Financial ombudsman comes under fire as insider reveals litany of bad practices

[Mike_hawk]

Iaineynic

 

The £300.00 is a derisory sum but...... the FOS rarely award much more in cases of distress.

 

I would urge caution in accepting the offer if you intend to seek remedy in court at a future date, Andrews v SBJ may cause you problems.

 

Phil

[Mike_hawk]

Hmmm........ i seem to remember posting on this subject quite some time ago, and it's interpretation of 1a is to allow the court to decide

 

Do bear in mind an adjudicator or ombudsman can be ordered to attend as witness

 

 

In considering what is fair and reasonable in all the circumstances of the case, the Ombudsman will take into account

1) relevant:

(a) law and regulations;

(b) regulators' rules, guidance and standards;

© codes of practice; and

(2) (where appropriate) what he considers to have been good industry practice at the relevant time.

[Mike_hawk]

A further note - 'the ombudsman will take into account' - the adjudicator said he was not required to follow law - does this mean adjudicator is not required to follow the above list but Ombudsman is ?

 

Following link may assist

 

http://www.legislation.gov.uk/ukpga/2000/8/schedule/17/paragraph/1

 

........ and the current panel

 

http://www.financial-ombudsman.org.uk/about/panel-ombudsmen.html

[Mike_hawk]

Andrews v SBJ may also provide some insight, para's 24 thru 27 make for interesting reading;

 

http://www.bailii.org/ew/cases/EWHC/Ch/2010/2875.html

 

 

 

24. And by 3.5.9, it is provided that:

 

"The Ombudsman may:

(1) exclude evidence that would otherwise be admissible in a court or include evidence that would not be admissible in a Court …"

25. In R (Heather Moor & Edgecomb Ltd) v Financial Ombudsman Service Ltd [2008] EWCA Civ 642, it was recorded as being common ground that Article 6 of the European Convention on Human Rights and Article 1 of the First Protocol thereto applies to the activities of FOS: see paragraph 42 of the lead judgment in that case. Both Counsel before me expressly accepted that the concession in Heather Moor had been rightly made and was made likewise in this case. In that case, the Court of Appeal said, at paragraph 44:

'A1P1 must be read alongside Article 6, which envisages decisions of courts or tribunals in civil proceedings holding a respondent liable to a claimant. A determination by a court or tribunal complying with Article 6 requiring a respondent to pay a sum of money to a claimant does not infringe the respondent's rights under A1P1. Provided the scheme established under the 2000 Act satisfies the requirements of "law", and satisfies the requirements of Article 6, no question of incompatibility arises.'

An attack based on incompatibility was advanced before the Court of Appeal but was rejected by that Court for the reasons summarised in paragraph 49 of the lead judgment, which was to the following effect:

'Does the scheme established under the 2000 Act, interpreted in accordance with its natural meaning, comply with these requirements? In my judgment, it can and does. The ombudsman is required by DISP 3.8.1 to take into account the relevant law, regulations, regulators' rules and guidance and standards, relevant codes of practice and, where appropriate, what he considers to have been good industry practice at the relevant time.

He is free to

depart from the relevant law, but if he does so he should say so in his decision and explain why

. The other matters referred to in this rule are matters that a court would take into account in determining whether a professional financial adviser had been guilty of negligence or breach of his contract with his client. Again, if the ombudsman is to find an advisor liable to his client notwithstanding his compliance with all those matters, the ombudsman would have to so state in his decision and explain why, in such circumstances, assuming it to be possible, he came to the conclusion that it was fair and reasonable to hold the adviser liable. In these circumstances, I consider that the rules applied by the ombudsman are sufficiently predictable. All the matters listed in DISP 3.8.1 are formulated or ascertainable with sufficient precision. So far as guiding the conduct of financial advisors are concerned, provided that they comply with "the relevant law, regulations, regulators' rules and guidance and standards, relevant codes of practice and, where appropriate, … good industry practice", they can be assured that they will not be liable to their client in the absence of some exceptional factor requiring a different decision.

Lastly, the common law requires consistency: that like cases are treated alike. Arbitrariness on the part of the ombudsman, including an unreasoned and unjustified failure to treat like cases alike, would be a ground for judicial review.'

26. Rix LJ in a concurring judgment said this at paragraph 80:

'The effect of these provisions is not to leave the Ombudsman's determination to his entirely subjective views, as though he was operating according to the length of his foot, so to speak. That, it seems to me, is not the effect of the statutory language which defers to the "opinion of the Ombudsman". Rather, that is typical language to emphasise that the decision is for the Ombudsman, not for a judge. However, the Ombudsman remains amenable, through the ordinary process of judicial review, to a challenge on such grounds as perversity or irrationality. That was not in dispute. It was the view of Stanley Burnton J, as he then was, in

R v. FOS Ltd ex parte IFG Financial Services Ltd

[2005] EWHC 1153 (Admin)

, unreported 19 May 2005, at para 13.

That is not the same, however, as saying that the Ombudsman is bound to apply the common law in all its particulars. He is, after all, dealing with complaints, and not legal causes of action, within a particular regulatory setting. Rather, he is obliged ("will") to take relevant law, among other defined matters, into account.'

 

27. These conclusions, which I have set out at some length, are relevant to the question whether FOS is to be regarded as a tribunal for the purpose of the merger doctrine.

[Mike_hawk]

Hi Cb

 

The Fos maintain records of speaches for previous incumbents to the Chief Ombudsman position

 

There's an old [2001] Walter Merricks ramble at the following link, 'Conclusions' at the footer of the page pretty much sets out its stall and where it believes it delivers purusant to Article 6

 

http://www.financial-ombudsman.org.uk/news/speech/chantrey-vellacott-dfk.htm

 

'We do not have to pretend to "find" what the law is. We unashamedly make new "law". '

[Mike_hawk]

Hi Red-ed

 

Over 1 million complaints handled by 1,178 staff last year........... hmmm

 

Assume a very conservative 40 hour week, 5 weeks annual leave - total of 2,214,640 business hours. Gives a mean average slightly in excess of 2 hours per complaint. Could anyone honestly believe they are applying the necessary time to every complaint?

 

http://www.financial-ombudsman.org.uk/news/pdf/NAO-report-2012.pdf