4 MAY 2004

ZAHIDA MANZOOR CBE

  Chairman: Welcome Ms Manzoor. We are glad to have you with us, not least because we are finding it extremely difficult to pick our way through the now very complex powers and arrangements which form your two appointments or are involved in the several professional bodies whose regulation and complaints procedure you oversee. We look forward to being much better informed at the end of the day. In the meantime, members must first declare any interests.

  Ross Cranston: I am a barrister and recorder.

  Q1 Mrs Cryer: Zahida, we used to meet at Saltaire from time to time when you were with the District Health Authority at Bradford. The Legal Service Ombudsman post is the only ombudsman's post where the incumbent is excluded from holding qualifications relevant to their area of jurisdiction. Do you see the exclusion as a benefit or a hindrance in respect of how you carry out the role? Apparently the British and Irish Ombudsman Association held a view that it was a good thing not to be part of that particular profession?

  Ms Manzoor: I would agree entirely with them. I think it is very important that the Ombudsman is independent of the legal profession. There is no conflict of interest. I am totally impartial in the decisions that I make, and of course I am looking at the consumer interest, the public interest, in dealing with complaints.

  Q2 Mrs Cryer: Do you think it is better not to have any knowledge at all than have the knowledge but probably know people who may try to influence you? Is that the situation?

  Ms Manzoor: I come from a consumer perspective and therefore it is important to understand consumer needs and aspirations in the way that complaints are being handled, and I am assessing the service delivery issues of the professional bodies and the solicitors and barristers who provide legal service. You do not have to be a barrister, or indeed a solicitor, to do the job. I am assessing cases to ensure that the service provided is fair and effective and meets consumer needs. You do not have to be a lawyer to be able to assess that. Of course, I have substantial experience. As you have mentioned, I have headed up a large section of the NHS and being actively involved in improving service delivery, so I understand the needs of consumers. Indeed, the role of the Ombudsman is statutory in any event. If I go back to when the Bill was going through its passage, the Attorney General then said, and I read: "It is in the interests of the ordinary member of the public that the LSO is independent." I agree entirely with that. The Ombusman needs to be independent of the legal profession.

  Q3 Mrs Cryer: What changes did you introduce following the research carried out into the view of inquirers, complainants and practitioners who had been in contact with your office?

  Ms Manzoor: There are a number of changes that I have undertaken since my appointment as Legal Services Ombudsman. My appointment commenced from March of last year. I undertook my annual report in July of last year. Subsequently, in September, I undertook a detailed assessment of the initiatives that were being undertaken by the Law Society in their complaints handling and made recommendations in those reports. I was particularly concerned with the areas that needed improvement and I was looking at the number of unresolved cases that the Law Society had. I noticed that the number had increased from around 4,500 from January 2002 to somewhere in the region of 8,500 in September 2003, which was of great concern to me. Also, if you analysed the age profile of the complaint, there were quite a substantial number of complaints that were over a year old, and indeed two years old and three years old, which I really felt needed to be resolved as quickly as possible. The third area that I have been concerned about is the turnaround times, how quickly particularly professional bodies deal with the complaints that are coming from the public. Obviously members of the public have already gone through a long process, having their complaint dealt with at a local level, and then they have gone to the professional bodies to have their compliant dealt with before they can come to my office.

  Q4 Chairman: I was quite struck by how small the average level of compensation was that was awarded against the OSS, or indeed individual solicitors or against the General Council of the Bar. The average for solicitors was £270 and the highest award against anybody for the OSS is £5,000. It struck me as being rather a small sum in relation to the sense of grievance someone has. Is that because the dilatoriness of the complaints procedure was only a tiny element in the person's dissatisfaction?

  Ms Manzoor: There are a number of reasons which determine the size of the compensation award that is made, and that may well be the area that you have just indicated. The average complaint, if you look at the figures from my office, is around £400 currently, which has increased.

  Q5 Chairman: That is only half a morning's work for a barrister, is it not?

  Ms Manzoor: I look at awards in terms of inconvenience and distress that may be caused. When you look at the level, you are right; I did increase the level when I took up office. We are continually reviewing the levels of compensation. We have to do that. I think you are quite right: we can award compensation up to £5,000. If you look at the Bar Council, they have awarded one compensation level of up to £5,000. From my own office, one award made has been up to £4,000. I agree with you that there is room for me to look at the levels of compensation. They have to be fair and they have to be reasonable from the consumers' perspective.

  Q6 Chairman: Do they bear any relation, in your experience, to the level of damage the person has suffered, or are you assuming that in many of these cases the redress of the damage the person has suffered is achieved by reactivating the case or, if it is out of time, by suing the solicitor for his negligence and that the complaints handling side of it can only be a limited part of the compensation someone achieves?

  Ms Manzoor: Unfortunately, my power is only based in terms of the service issue and not negligence. It is really related to inadequate professional service that the complainant has received from the lawyer concerned, so that would fall outside my remit and indeed the professional body's remit too. In that case then the complaint would have to go back to the courts.

  Q7 Ross Cranston: Could I take you to the trend and the figures, and of course the figures always conceal complexities? I was struck by the fact that there were increases in the number of complaints in relation to the smaller professionals you are looking at: the legal executives, the patent attorneys and the conveyancers. Some of the figures are so small that it is rather difficult to generalise. You probably have enough with licensed conveyancers, and there does seem to be an upward trend in the number of complaints. I wondered whether you had any particular comments on why that might be the case. I notice from your annual report you did have an on-site investigation and you went and looked at some of their files. Is there any explanation as to why there should be that trend upwards with those three smaller professionals for which you have responsibility?

  Ms Manzoor: The numbers are, as you rightly say, very small. Certainly for ILEX and the CIPA we received no complaints this year. For CLC we received approximately nine complaints only. Therefore the numbers are very small to draw conclusions. You are absolutely right to say that we have undertaken on-site a case review of the files to see if we can gather trends emerging. We have made those recommendations to CLC. They are in the process of writing back. I am aware that they will adopt some of those recommendations. I think it would be premature for me here today to say what those are.

  Q8 Ross Cranston: I think with the patent attorneys', that is mainly because they did not provide information about costs to the clients and that was the major cause of complaint. The obvious solution is to get them to provide more information, as solicitors now do. I declared my interest earlier but I was also struck by the trend against members of the Bar, where there is actually a reduction in the number of complaints that seem to be made to the Bar Council. Is it just that they are doing what you and your predecessors recommended in terms of introducing mechanisms to deal properly with complaints, or why is there that trend?

  Ms Manzoor: I have an excellent working relationship with the Bar Council. If you look over the last five years or so, the trend of the number of cases that are coming to the Bar Council has been pretty stable. From that, I would draw the conclusion that possibly they have sufficient resources in place to deal with the number of complaints that are coming to them. Also, they have been looking at the turnaround times in terms of how quickly they deal with the complaint and that, too, is improving. I do not think any conclusions can be drawn because the numbers, once again, are relatively small.

  Q9 Ross Cranston: This is in terms of the number of complaints: in 2000, it was 569; in 2001, 464; in 2002, 461.

  Ms Manzoor: That is the number of complaints that are coming to the Bar Council, not to me. The number of complaints that is actually coming to me is reasonably stable. For instance, and I have not fine-tuned the numbers, we are looking at approximately just over 200 complaints that have come to me from the Bar Council. That is there or thereabouts pretty steady in terms of the number of complaints that have been coming, of which there is a consistency.

  Q10 Chairman: Am I to read into what you said about your good relationship with the Bar Council that you do not have such a good relationship with the Law Society?

  Ms Manzoor: No, I did not intend to intimate that. I have an excellent working relationship with all the professional bodies; it is very constructive. With the Law Society, of course I have also been appointed as the Legal Services Complaints Commissioner. I have agreement from the Law Society that we will work very closely and co-operatively together to ensure that we meet the needs of consumers, but I can understand some of the concerns that the Law Society has with my new role.

  Q11 Chairman: We will come back to that separate role as Legal Services Complaints Commissioner in the latter part of our discussion this afternoon. If I look back at your last annual report, you said there a number of things: that you were extremely uneasy about the wisdom of the OSS outsourcing complaints to firms of solicitors and that you liked the clients' charter but you thought it was merely a statement of good intentions launched without additional training or guidance for solicitors. That sounds like a very stormy relationship with the Law Society.

  Ms Manzoor: It is an accurate assessment of what I think. I have, as you know, since then written an interim report, which was published in November, covering the period from April to September, simply because I really did want to have an in-depth look and undertake an assessment of the initiatives that the Law Society was undertaking. I did express my concerns regarding outsourcing complaints to solicitor firms. I also indicated in my interim report, because of the number of complaints that the Law Society had to deal with—they had increased quite dramatically and continued to increase until September 2003—that the pragmatic way forward may well be to look at outsourcing some complaints in the short term to reduce the number of cases they had to deal with. In terms of the clients' charter, I think the Law Society needs to be congratulated. It is very important that consumers have as much information as they can possibly have when they are dealing with solicitors, or indeed lawyers generally. However, the clients' charter is not mandatory. Solicitors can give this charter to the clients or they may choose not to do so. It does not state clearly any targets for complaint handling by that solicitor or what the complainant or consumer can expect from their solicitor. There are areas that possibly could have been included from the consumers' perspective, yes. I think additional client care training for solicitors may well have been very helpful.

  Q12 Chairman: I am going to ask Dr Whitehead to explore some of this a bit further but there was an odd phrase in the annual report which implied that if the Law Society did a really good job, you would be in some difficult yourself. You said, on page 15 of the report: "If the number of complaints being closed by the professional bodies increases (as it must if the OSS are to clear their backlog), this will invariably lead to an increase in the number of cases referred to my Office. This will not only have serious resource implications, but it could also jeopardise our current efforts to improve the speed with which complaints are investigated while maintaining the high quality of our investigations." In other words, if they really get their act together, you will not be able cope?

  Ms Manzoor: I think you have to remember that of the number of cases that go to the Law Society, something between 7% and 10% come to my office. Also, those cases are self-referred from the complaints. The complainant can choose: yes, I want my case to be looked at by the Ombudsman. Invariably, the Law Society is going to close more cases, which is of course what I want them to do. I think it is absolutely right from the consumers' perspective that they need to close more cases; their turnaround times need to improve; and they need to ensure that the backlog of cases, the age profile of cases, is reduced so that cases are not on the shelf maybe over 12 months, for instance. In effect, though, looking at the first six months performance, that has not happened.[1] Of course when I was writing in July it was very likely that when you looked at the Law Society's own forecast, that was likely to happen, that they were going to close a lot more cases, and therefore invariably the knock-on effect would be that I may well receive more cases. That has not happened, I am pleased to report. I have not received as many cases as predicted. The trend for the Law Society, certainly over the last six months, has been increasingly to close more cases than they have been receiving, which is excellent news for the consumer.

  Q13 Chairman: I do not quite understand this. Why are you pleased that you have not had so many cases coming to you because they have closed more cases when your earlier prediction was that, if they did close more cases, you would not be able to cope with the number that would then land on your desk?

  Ms Manzoor: They have only just been closing—

  Q14 Chairman: So this will happen?

  Ms Manzoor: It may well because obviously complainants have three months to refer their complaint to my office. Certainly, in the last six months the Law Society has been increasingly closing more cases. What is also noticeable is that the Law Society has also been making substantial sums of compensation to complainants. If I look at the figures for last year, the average compensation per month was around £10,000 to £15,000. Recently, over the last six months, the average level of compensation that the Law Society has been making to complainants has been anywhere between £50,000 and £80,000 per month.

  Q15 Dr Whitehead: In addition then to your post of Ombudsman, the Lord Chancellor has now exercised his reserved legal powers to appoint effectively you as Legal Services Complaints Commissioner. The Lord Chancellor has made it clear that those two rôles remain quite separate: one is concerned with individual complaints, whilst the Complaints Commissioner actually scrutinises the Law Society's own complaints-handling process, but the Law Society meanwhile is going to change into the Consumer Complaints Service. Do I have the procedure right so far?

  Ms Manzoor: Yes.

  Q16 Dr Whitehead: Could you possibly in particular set out for me how you see indeed that separation of function working, and, secondly, how you see your rôle in relation to the office for the supervision of solicitors?

  Ms Manzoor: You are absolutely correct that as Legal Services Ombudsman my primary ro®le is to review and investigate individual complaints that are referred to me by consumers. That is my primary function. Indeed, over 90% of my staff are involved with that function, so it is very much reviewing individual cases that land on my desk. As Legal Services Complaints Commissioner, (LSCC) I am looking at the systems and processes and the overall performance of the Law Society, and I will be working very closely with them in terms of setting targets, reviewing where changes need to be made and where the weaknesses are. I shall audit and investigate their own systems and processes, which of course, as Ombudsman, I cannot do; I have no auditing function or investigative general function. Via section 24 powers of the Courts and Legal Services Act of 1990, I did have power to review the complaints handling of all the professional bodies as Legal Services Ombudsman. However I could only make recommendations, there were no sanctions for non-compliance. As Complaints Commissioner, of course, I do have the remit to investigate; I do have the remit to ask of information; and of course I can set targets; I can ask the Law Society to submit a plan in terms of where it needs to make changes to its systems and processes for the benefit of consumers. If they do not hit those targets, or indeed meet the plans as set out and as agreed with myself, then I have the opportunity to levy quite substantial fines, which I hope is a deterrent. It is something that I certainly do not intend to use; it will be very much the last resort, but I do have those powers, should I need to use them.

  Q17 Dr Whitehead: In the context then of those powers, I would imagine you could be perceived, as it were, in an interesting place between regulation and non-regulation whereby you are, as it were, regulating the body that is continuing to operate in a non-regulated way. That body itself continues to have question marks placed against it, and indeed question marks which were placed in your annual report about the continuing case, as it were, for self-regulation. Is it not the case, therefore, that the powers you have mentioned you now have in a sense are indicator powers for regulation; that is, if you apply them, those in themselves will make the case for regulation by your hand?

  Ms Manzoor: The Secretary of State has stated very clearly that appointment of the LSCC is without predjuice to the Clementi Review I really do not want to be pre-judging this, the Regulatory Review, as you know, is being undertaken currently by Sir David Clementi, which is looking at reviewing the regulatory framework for England and Wales. My ro®le as LSCC is, as I stated, that I need to work very closely with the Law Society and with its co-operation to improve the current system of handling complaints. Thereafter, what happens to the regulatory framework is not within my remit. That is something that the Secretary of State has to determine. However, there is an issue between the professional bodies, and particularly pressure on those bodies, by being both a duel role of being a regulator on the one hand and a representative body on the other. There is potentially a conflict between those two roles. Often, when complainants write to me, what they are looking for is independence, irrespective of what the outcome of their complaint has been. Whether the professional bodies handled their complaint well or not, they feel that with the dual role their perception could be that there is a conflict of interes. I think this is an area that needs to be looked at very carefully, and indeed Sir David's review team is looking at it. They will make those representations or recommendations to the Secretary of State in December. Their paper is currently out for consultation and I will make my views known. Companies such as Clifford Chance, which as you know is a large legal practice, have stated that they do have concerns about this dual role that the Law Society in particular holds.

  Q18 Dr Whitehead: You have, for example in the annual report, stated and indeed it underlines what you are saying this afternoon: "It is interesting to note in this regard that in many other areas of public life the tendency is to move away from self-regulation . . ." Then you go on to talk about the Police Complaints Authority. I wanted to see whether you could clarify this point. Bearing in mind that the Clementi Report is coming out at the end of the year and, in a sense, that report is the review of the case for regulation, one might say that you, through your new ro®le, while that report is sitting, taking its evidence and making its findings, could be active in undertaking fines or sanctions or whatever on the Office for the Supervision of Solicitors, as it were to make to the review on the need for that. Do you see that as problem in terms of how the Clementi Report is going to conduct itself?

  Ms Manzoor: No, I do not think so. The two issues are separate. I can see where your line of thinking is going. I would like to feel that, certainly within the next two to three years, I can work very closely with the Law Society to demonstrate improvement. I cannot prejudice the outcome of what the Secretary of State is going to consider as the way forward for the professional bodies and what he intends to do. I do know that at the moment the LSCC's power and remit only relates to the Law Society. Of course, it would be entirely up to the Secretary of State if he wanted to extend that power to the professional bodies, but that is not his thinking currently.

  Q19 Dr Whitehead: Are you submitting material and evidence to the Clementi Review as they proceed with their work?

  Ms Manzoor: Yes, absolutely and, like many other organisations, I will be submitting my evidence as to what I think the regulatory framework could look like, what the landscape could look like, in future for the professional bodies.

  Chairman: You have referred to the problem that you have identified from the Law Society.