The Financial Ombudsman Service: not just an alternative to court

DOIhttps://doi.org/10.1108/13581980710744020
Date15 May 2007
Published date15 May 2007
Pages135-142
AuthorWalter Merricks
Subject MatterAccounting & finance
The Financial Ombudsman
Service: not just an
alternative to court
Walter Merricks
Financial Ombudsman Service, London, UK
Abstract
Purpose – The Financial Ombudsman Service is a statutory body offering a dispute resolution
service to consumers and firms. The purpose of this paper is to outline the service as an alternative to
the civil courts.
Design/methodology/approach – The paper compares the style, objectives and operation of the
service with those of civil court proceedings.
Findings – The Financial Ombudsman Service has developed a very different model from that of the
civil courts and is the preferred alternative for most retail consumers of financial services.
Originality/value – The comparison in style, process, institutional systems and legal approach may
offer observers food for thought about potential developments in the civil courts themselves.
Keywords Ombudsman, Complaints, Dispute resolutions, Civil law, UnitedKingdom
Paper type Viewpoint
The Financial Ombudsman Service is a statutory body deriving authority from the
Financial Services and Markets Act 2000, empowered to operate a scheme “under
which certain disputes may be resolved quickly and informally by an independent
person”. Our jurisdiction includes firms regulated by the Financial Services Authority,
and the Ombudsman has the power to investigate complaints, and if appropriate to
require a firm to pay an award of compensation of up to £100,000. In addition, there is
also a voluntary jurisdiction that covers a number of non-regulated businesses
(including national savings and investments), and a consumer credit jurisdiction that
covers the 100,000 businesses with standard licences from the Office of Fair Trading.
The Ombudsman Scheme is one of four bodies provided for under the 2000 Act, the
others being the Financial Services Authority, the Financial Services Compensation
Scheme, and the Financial Services and Markets Tribunal. So the Ombudsman Scheme
is part of the statutory arrangements to underpin confidence in financial services. But
it is not part of the regulatory regime. As a mechanism for alternative dispute
resolution (ADR), it provides an alternative to the civil courts, so it can also be seen as
part of the administration of civil justice.
ADR as it is now often referred to, has become a recognised sphere of activity in its
own right across a variety of sectors. Conciliation, mediation, arbitration, adjudication
are now commonly encountered in such diverse fields as family breakdown,
construction disputes, shipping and insurance, and travel agency complaints. In the
commercial field, the City Disputes Panel and the Centre for Effective Dispute
Resolution are leading providers. Ombudsman Schemes are recognised as a distinct
grouping within the wider ADR field, whether dealing with the public sector (the Office
of the Parliamentary and Health Ombudsman and the Local Government Ombudsman
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1358-1988.htm
Financial
Ombudsman
Service
135
Journal of Financial Regulation and
Compliance
Vol. 15 No. 2, 2007
pp. 135-142
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980710744020

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT