Financial services complaints body wins years-long court battle against chief ombudsman

After a seven-year battle and two visits to the Court of Appeal, Financial Services Complaints Ltd (FSCL) won the right to use the term ‘ombudsman’ in its name.

Thursday, June 16, 2022, 9:20 a.m.

by Jenni McManus

FSCL – an independent statutory arbiter of complaints between consumers and 7,000 market participants such as financial advisers, insurers, non-bank lenders and finance companies, mortgage brokers, insurance brokers, trustees and fund managers – had filed for judicial review of a decision by the Chief Ombudsman to refuse his request to use the term in his name, similar to the Banking Ombudsman Scheme and the Insurance and Savings Ombudsman Scheme.

Since 1991, it has been illegal for anyone to call themselves an ombudsman without the authorization of the chief ombudsman.

The saga began in 2015 when the FSCL applied to the then Chief Ombudsman, Dame Beverley Wakem, but was turned down. He tried again the following year with a new chief ombudsman, Peter Boshier, as president, but achieved the same result.

Legal action followed; the Court of Appeals ordering Boshier to reconsider. He did – and again refused the request. Back in the High Court, a judge quashed the Chief Ombudsman’s decision on the grounds that it was predetermined and ruled that the case should be reviewed by a temporary ombudsman appointed specifically for this purpose.

The FSCL appealed, saying the High Court judge erred in not making the decision himself. He also argued that the Chief Ombudsman had not treated the FSCL in the same way as its competitors, which he said constituted an unjustifiable limit on his right to freedom of expression, protected by Article 14 of the Bill of Rights Act 1990.

The Chief Ombudsman expressed concern about the excessive use of the moniker “ombudsman” by the private sector and the potential for confusion and undermining public confidence in the office of the Parliamentary Ombudsman.

He also said that the banking ombudsman and the insurance and savings ombudsman belonged to a different category because they had been established in an unregulated market. FSCL was not in the same position as its business was approved under the Financial Services Providers (Regulation and Dispute Resolution) Act 2008.

The FSCL has declared that it has met all the criteria established by the Office of the Ombudsman for private organizations wishing to use the name “Ombudsman”. Therefore, the Chief Ombudsman’s only legal decision was to approve his request.

The Court of Appeal sided with the FSCL, saying there was no objective and reliable basis for the Chief Ombudsman’s final decision. The facts he relied on to show a real risk of confusion in the mind of the public, leading to a decline in confidence, “do not support the conclusion”, the court said.

The risk to the role and status of the Chief Ombudsman was negligible and his decision constituted an unreasonable limit on the FSCL’s right to freedom of expression.

Tags: FSCL

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