Lawyers Covered - July 2026

It can be tough for busy lawyers to find enough time to service clients, make it safely through the regulation obstacle course, win new work and keep up-to-date with developments, but we've got you covered! Welcome to our Lawyers Liability & Regulatory Update, in which we highlight the last month's key developments affecting lawyers and the professional risks they face.

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Consultation Launched on Changes to Legal Ombudsman Scheme Rules

The Office for Legal Complaints (the OLC) launched a consultation on proposed changes to the Legal Ombudsman (the LeO) Scheme Rules. The proposed changes intend to help weed out inconsequential complaints, introduce a 12-year long-stop for historic complaints, and mandate the use of the online complaint form (unless exceptional circumstances apply). The consultation also proposes simplifying the Scheme Rules and encouraging case resolution via investigator findings rather than LeO final decisions.

The LeO proposes to increase case fees, such that service providers that are the subject of more complaints will shoulder more of the costs of the LeO's work (concomitantly reducing the levy paid by service providers that have not been the subject of complaints). Under the proposed changes, unless a case fee waiver test is met, the LeO will charge service providers £200 for early resolution, £750 for investigation and £1,500 for an LeO final decision. Service providers will also be charged an additional £400 fee (irrespective of eventual outcome), if the service provider did not issue a final response to a complaint within eight weeks.

The consultation proposes moving towards publishing all LeO final decisions (after redacting identifying information of complainants).

The consultation is open until noon on 2 September 2026, and approved changes are expected to be implemented from 1 April 2027.

The Legal Ombudsman's duty to give reasons does not match that of a court judgment

In the recent Court of Appeal decision of Aina Khan Law Ltd v Legal Ombudsman, the Court allowed an appeal by the Legal Ombudsman against the quashing of a compensation award.

The Ombudsman had initially upheld a complaint by a client that AKL had failed to assess the client's capacity and had charged excessive costs for work it carried out. AKL had successfully challenged that decision at first instance, winning on the grounds of 'process irrationality'. The Ombudsman challenged that decision and its appeal was allowed on the basis that there was no evidence of irrationality of any kind in the reasoning or decision made.

The judgment provides interesting clarification and guidance about the Ombudsman's statutory scheme and framework. Decisions are only required to assess r what was "fair and reasonable in all the circumstances". The scheme is intended to be inquisitorial, rather thandversarial, and is intended to resolve complaints quickly.

There is a high threshold to be reached to demonstrate r 'process irrationality' – reasoning not logically capable of supporting the conclusion, as opposed to 'outcome irrationality'. Given the Ombudsman's wide discretion and informal nature, decisions had to be read generously, fairly and as a whole, considering that they are addressed to parties familiar with the materials.

The Court of Appeal felt that the first instance judge had taken a selective approach to the paragraphs he had based his decision on rather than reviewing the wider decision in context. It found that the judge had applied excessive legalism which would impose a burden on the Ombudsmen that was incompatible with the scheme. An ombudsman exercising an inquisitorial, non-judicial function was not required to meet the standard of reasons expected of a court judgment.

This case gives clarity on the role of the Legal Ombudsman, the requirements of the statutory scheme and the reasons for and the expectations of its decisions. It also highlights the strengths, risks and drawbacks of addressing issues through the scheme, as opposed to the more stringent standards of the courts.

New Bar Council and Bar Standards Board Protocol

In her review into bullying at the Bar of September 2025, Baroness Harriet Harman KC recommended the appointment of a Commissioner for Conduct at the Bar Council, who was duly appointed (Dame Maria Miller). The Commissioner has now, together with the Bar Standards Board (BSB), agreed a new protocol setting out how the two organisations will work together to deal with people suffering bullying and harassment at the Bar. The protocol also brings forward other elements of the review.

Barristers under a duty to report serious misconduct to the BSB, can now report to the Commissioner for Conduct, where the misconduct concerns bullying, harassment or sexual harassment. The new guidance suggests that in relation to these areas of misconduct, a report is made where there is a "reasonable suspicion" that the misconduct took place, a lower threshold than the previous guidance of "reasonable belief".

A report direct to the BSB also remains an option. The Commissioner will offer support and guidance without triggering an obligation on the complainant to report to the BSB, but will support them in doing so as appropriate.

The protocol confirms that where a report meets its threshold for serious misconduct, the BSB will take action on behalf of the complainant. Where that threshold is not met, the complainant will be supported by the Commissioner for Conduct in bringing the matter to the attention of the appropriate body (for example the relevant chambers or the judiciary).

The Bar Council and BSB expressed the hope that this implementation of the Harman review will help to drive culture change and address the barriers to the reporting of bullying and harassment. 

SRA Mergers notification consultation

On 19 June 2026 the SRA announced the launch of a consultation on proposals to require law firms to notify it of a contemplated merger or acquisition.

The consultation, which is open until 17 August 2026, is part of the SRA's Consumer Protection Review which is focused on protecting client money held by solicitors.

Currently a law firm must notify the SRA within 28 days if it is closing as a result of merger or acquisition. If the merger results in new owners, then that must also be communicated to the SRA.

Under the proposed changes law firms would have to disclose that a merger or acquisition is being contemplated and that it has reached the Heads of Terms stage or equivalent.  It would also provide notification of:

• the turnover of the acquiring and target firm
• the value of client money held by the acquiring and target firms
• a breakdown of the areas of law practised by the acquiring and target firms,
• expected completion date and the number of acquisitions by the acquiring and target firm within the last 24 months.
• the proposed structure after the merger is complete.

The consultation follows the high-profile collapses of PM Law and Axiom Ince. Together they have cumulative client losses of more than £100 million. Both had grown rapidly by acquiring other existing law firms.

Whilst the SRA are not contemplating an approval process, if the reforms are approved, law firms will have to consider carefully the impact on completions and greater regulatory scrutiny pre-completion than is currently the case - watch this space!

Singapore: The Law Society of Singapore study spotlights systemic drivers of attrition and potential regulatory implications

A Law Society of Singapore-commissioned sustainability study (based on a multi-year survey and interviews across practising and former lawyers) concludes that departures from private practice are linked less to individual shortcomings than to entrenched structural and cultural features of legal work. The report frames workplace culture as a central factor, describing accounts of incivility and bullying across seniority levels, intense availability expectations (including during leave and sickness), and early-career role design that can leave junior lawyers over-dependent on a single supervisor and with limited psychological safety to learn from errors.

The study also identifies court-related pressures as a distinct stressor. Respondents describe demanding timelines and difficult courtroom interactions, including concerns about the absence of a low-risk avenue to raise day-to-day feedback on judicial conduct and listing practices. In response, the judiciary points to existing complaints channels, acknowledges perceptions of under-use, and indicates that a Judiciary–Law Society joint working committee will consider whether engagement and feedback mechanisms can be strengthened.

For law firms and in-house teams, the themes have direct governance and risk relevance. Allegations of bullying, boundary breaches and inadequate supervision can translate into higher people risk, increased grievance and whistleblowing activity, reputational exposure, and (in some cases) professional indemnity risk through stressed teams, rushed work and reduced quality control. The report’s focus on validated wellbeing measurement and stronger mentorship also aligns with broader expectations of effective controls, supervision and safe reporting lines.

The Ministry of Law has indicated the findings warrant careful consideration, and the Law Society has established a task force to develop recommendations, signalling that further sector-wide initiatives may follow.

With thanks to our additional contributors: Jo Makin, Robyn Crowter, Aimee Talbot and Sally Lord.

Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice. We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date. You should seek legal or other professional advice before acting or relying on any of the content.

If there are any issues on which you'd like more information (or if you have any questions or feedback), please do let us know or get in touch with your usual contact at RPC.