Reforming the Role of the Financial Services Ombudsman
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Reforming the Role of the Financial Services Ombudsman Dorots Galeza1
© Springer Nature B.V. 2020
Abstract Although the recent reforms are highly beneficial for consumers, the ombudsman service has received little attention. The formal process of adjudication has been explored in much detail, but there are still gaps remain in understanding of models of informal justice systems in Europe. This is particularly relevant to the ombudsman services. The sparse existing literature on ombudsman deals mainly with the global spread of the ombudsman concept since the 1960’, but it does not deal in detail with the effectiveness of this institution and the comparative perspective in this area. Overall, the vast number of criticisms aimed at the UK ombudsman stems from the fact that this system is not as effective as the court system. The remedy for this situation would be to incorporate certain solutions from Ireland and Scandinavia, especially from Finland, such as group actions and the facilitation of the system to use in normal courts. Such changes that have developed in other jurisdictions, especially Finland, are worth observing but should not be replicated without a thorough, well-thought-through reform, including the procedure, budgets and legal aid for such actions. Incremental changes might be very effective. However, due the strong lobby of the insurers, the change might occur in relation to a crisis such it had happened in Ireland. Keywords Comparative thinking · European financial markets · Administrative change · Financial ombudsman
Introduction To some extent, the principles underpinning the Insurance Act and the institution of an ombudsman are poles apart. The Ombudsman Service was clearly left outside the scope of the reform. On the one hand, this reform was designed to design high level overarching principles which would give detailed guidance for every eventuality even though it might quickly become obsolete and the Act would become redundant, * Dorots Galeza [email protected] 1
University of Southampton, Southampton, UK
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so the endeavour was placed to set out over-arching principles rather than prescriptive practices. These overarching principles are at odds with the continuation of the Financial Ombudsman Service (FOS) in the current format, which is likely to restrict the flow of cases. Even though there are some minority voices which question the functioning of the whole institution (Donnelly 2012, p. 230, Hogan J in Lyons v Financial Services Ombudsman [2011] IEHC 454 [13] stated that ‘What after all, is the purpose of the FSO and, perhaps, more specifically, how do its functions differ from those of the courts?), this article takes a stance that this institution needs to be reformed. This article will set out certain changes which would be useful for the British FOS. This article is structured in the following manner. First, it sets the methodology for this article. Secondly, it describes the UK office of the ombudsman, its development and history, as
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