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How the Legal Ombudsman's Office ripped off the taxpayer with a £1m irregular incentive scheme

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David Henckelondon
How the Legal Ombudsman's Office ripped off the taxpayer with a £1m irregular incentive scheme
The Legal Ombudsman - the public body that handles thousands of complaints against solicitors and barristers- has itself been awarding its staff irregular and contentious incentive payments without getting legal approval from the Ministry of Justice.

What would you think if the organisation that handles your complaint against a poorly performing solicitor or barrister was itself ripping you off as a taxpayer?

That is the extraordinary situation in the Office of Legal Complaints or Legal Ombudsman for the last six years where well over £1m extra cash has been paid to its staff without approval from anyone just to keep them from taking jobs in the private sector.

This was exposed last month in a virtually unreported disclosure from the National Audit Office. I have written it up for Tribune magazine this month.

The office handles tens of thousands of complaints every year from the general public about poor service from legal professionals - whether it is over conveyancing,personal injuries, wills or family disputes. What emerged about what was going in this office of over 200 people has led to resignation or dismissal ( whether you take his version or the Ministry of Justice's ) of its £167,000 a year head, Adam Sampson who has been described by his permanent secretary as “ not a fit and proper person” to continue as an accounting officer to Parliament.

He presided over what the NAO called a " novel and contentious" irregular payment scheme which saw its top officers and the rest of his staff benefit from pay enhancements well beyond anything else available in Whitehall currently suffering pay freezes and one per cent pay rises.

The two unauthorised pay schemes were aimed to retain legal staff who might be tempted to leave and join the private sector. One for senior executives was according to the annual accounts “a benefit in addition to salary and was ­believed by the OLC at the time to be necessary to attract and retain the best candidates nationally to senior posts within the organisation”. Some £33,000 was paid out the last financial year – ­altogether some £348,000 has been paid over six years.

The second scheme for general staff allowed up to an extra 3 per cent to be paid on top of their salaries to encourage them not to leave to join the private sector. This cost nearly £900,000.

Neither scheme was authorised by the Ministry of Justice and neither was spotted for four years either. Successive Lord Chancellors -Kenneth Clarke and Chris Grayling didn't notice.

On top of this there is suggestion of alleged expenses fiddling by the chief executive.

The report said an arrangement from 2009 assumed “Mr Sampson to be living in Birmingham [where the OLC offices were based from January 2010] despite his only spending up to two nights a week in Birmingham away from his London home.”

The claims involved train fares which could not be solely justified for business use between London and Birmingham.

The Ministry has reported him to the tax authorities for not declaring them as a benefit in kind. Altogether he had received over £27,000 in benefits in kind over the last two years in office.

What is extraordinary is that the two schemes are still in existence today and the Treasury is trying to end them this year. The reason is that the contracts drawn up by lawyers are so watertight that the Treasury is having difficulty unravelling them.

One can only say that if the lawyers spent as much time providing a good service to the public as they did in drawing up lucrative contracts for themselves Whitehall would be a much better place.

#Legal Ombudsman, #Ministry of Justice, #national audit office, #irregular payment schemes, #pay scandal, #legal complaints

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