcome of the referral.

What the information will be used for

Failure to handle complaints properly when they do arise is a key indicator of risk to our regulatory objectives. Not only does it potentially impact on consumer interest and professional principles but can undermine access to, and confidence in, justice.

We will use the information in two main ways: Firstly, to identify any thematic risks emerging about complaints handling in the legal services market; secondly, to highlight where there may be a risk that a specific firm has inadequate or insufficient systems for dealing with complaints. It is important that we can spot trends in complaints and respond in a proportionate, risk-based manner. This could include, for example, issuing guidance for the regulated community, undertaking further research or targeting use of our supervisory resource across a sample of firms.

More about how the SRA will use the data

How we will interpret the data we collect

We will look at the general trends the information reveals, such as the overall numbers of complaints, broad trends in the types of complaints, etc. But, because we are collecting the data through the annual renewals process, it will be collected in a way that allows us to analyse it in the context of the individual firm that provides it.

For example, we will be able to interpret the data in the context of the size of your firm and the types of work your firm does. We will also be able to take this individual firm data and put it in the context of other firms of a similar nature.

Other sources of information

The SRA will look at other sources of information. We have already carried out some thematic visits to look at how firms handle complaints. The information from those visits, and information from other research in this area from a range of sources, will be included in our analysis.

Purpose of collecting data

The aim of gathering this information is to assemble a comprehensive picture of firms' arrangements for complaints handling across the whole of the legal services market. The specific actions we will take will depend on what our analysis tells us. We may issue guidance, undertake further, more-focused research or engage in supervisory activity. We will not make any decisions until our analysis has been completed and we have evidence to support our chosen course of action.

Providing the required complaints data

Definition of complaint

The definition of complaint we are using does not include concerns raised by a client about your service provision that are not taken forward as a formal complaint. We understand that these are not matters that a firm generally would record on their complaints register.

Complaints that fall into more than one complaint category

If a complaint is about more than one complaint category, you should only record the primary head of complaint. For example, a complaint about discrimination and delay in which the client's main concern is one of discrimination should be recorded under the discrimination complaint category.

Complaint categories

Conduct
This category covers complaints in which an element of the complaint is deemed to constitute a potential breach of the core principles in the Code of Conduct. These are issues that the Legal Ombudsman does not have the jurisdiction to investigate and will refer to the SRA to investigate—for example, fraud, conflict, misleading.
Costs information deficient
This category covers complaints about inadequate costs information and about final costs in excess of those specified in the costs information.
Costs excessive
This category covers complaints that the fees charged by your firm are too high.
Criminal activity
This category is to record complaints that your firm, or a member of your firm, has been involved in criminal activity.
Data protection
This category is for complaints that your firm has failed to protect the confidentiality of a client.
Delay
This category is for circumstances in which a client complains that the service provided by your firm has caused a matter to go on for longer than it otherwise would have done.
Discrimination
This category is for circumstances in which a client complains that the basis for the poor service received is one of discrimination.
Failure to advise
This category is for complaints in which it is reported that your firm did not provide legal advice which would reasonably have been expected.
Failure to comply with agreed remedy
This category is for complaints in which you agreed with the client how to resolve their concerns but failed to implement the remedy.
Failure to follow instructions
This category is for complaints in which it is reported that a client's instructions have not been followed.
Failure to investigate complaint internally
This category is for complaints in which a client reports that the firm has failed to investigate their complaint.
Failure to keep informed
This category is for complaints in which it is reported that the firm has not kept a client informed of progress.
Failure to keep papers safe
This category is for complaints in which it is reported that the firm has lost a client's papers.
Failure to progress
This category is for complaints in which it is reported that you have failed to act as would reasonably be expected in moving a client's case forward.
Other
This category is for complaints that do not easily sit within one of the other categories.

Complaints recording and re-classification

The complaints categories above are common types of service complaint that we would expect firms to be recording in a similar manner. We have recently piloted the question on a sample of firms. Most were able to provide the data in the format we requested and without a level of additional effort that would cause them concern.

However, if you are unable to re-classify without substantial resource being expended, please record any complaints that do not easily fall into the broad complaint categories under the "Other" category.

Complaints about overseas offices

You should provide complaints data for all offices of your firm, including overseas offices (but excluding service companies). We are collecting first-tier complaints data about firms, which encompasses complaints against any individual employed by a firm, including solicitors of a foreign jurisdiction working within an overseas office.

Partly resolved complaints and complaints with outcome unknown

A partly resolved complaint or a complaint in which the outcome is unknown are not classed as resolved.

However, in situations in which you do not hear back from the client but write to them again explaining that, if you do not hear anything further you will assume their complaint is resolved, it is reasonable to class the outcome as known and record the complaint as resolved.

Corporate clients ineligible to refer service concerns to Legal Ombudsman

If your clients are unable to refer their complaint to the Legal Ombudsman, do not complete the column in the form headed "Complaints also referred to Legal Ombudsman". Instead, please provide the complaints data you have about complaints received and complaints resolved. We will be able to contextualise the data you provide with other information we hold about your firm.

Firms in operation for less than 12 months

If yours is a brand new firm (i.e. not a successor firm nor one resulting from change in status), please provide complaints data for the period your firm has been open. In carrying out our analysis, we will be able, if required, to link your results with the date your firm commenced.

Change of status during reference period

If your firm has changed status during the reference period of 12 months (e.g. from a sole practitioner to a legal disciplinary practice), you should provide the data as if there had been no change in status.

Mergers/splits during 12-month reference period

If your firm is a successor firm (e.g. a merged firm, a firm that has succeeded to the whole or part of another firm), you should provide the complaints data as outline below.

Simple merger

In a simple merger between firms A and B, report the complaints data for Firm A and Firm B for the 12-month reference period.

Partial acquisition/merger

In a merger of one firm (Firm A) with part of another firm (say, one-third of Firm B) during the 12-month reference period, Firm A should report

  • its own complaints data for the 12-month reference period, plus
  • the complaints data for the part of Firm B it acquired, from the date of the merger only.

Firm B should report

  • its complaints data for the 12-month reference period, including
  • the complaints data for the part of the firm it disposed of to Firm A, up to the date of merger.
New whole-successor firm

If, during the 12-month reference period, a new firm is set up (Firm A) which succeeds the whole of one or more previous practices (Firm B), Firm A should report

  • its own complaints data, plus
  • the complaints data for the succeeded firm(s) (Firm B).
New part-successor firm

If, during the 12-month reference period, a new firm is set up (Firm A) which succeeds part of one or more previous practices (Firm B), Firm A should report all complaints received from its creation. Firm B should report

  • its complaints data for the 12-month reference period, including
  • the complaints data for the part of the firm that succeeded to Firm A, up to the date of succession.
 
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