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Almost unprecedent LeO max £50k award

If you have been let down by your conveyancer in a way that has caused you to suffer a financial loss, distress and inconvenience, incur wasted or excessive costs or otherwise miss out in some important way, you may be able to complain to the conveyancers and if they do not resolve your complaint to your satisfaction, refer the complaint to the Legal Ombudsman.

Like all Ombudsman schemes, complainants are encouraged to pursue their complaints without legal representation. For modest value claims, that is fine. For high value issues, it will often be cost-effective to get legal advice to help you with presenting and pursuing the complaint.

One of New Build Guru’s panel firms recently helped clients pursue a complaint against their conveyancers and obtained an almost unprecedented MAXIMUM AWARD of £50,000 - see case summary and our comments below.

Compare this to the awards made by the Ombudsman across all complaints for 2018/2019 (source):

England & Wales combined:

  • 16.6% of ombudsman decisions resulted in a financial remedy of up to £299.50.
  • 15.7% of ombudsman decisions resulted in a financial remedy of between £300 and £999.
  • 9.0% of ombudsman decisions resulted in a financial remedy of between £1000 and £4,999.
  • 2.6% of ombudsman decisions resulted in a financial resulted in a remedy between £5,000 and £9,999.
  • 1.5% of ombudsman decisions resulted in a financial resulted in a remedy between £10,000 and £19,999.
  • 0.9% of ombudsman decisions resulted in a financial resulted in a remedy £20,000 and above.

Wales only:

  • 15.1% of ombudsman decisions resulted in a financial remedy of up to £299.50.
  • 18.6% of ombudsman decisions resulted in a financial remedy of between £300 and £999.
  • 11.6% of ombudsman decisions resulted in a financial remedy of between £1000 and £4,999.
  • 5.8% of ombudsman decisions resulted in a financial resulted in a remedy between £5,000 and £9,999.
  • 2.3% of ombudsman decisions resulted in a financial resulted in a remedy between £10,000 and £19,999.
  • 0.0% of ombudsman decisions resulted in a financial resulted in a remedy £20,000 and above.

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Case Summary - £50,000

The clients exchanged contracts with the housebuilder to purchase a new build home still under construction. The agreed purchase price was circa £900,000.

It was a term of the contract that the housebuilder would provide the buyers' conveyancers with a new home warranty cover note confirming that cover would be in place from legal completion, at least 15 days before completion.

The conveyancers failed or forgot to ensure the cover note had been received before handing over the full purchase price.

The property had not at the time been signed off as complete by the warranty provider. It issued its cover note around 6 weeks after completion.

The property suffered from various defects and damage. Due to the delay in issuing the cover note, on the wording of the policy, the homeowners were not insured for any patent defects (i.e. defects that were visible or discoverable on a reasonable inspection), only defects that came to light after the policy cover inception date.

The housebuilder went bust having failed to deal with most of the defects reported by the owners during the first year. The homeowners claimed on their warranty at which point they became aware that they were uninsured for the majority of issues. The warranty provider estimated the value of uninsured works to be £65,000.

The homeowners took legal advice from one of our panel firms and obtained expert costings on the uninsured remedial works which priced the works at just over £51,000. The panel firm notified a claim to the conveyancers accordingly. The pre-action protocol for professional negligence claims encourages the use of "ADR" (alternative dispute resolution) schemes before issuing court proceedings. The Legal Ombudsman scheme is an approved ADR scheme for these purposes. The homeowners duly requested that the conveyancers treat the letter of claim as a complaint in the first instance.

The conveyancers rejected the complaint and denied all liability. In the alternative, they raised various defence propositions and legal arguments in support of their contention that the most they could be liable for in any event would be circa £3,700.

Following legal advice, the homeowners referred their complaint on to the Legal Ombudsman. The conveyancers then challenged the Legal Ombudsman's jurisdiction. Our panel firm successfully defeated the jurisdictional challenge allowing the complaint to proceed. A Preliminary Decision was made by a case handler, having been persuaded by the case put forward by our panel firm, and awarded the homeowners the maximum £50,000, justified by reference to the expert report on costings obtained at the outset.

The conveyancers refused to accept the Preliminary Decision and presented further legal arguments in defence of the claim. The homeowners referred the complaint to an Ombudsman for a Final Decision.

The Ombudsman was also persuaded by the homeowners' case as presented, and also awarded the homeowners the maximum £50,000, again justified by reference to the expert costings report obtained at the outset.

The homeowners accepted the Final Decision, which became binding on the conveyancers.

Comments

Key to their success was that the homeowners sought specialist legal advice at an early stage, pursuant to which they ensured they obtained appropriate expert evidence in support of claim value, then presented the complaint persuasively throughout and defeated the technical jurisdictional challenges made by the conveyancers along the way.  Both the case handler and the Ombudsman made the maximum awards having dismissed all of the conveyancers' defence arguments and been persuaded by the expert report on costings.

The homeowners' costs were not recoverable under the Ombudsman scheme rules, but even taking this into account, their net recovery was still comparable to or better than the likely best-case-scenario they would have achieved by pursuing legal action through the courts. The Legal Ombudsman scheme took much less time compared to pursuing legal action through the courts, and the homeowners avoided having to fund expensive court fees, counsel's fees and higher legal fees that would have been associated with court action.

Don't underestimate the value of good quality legal advice even in relation to schemes such as the Legal Ombudsman scheme where costs are not normally recoverable.

New Build Guru's approach ensures Members make fully informed decisions about when to get professional help, and provides access to leading experts in all relevant fields to ensure you get the right help for the right outcomes.


Legal Ombudsman resources

Legal Ombudsman website

Scheme Rules (from 16 April 2018)

Data and decisions


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