Law firms told to pay for clients’ emotional suffering in service failures

Legal ombudsman urges firms to pay for emotional harm caused by poor service

Law firms must start recognising and compensating clients for the emotional harm caused by poor service, the legal ombudsman has warned.

In new guidance on handling complaints, the watchdog stressed that firms should reflect on the human impact of their failings and offer redress for upset, worry and inconvenience — not just financial loss. The ombudsman’s latest figures show that in 2024/25, compensation for emotional effects was ordered in more than 85% of cases where service fell below a reasonable standard.

“A client who learns that they are significantly out of pocket, through no fault of their own, is going to be upset about it,” the ombudsman said. “They might have an initial shock, encounter resistance in fixing the problem, and have some worries about the prospect of not getting their money back at all. Service providers who handle complaints most effectively will recognise the emotional effects in their response, even if offering a refund of fees or compensation.”

The ombudsman explained that its approach differs from that of the courts. While courts assess financial damages for proven loss, the ombudsman awards remedies for the consequences of poor service on the individual — such as the frustration, distress or inconvenience it has caused.

“It is common for us to hear from clients that the biggest consequence of a failing in the service they received has been emotional,” the statement continued. “A nasty surprise, the hassle of fixing a problem that should never have existed, or the frustrations that can flow from a breakdown in communication.”

The watchdog clarified that not all emotional distress qualifies for compensation. Inherently stressful matters — such as divorce, moving house, dealing with an estate, or waiting for a court hearing — may already cause significant strain. Firms are only expected to compensate where their actions, or inaction, have made the situation worse.

A key case study highlighted by the ombudsman involved a divorce client whose proceedings stalled for three years due to her law firm’s delays and poor communication. The ombudsman ordered the firm to pay £2,150 to cover fees and wasted expenses, plus a further £750 for the “intense and long-lasting” emotional impact caused by the mishandling of her case.

The ombudsman suggested that firms adopting a proactive stance could avoid more serious sanctions later. Acknowledging mistakes, apologising, and compensating for emotional distress early could prevent escalation to the ombudsman’s office.

The organisation’s advice is that firms should consider the client’s journey from the moment they realise something has gone wrong. Offering genuine empathy and recognising the strain poor service causes may help preserve relationships — and limit reputational damage.

By focusing on the person rather than just the problem, the ombudsman is pushing for a cultural shift in how complaints are handled. While financial refunds and fee reductions remain important, they may not address the deeper harm caused when trust in a legal representative breaks down.

With the latest statistics showing emotional harm awards in the vast majority of upheld complaints, firms failing to address the human side of service failings risk not only higher payouts but lasting damage to their professional reputation