The unified compulsory ombudsman scheme
| DOI | https://doi.org/10.1108/eb024988 |
| Published date | 01 April 1998 |
| Date | 01 April 1998 |
| Pages | 371-378 |
| Author | Walter Merricks |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 6 Number 4
The unified compulsory ombudsman scheme
Walter Merricks
Received: 9th September, 1998
The Insurance Ombudsman Bureau, 135 Park Street, London SE1 9EA; tel: 0171 902 8100;
fax: 0171 902 8197
Walter Merricks has been Insurance
Ombudsman since 1996. After qualifying
as a solicitor in 1970 he has held posts as
director of a community law centre, an
academic law
teacher,
a legal journalist,
and latterly as assistant secretary-general
of the Law Society. He is an executive
committee member of the British and Irish
Ombudsman Association, and is currently
a member of the Ombudsman Steering
Group appointed by the FSA to help plan
the financial services ombudsman
scheme.
ABSTRACT
The Bill
provides
for five different ombudsman
schemes and three other complaint handling
schemes into a single unified scheme. All the
existing schemes have different legal derivations
and industry
coverage;
defining the
scope,
func-
tions
and
funding of the new scheme will be a
considerable
challenge.
This paper analyses the
FSA proposals and highlights some of
the
criti-
cal legal and policy issues to be resolved.
INTRODUCTION
From the point of view of consumers of
financial services the provisions in the
Financial Services and Markets Bill estab-
lishing a single ombudsman scheme, repre-
sent, perhaps, some of the more
interesting of the reforms proposed. The
new scheme is intended to replace eight
existing dispute resolution schemes. The
decision of the Government to legislate to
combine these in a single scheme was not
the subject of prior consultation, but was
made public when the Financial Services
Authority (FSA) published its Consulta-
tion Paper 4 (CP4) on how this decision
might be implemented.2 The task of com-
bination represents a formidable challenge,
equal perhaps in complexity (but not in
size) to that posed by the creation of the
FSA
itself.
EXISTING SCHEMES
The mix of ingredients: voluntary and
statutory
Although the functions of the existing
schemes are superficially similar, the
schemes vary in a variety of significant
ways.
Some are compulsory and derive
their authority from statute; some are
voluntary and the contract between the
member firm and the scheme provides the
legal basis for the decisions of the ombuds-
man, which thus bind the members. The
Banking and Insurance Ombudsman
schemes both fall into the latter category as
voluntary contractual schemes. The Insur-
ance Ombudsman Bureau can claim to be
the originator of the idea of importing the
ombudsman idea from the public sector
into the private sector, and is the oldest of
the schemes, having been established in
1981.
The Banking Ombudsman came not
long after in 1986. Neither ombudsman is
susceptible to judicial review.5
The building societies scheme is a com-
pulsory scheme provided for in the Build-
Journal of Financial Regulation
and Compliance, Vol. 6, No. 4.
1998.
pp. 371-378
© Henry Stewart Publications,
1358-1988
Page 371
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