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ombudsman news

issue 19

August 2002

casehandling - the investigation teams

In the last banking & loans edition of ombudsman news (March 2002) we looked at the work done by the banking & loans assessment team, and examined how the caseworkers in that team approach their work. This time, and to complete the picture, we turn the spotlight on the investigation teams looking into banking & loans complaints.

where do the investigation teams "fit in"-

As we explained in the March 2002 edition, about three quarters of the cases that come to the banking & loans division are resolved by the caseworkers in the assessment team. Those cases are generally either mediated or subject to early termination. However, some cases cannot be settled at the assessment stage - for example where mediation will not work because:

  • there is a dispute about what actually happened;
  • the parties are just too far apart; or
  • their positions have become firmly entrenched.

And sometimes, of course, our mediation attempts fail. There are also some cases where we can tell that we're not going to reach an early settlement - no matter what we do.

who works in the investigation teams-

Our investigation teams each comprise a small group of adjudicators. The teams are headed by casework managers - in some instances, helped by assistant casework managers. Some of our adjudicators have a legal background - either as law graduates or as fully-fledged solicitors or barristers. Before joining the Financial Ombudsman Service they may have worked in private legal practice or for agencies such as the Crown Prosecution Service. Other adjudicators have worked in the financial services industry, or as regulators or members of the Civil Service. And several of our adjudicators are part-time - combining their work at the Financial Ombudsman Service with complementary careers. For example, one of our longest-serving adjudicators is also a chairman of Social Security appeal tribunals.

what do the investigation teams do-

Because our emphasis is very much on settling as many cases as possible before they get to the investigation stage, the cases that do get this far are usually the most complex ones, involving the thickest files. So the papers that make up these complaints often require a great deal of close study and the sifting of a large volume of evidence.

Generally speaking, the adjudicators settle cases by issuing:

  • an initial view; or
  • an adjudication.

The complaints that are not settled by either of these routes end up being passed to an ombudsman for a final decision.

initial view

Even after cases have reached the investigation teams, there can still be opportunities to resolve cases in a less formal way.

Sometimes, the adjudicator may feel that there is little that any further investigation will add to the situation, and that the main problem is stubbornness on the part of one or both of the parties in not accepting what we have already told them. Or the adjudicator may think that if only a little more information were available, it might still be possible to settle the case without the need for an investigation. In such instances, once the adjudicator has asked one or two finely-focused questions - or gathered any further details that might just make a difference - he or she will write an initial view of how the complaint should best be resolved.

Essentially, this is a "short-form" adjudication, written (to begin with, at least) just to the party who needs "persuading" - either the consumer or the firm. We often find that, even if the adjudicator is not really saying anything different from what both parties have been told already, the parties will by now have a more realistic view of the situation and will agree to settle, rather than opting to drag things out further.


But where this does not happen, or if the adjudicator feels that a complaint needs to be fully investigated before a proper conclusion can be reached on it, then we proceed to a full investigation. This can be a lengthy and rigorous process for all concerned. Investigations are inquisitorial, with adjudicators asking searching questions of both parties and testing the evidence carefully before coming to a reasoned conclusion and issuing an adjudication.

This will outline the background to the complaint, covering the relevant arguments of the opposing parties and explaining why the adjudicator has reached a particular conclusion. If the adjudicator recommends the payment of compensation, then that - too - will be clearly explained. Over half our adjudications recommend some form of payment - although this sometimes involves our telling the firm to repeat an offer it made at a much earlier stage (perhaps even one that was on the table when it issued its final response letter, before the complaint ever reached us).

ombudsman's final decision

But some consumers - and some firms - find they are not prepared to accept the adjudicator's views, whether expressed through an initial view or by adjudication. If so, they can appeal to have the case reviewed by an ombudsman. Currently, one party or the other does this in about a third of the cases that reach adjudication. However, if an appeal is made against an adjudicator's initial view, the complaint will pass directly to an ombudsman for a final decision. We do not issue adjudications as an interim stage for such cases. If a case gets as far as an ombudsman, then the ombudsman will review all the papers. He or she will take particular note of any fresh evidence or arguments that either party has put forward after receiving the initial view or adjudication. If the ombudsman comes to broadly the same conclusions as the adjudicator, then the ombudsman will go straight to issuing a final decision. But if the ombudsman comes to a materially different view, he or she may sometimes decide to issue a provisional decision. This gives the parties a specified period in which to make any final submissions before the ombudsman issues a final decision.

Contrary to apparent belief in some quarters, this review process is a very real one - ombudsmen certainly don't just "rubber stamp" what has gone before. If the consumer accepts the final decision before the date specified - usually a month after it is issued - then the final decision becomes binding on the firm. But if the consumer rejects the ombudsman's final decision, or does not accept it before the specified date, then the final decision lapses. But either way, a final decision brings our complaint-handling process to an end.

what's the caseload like-

Inevitably, it comprises a broad cross-section of the complaints we receive - ranging from cases about a single issue to those involving a series of complex issues that have arisen over an extended period of time. Business banking complaints, for example, often fall into the second category.

Between them, our adjudicators have a great deal of specialist knowledge and experience. So, for example, an adjudicator who is particularly knowledgeable about insolvency and bankruptcy will generally deal with cases that centre on the financial failure of a business. And of course there is a very strong culture of sharing experience among all the teams, which helps staff to further develop their expertise.

At the time of writing, the investigation teams are - between them - looking into more than 1,000 cases.

how firms can help

As we have stressed, we always look for opportunities to resolve complaints as early as possible in the process. It's important for firms to understand this. If, for example, something comes to light during an adjudicator's enquiries that makes the adjudicator think the complaint should be settled sooner rather than later, then doing that saves time and has to be best for everyone. It's not always necessary to wait until we have issued the adjudication.

In the course of our investigations we are particularly dependent on the cooperation of firms, especially when the adjudicators ask for information. We try to keep our requests for information down to a reasonable minimum. And indeed, if a firm has considered the complaint properly before allowing it to reach us, then it should already have most information readily to hand. Yet there can frequently be surprisingly long delays when we ask for papers that - to us - appear central to the dispute.

Our technical advice desk will be happy to answer any general questions that firms may have about the investigation and final decision process.
phone: 020 7964 1400 or email.

but what's life like as an adjudicator-

Nicola Stowe has been an adjudicator for about two years. She says that the ombudsman service attracted her because there's a real sense of being able to do something for the public good. That's very important to her.

After what she describes as a "mid-life career change" she qualified as a solicitor and joined the ombudsman service from the Crown Prosecution Service. Before that Nicola had spent 12 years or so as a casehandler in a variety of different organisations, including the Health Services Ombudsman's office.

She organises her week so as to set aside quiet time, to concentrate on things that are difficult or complex. That means making other times more flexible so that she can deal with anything urgent that might crop up.

A key task is the initial study of new cases she has received. After that, she might spend a fair amount of time on the phone - talking to the parties about those cases that could be settled straight away. That often means asking firms to pay compensation.

Most firms are amenable to this. But some can be reluctant. They should not be - because she will have assessed the case carefully before phoning them, and any settlement proposal will have been carefully thought through.

For other cases - where it's pretty obvious, even at first reading, that they'll have to go the "whole way" - a different approach is needed. She works out what additional information she needs, and asks the customer or firm as appropriate.

There's a very strong culture of sharing experience across the teams. So, if Nicola is unsure about some obscure point, she can ask others who are expert in that area. Others, in turn, ask her about areas where she has more experience.

That culture extends across the whole ombudsman service. Nicola is a designated "liaison" person, whom our casehandlers, dealing with complaints about investment and insurance, can consult on any banking issues that arise in those complaints.

Nicola tries to keep her initial views and adjudications crisp and clear, which means spending a fair amount of time refining them to ensure they're really focused. It's better not to go into a lot of irrelevant detail, but to concentrate on the handful of key points on which the case turns. Nicola says this makes the reasoning clearer. And it avoids some customers, and some firms, fastening on details that make no real difference to the outcome of the case. She believes that is why fewer of her cases are "appealed" to an ombudsman than average.

Walter Merricks, chief ombudsman

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.