FSCL – an independent statutory adjudicator 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 its request to use the term in its name, in a similar fashion 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 chief ombudsman’s permission.
The saga began in 2015 when FSCL applied to then Chief Ombudsman Dame Beverley Wakem, but was knocked back. It tried again the following year with a new chief ombudsman, Peter Boshier, in the chair but got the same result.
Court action followed; the Court of Appeal directing Boshier to reconsider. He did – and again refused the application. Back in the High Court again, a judge set aside the chief ombudsman’s decision on grounds it was pre-determined and ruled the matter was to be reconsidered by a temporary ombudsman appointed specifically for that purpose.
FSCL appealed, saying the High Court judge had erred by not making the decision herself. It also argued that the chief ombudsman had failed to treat FSCL the same as its competitors which, it said, was an unjustifiable limit on its right to freedom of expression, protected by s 14 of the Bill of Rights Act 1990.
The chief ombudsman argued he was concerned about the overuse of the “ombudsman” moniker by the private sector and the potential for confusion and the undermining of public confidence in the parliamentary ombudsman’s office.
He also said the Banking Ombudsman and the Insurance and Savings Ombudsman were in a different category as they were established in an unregulated market. FSCL was not in the same position as its activities were approved under the Financial Services Providers (Regulation and Dispute Resolution) Act 2008.
FSCL said it had fulfilled all the criteria set down by the ombudsman’s office for private organisations wanting to use the “ombudsman” name. Therefore, the only lawful decision by the chief ombudsman was to approve its application.
The Court of Appeal sided with FSCL, saying there was no objective, reliable basis for the chief ombudsman’s final decision. The facts he relied on to demonstrate a genuine risk of confusion in the public mind, leading to a lessening of confidence, “do not support the conclusion”, the court said.
The risk to the chief ombudsman’s role and status was negligible and his decision was an unreasonable limit on FSCL’s right to freedom of expression.
