Financial Ombudsman Unbiased? I think not!

magpiecottage

Alpine_Star wrote: »

your belief that I think ''that FOS is biased in favour of the banks'' is as mis-placed as your understanding of law.

From a Memorandum by HM Treasury on the Financial Services Authority


"11. The FSA has rule-making powers, power over the preparation and issuing of codes and is able to give general guidance and determine general policies. The FSA's rules impose binding requirements on authorised (and in some cases unauthorised) persons, which have the force of law."

Alpine_Star wrote: »

Well a pretty well know fact is that most people don't go to the ombudsman after their complaint is dismissed.

Odd that, if most of them think the Ombudsman would be biased in their favour.

Looks like, quacks like.

Alpine_Star

magpiecottage wrote: »

From a Memorandum by HM Treasury on the Financial Services Authority


"11. The FSA has rule-making powers, power over the preparation and issuing of codes and is able to give general guidance and determine general policies. The FSA's rules impose binding requirements on authorised (and in some cases unauthorised) persons, which have the force of law."




Looks like, quacks like.

This is truly desperate.

Angry_Cat

To a point this entire debate in terms of the FSA and the topic of this thread is completely pointless. The FSA had nothing to do with insurance (including PPI) until 2004 anyway. Sales of PPI prior to 2004, were subject to the self-regulation by the General Insurance Standards Council.

Angry_Cat

With regard to the points made about the FOS and any requirement for it to follow the law -

Need FOS follow the law?

The answer is no - this is key. Section 228(2) of FSMA and DISP 3.8.1 provide that:

"A complaint is to be determined by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case."

This does not require, as it might have done, a complaint to be determined in accordance with the law.

Instead, the Ombudsman is required to determine a complaint by reference to what is, in his opinion, fair and reasonable in all the circumstances of the case, taking into account the relevant law, rules and guidance, and good industry practice at the relevant time.

However, he is entitled to depart from the law if, in his opinion, this achieves a fair and reasonable outcome.

The words "in the opinion of the Ombudsman" themselves make it clear that he may be subjective in arriving at his opinion of what is fair and reasonable in all the circumstances of the case.

One Court decision considers that the Ombudsman is entitled, and probably obliged in order to maintain consistency, to develop criteria as to what constitutes unfairness – in other words, what is not fair and reasonable. These criteria are a matter for him, even though reasonable people might disagree with them because the concept of unfairness is so wide.

This width deters over-active judicial intervention into FOS’s approach or the application of these criteria to the particular case in question.

The FOS scheme does not require the Ombudsman to make a decision in accordance with English law. If the Ombudsman considers that what is fair and reasonable differs from English law, or the result under English law, he is free to make an award in accordance with his, different, view provided only that it is a reasonable view in all the circumstances.

To give two examples recognised by the Court, the Ombudsman can:

Make a monetary award for loss outside the scope of a firm’s legal responsibility;

Accept a claim that would be time-barred, where rejection on that ground would be unfair and unreasonable in all the circumstances of the case.

Need FOS take the law into account?

The answer is “yes” because DISP 3.8.1 requires this. Provided, however, that the Ombudsman’s reasoning is based on English law, there is no need for him to actually express the elements of English law being relied upon.Where he disagrees with a result based on English law, the Ombudsman fulfils this criterion simply by stating that the application of English law would not produce a result that was fair and reasonable in all the circumstances

Angry_Cat

magpiecottage wrote: »

But I would venture that Lord Hoffman's opinion about what is fair and reasonable ought to carry more weight than yours (or mine) and therefore should be considered by the Ombudsman.

If the Ombudsman chooses to ignore it then they should give reasons for doing so.

However, I believe you were in sympathy with the assertion that FOS is biased in favour of the banks. My post was evidence to the contrary so it would seem to undermine that assertion.

The applicable law -being the FSMA 2000, more specifically s.228 (2) states:

"A complaint is to be determined by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case."

It does not say a complaint is to be determined by reference to what is, in the opinion of Lord Hoffman, fair and reasonable in all the circumstances of the case.

Lord Hoffman may be able to set legal precedence but that precedence is the judiciary interpretation of legislation, which in this instance could not be anymore clearer. The determining factor is the opinion of the ombudsman.:money:

Alpine_Star

Angry_Cat wrote: »

The applicable law -being the FSMA 2000, more specifically s.228 (2) states:

"A complaint is to be determined by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case."

It does not say a complaint is to be determined by reference to what is, in the opinion of Lord Hoffman, fair and reasonable in all the circumstances of the case.

:money:

We know.

See post #87.