ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.
The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.
Following a suggestion from the Financial Ombudsman Service, the Banking and Loans Liaison Group was established in January 2000. It comprises representatives from the BBA, BSA and CML plus a selection of practitioners from banks and building societies. Walter Merricks (chief ombudsman), David Thomas (principal ombudsman, banking and loans) and other Financial Ombudsman Service representatives also attend.
The Liaison Group’s short-term aim has been to deal with the raft of consultation documents issued by the Financial Services Authority and the Financial Ombudsman Service – on, for example, the rules of the new scheme and appropriate funding mechanisms. The Group has also looked at the "nuts and bolts" of the Financial Ombudsman Service itself and of the Financial Services Authority’s rules on internal complaints procedures.
We believe it has fulfilled a useful purpose during this process. However, now that the bulk of this consultation is over, it is time to ask if there is a longer-term role for the Liaison Group – and, if so, what that role is. This article addresses that issue.
Under existing arrangements, the Boards of the Banking Ombudsman Scheme and the Building Societies Ombudsman Scheme Boards have provided the corporate governance of the (voluntary) banking ombudsman and (statutory) building societies ombudsman, but have also acted as a high level forum to enable the ombudsmen to discuss issues, in confidence, with senior industry figures.
Recognising that the existing scheme boards will effectively disappear at N2, it was always the intention that, in the longer term, the Liaison Group would take over the function of providing the ombudsmen with a body with which to discuss what may broadly be described as strategic issues.
The Liaison Group evolved – and has developed – on a rather organic basis. In particular, there are no terms of reference, no specific criteria for membership, no channel to feed back to the respective trade association Councils, no real provision for secretariat, and no mechanism to elect an appropriate chair. All parties are eager to address these "democratic deficit" issues before N2.
On the assumption that some form of Liaison Group should continue (and the trade associations think it should) the challenge is to establish a body (or bodies) to pick up:
In addition, a re-born Liaison Group would be the obvious forum in which to discuss the Financial Ombudsman Service’s annual budget consultation – before each trade association takes it to Council.
The ombudsmen feel it would be useful to have a forum in which to float topics that may be covered in ombudsman news as well as to have some input to the various briefings the Financial Ombudsman Service issues.
One possible future model is for a re-born Liaison Group to pick up both strategic and practitioner issues. Experience suggests, however, that it is not sensible to attempt to mix policy issues with operational issues of the ‘nuts and bolts’ variety.
As an alternative, the current money-laundering model provides a useful benchmark, although that structure may be subject to change post-N2.
The Joint Money Laundering Steering Group, composed of the trade associations and chaired on a rotational basis by a Director General/Chief Executive Office of one of them, concentrates on strategy/policy issues. It also produces its own Guidance Notes. The Money Laundering Advisory Panel is pitched at the level of practitioners and concentrates on more "nuts and bolts" issues.
The money-laundering model would translate quite easily into the Financial Ombudsman Service arena, and is the preferred option of the three trade associations. In effect we would end up with the Liaison Group operating as a high level body to discuss strategic policy issues. Operational issues would be dealt with via a new "Practitioners Panel". Members of the two bodies would be drawn from the membership of the three trade associations on as fair a basis as possible.
The trade associations intend to draft a common paper for all three Councils, setting out in detail the proposed "modus operandi" of the re-born Liaison Group and the Practitioners Panel. But, in order to do so, we require your input and views.
Once the paper has been to all three trade association councils, it would be the intention for the new groups to meet (for the first time post-N2) in December 2001.
The authors of this article would welcome your feedback. If you
would like to have a say in what happens, please send any
comments, by Friday 31 August 2001, to: