Law firms and claims firms file far fewer complaints after £250 charge introduced
Complaints lodged with the Financial Ombudsman Service (FOS) by law firms and claims management companies (CMCs) have fallen sharply following the introduction of a new £250 case fee, according to newly released figures.
Between July and September 2025, so-called “professional representatives”, the category covering law firms and CMCs, were responsible for 4,300 cases, compared with 37,100 during the same three-month period last year. The figures show an almost 90% collapse in the number of professionally represented complaints brought to the FOS since the fee came into effect on 1 April.
The ombudsman service said that, in addition to filing fewer new cases, professional representatives have withdrawn or abandoned a large number of existing complaints.
Overall, the FOS received 46,300 new complaints during the quarter, 37% fewer than in the same period a year earlier. Around one-third of all cases resolved were upheld, with current accounts continuing to be the most frequently disputed product.
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Complaints relating to motor finance mis-selling also saw a significant decline. Only 2,200 complaints were filed in the latest quarter, compared with 9,500 in 2024. The fall reflects the impact of both the case fee and the Financial Conduct Authority’s (FCA) ongoing pause in complaint handling, introduced while it designs a redress scheme following a Supreme Court ruling on motor finance.
Under the current FOS structure, professional representatives can bring up to 10 cases free of charge in each financial year. For any additional cases, they are charged £250 per complaint.
If a complaint is upheld, £175 of that fee is credited back to the representative. When a case is not upheld, the financial business involved benefits from a reduced fee — £475 instead of £650.
Certain categories of complainants remain exempt from the fee. The exemption applies to charities, family members, and free advisory organisations. The service remains free for individual consumers who approach the ombudsman directly without professional assistance.
According to the FOS, most smaller representatives are unlikely to be affected. The service has stated that “the 10-case threshold should mean that four in five professional representatives will not incur a fee,” based on previous filing patterns.
Professional representatives are now waiting for the outcome of a recent consultation that closed last month, which could overhaul how the FOS bills organisations for case submissions.
Among the key proposals is a shift from a “free case” model to a monetary allowance. Under this plan, the allowance would assign a set financial value to the free cases offered to each representative, rather than a fixed number.
The ombudsman said the change would make the system fairer:
“A monetary allowance would be fairer to professional representatives, as it ensures that all representatives receive the same free case value. At present, case fees vary depending on the outcome of the case. This means that the ten free cases may be worth different amounts to different representatives. Our plan to offer a monetary allowance will ensure all representatives receive the same benefit, regardless of the outcome.”
The consultation also proposes expanding the “billing quarterly in advance” system — currently applied to a limited number of large firms — to include more businesses, such as professional representatives.
The changes reflect an effort by the FOS to simplify its billing process and reduce administrative burdens while maintaining access for consumers. The steep decline in case volumes means the ombudsman now faces a smaller caseload, freeing resources to focus on individual consumer complaints and more complex financial disputes.