The firm challenged our jurisdiction and failed to respond to the complaint as they were acting for the mortgage lender and not Mr Z…
Mr Z bought a property in 2012. Some years later he decided to move his mortgage to another lender, as he found a different mortgage product that was £45 cheaper per month. The lender agreed to offer Mr Z a mortgage and instructed a firm of solicitors to complete the legal aspects of the re-mortgage.
The firm wrote to Mr Z to explain their role. They advised him that they were acting for the lender, not him, and it was the lender who was their client and paying their fees. The firm also advised Mr Z that they would be unable to provide him with any legal advice in relation to the transaction, and if Mr Z required legal representation, he would have to arrange this himself.
Mr Z was keen for the re-mortgage to complete so his monthly mortgage payments would reduce, but he considered that the firm were unreasonably delaying matters. Mr Z decided to complain to the firm about this however, they refused to respond to the complaint. The firm said that Mr Z was not their client as they had explained in their letter to him, and therefore he did not have any right to complain to them.
The firm had still not responded to Mr Z after eight weeks, so he referred the matter to this office. When we told the firm that we had accepted Mr Z’s complaint for investigation, they exercised their right under our Scheme Rules to challenge our involvement in the matter. They referred to their initial letter and reexplained that the lender was their client who had instructed them and paid their fees, not Mr Z. The firm said they did not provide a legal service to Mr Z so we should not be looking at his complaint.
We carefully considered the firm’s challenge. In our response, we explained that under our Scheme Rules there is no requirement for the person who is complaining to have been the service provider’s client. Rather, we would determine whether the service provider had provided a legal service to the person complaining.
In this case although we accepted that the mortgage lender was the firm’s client, we determined that the firm were providing a service to Mr Z. We explained that any errors or delays made by the firm in administering the re-mortgage could result in detriment to Mr Z and specifically financial loss. We therefore decided that it was fair and appropriate to continue with an investigation into Mr Z’s complaints.
We later concluded that the firm’s service was unreasonable. The evidence showed that the firm delayed in acting on the matter and had no reasonable explanation for this. If the firm’s service had been reasonable, Mr Z’s matter would have completed four months earlier.
We accepted that Mr Z had suffered financial loss as a direct result of the firm’s service as he had lost the opportunity to save £45 per month over those four months. To return Mr Z to the position he would have been in had the service been reasonable, we proposed that the firm reimburse Mr Z for this loss which totalled £180.
As Mr Z had expressed concerned about the progress of the matter and the firm had not responded to his complaint, we also proposed that Mr Z should be compensated £100 for the emotional impact. This is within our modest award as the impact of the poor service was short-lived and did not cause Mr Z repeated inconvenience.
Guidance: Scheme Rules FAQ | Legal Ombudsman
Guidance: Our approach to determining complaints | Legal Ombudsman
Guidance: Our approach to putting things right | Legal Ombudsman
