‘An academic ombudsman’

Pages11-29
Publication Date01 Jan 2001
DOIhttps://doi.org/10.1108/eb025058
AuthorJulian Farrand
SubjectAccounting & finance
'An academic ombudsman'
Julian Farrand
Received (in revised form): 21st November, 2000
Pensions Ombudsman, Office of the Pensions Ombudsman, 11 Belgrave Road, London SW1V 1RB
tel:+ 44 (020) 7834 9144; fax: +44 (020) 7821 0065; e-mail: pensions_ombudsman@iclwebkit.co.uk
Journal of Financial Regulation and Compliance Volume 9 Number 1
Julian Farrand took up appointment as the
Pensions Ombudsman on 1st September,
1994. He is also Chairman of the Pensions
Compensation Board and was previously
the Insurance Ombudsman, a position he
held for nearly six years.' A solicitor and
former Law Commissioner, he was a Pro-
fessor of Law at the Victoria University of
Manchester for 20 years. While still hold-
ing a Practising Certificate and Member-
ship of The Law Society, he is also an
honorary QC and a Fellow of the
Char-
tered Institute of Arbitrators.
Dr Farrand has numerous publications
to his credit, notably 'Emmet on Title' with
which he has had editorial involvement for
30 years.
ABSTRACT
The paper focuses on the tensions between the
subjective discretionary decision making of an
ombudsman and the objective non-discretionary
decision making favoured by judges, especially
on appeal or judicial review from an ombuds-
man.
Is 'justice according to law', an oxy-
moron? Examples of
decisions
where the law
was deliberately not applied
because
it was not
considered
'fair
and
reasonable
in all the circum-
stances' are taken from the writer's time as
Insurance (and later Pensions) Ombudsman.
Will the Financial Services Ombudsman
Scheme revive a newer equity or will consis-
tency be
regarded
as something better than jus-
tice in the individual
case?
BACKGROUND
Descriptive and perceptive accounts, histor-
ical and analytical, of the development and
operation of 'ombudsman' schemes, both
public and private sector, abound. Many
are written by academics.1 Some ombuds-
men are (or have been) academics.2 But
none of the writing is, as yet, by an aca-
demic ombudsman offering a subjective, as
opposed to objective, account of what he
thinks he has been
doing.3
In 1992, I delivered a paper called 'The
pros and cons of the private ombudsman'.4
Addressed to the insurance industry,5 it
constituted, essentially, the case for the
defence. Of course, the overriding pro was
the opportunity to escape from costly and
legalistic litigation in court. Accordingly,
for consumers (as absent beneficiaries), the
following subheads were quickly covered:
choice, free, informal, inquisitorial, argu-
mentative, equitable, expeditious, binding
and independence. Then, for industry
(represented by an audience of unenthusias-
tic volunteers), greater time was spent on:
public relations, avoidance of legislation,
cost effectiveness, conciliation, confidential-
ity, industry practice, consistency, expertise
and buck-catching. After this, in theory for
everyone, a few 'overall advantages' were
outlined: improved complaints handling,
principles of practice re-examined and
public accountability.
Eventually, the cons were covered. Here
Journal of Financial Regulation
and Compliance, Vol. 9. No. 1,
2001.
pp.
11-29
Henry Stewart Publications.
1358-1988
Page 11
'An academic ombudsman'
the emphasised subheads appeared at the
time constructively, rather than destruc-
tively, critical: case load, non-members,
terms of reference, excessive informality,
conflicting functions, (un)natural justice,
double-edged equity, binding, unreported
decisions, rival rules, independence and
confusion. Although not all of these seem
self-explanatory, a few will be largely
cured with the advent of the Financial Ser-
vices Ombudsman Scheme (eg non-mem-
bers and confusion), while others may
perhaps be aggravated (eg case load and
excessive informality).
Not emphasised by any subhead was
what should, however, be recognised as the
true weakness and/or strength of the
ombudsman idea. That is, the ombudsman
himself or
herself.
The relevant passage
from my 1992 paper is:
'Of course, the most dangerous con is
necessarily central to any scheme: some
ombudsmen may not possess the wisdom
of Solomon or even the patience of Job
(the wrath of Jehovah seems easier to
achieve). Choosing the right person is the
council's responsibility. While the
banking, building societies' and estate
agents' councils have undoubtedly chosen
their ombudsmen well, I do not know
what qualities they actually sought.
Against this I can hardly say that the
IOB's council chose well but the qualities
sought are known. The advertisement
which attracted me referred to "an oppor-
tunity for a lawyer with wide experience
to take up the position of insurance
ombudsman" and proceeded to explain:
"You will investigate cases submitted to
you by members of the public, arriving
at a common-sense and fair decision
based on the law and good insurance
practice. Probably aged between 45 and
55,
you will possess an analytical mind,
excellent verbal and written skills and the
ability to negotiate. Diplomacy and the
ability to communicate with people from
all walks of life are important attributes."
Nearly four years' experience in the
position, however, indicates to me
certain additional, perhaps more funda-
mental qualities. An ombudsman must
be clever enough to understand the legal
and factual arguments and sensible
enough not to lose sight of the basic
merits. Then an ombudsman must be
resolute enough to resist bluster.
Whether or not any particular
ombudsman meets the requisite criteria is
for others to assess. Nevertheless, I
would venture to suggest that although
the ombudsmen's industries should have
sufficient confidence in their qualities,
there would be cause for concern if they
felt consistently comfortable with the
performance of their ombudsmen.'
Insurers in the audience clearly felt uncom-
fortable with this last sentiment. For pre-
sent purposes, however, it may appear
more important to observe that appoint-
ment as Insurance Ombudsman is no
longer seen as 'an opportunity for a
lawyer': witness the current incumbent,
Tony Boorman, whose experience is of
electricity regulation.6 Even at the time of
the Insurance Ombudsman Bureau's
(IOB's) creation, it had never been essential-
for public ombudsmen to be lawyers.
FOREGROUND
In the beginning, albeit after appointment,
without experience of ombudsmanning or
indeed insurance, I did deliberate, as a
long-standing academic would, about
guiding principles. But I actually did my
deliberating as a lecturer, for over 20 years,
in equity and trusts7. Worse to confess, I
also did so as a former law reformer preju-
diced in the nicest possible way
against insurers.8 An article of belief for me
Page 12

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