The Parliamentary Ombudsman’s Office lobbied parliament changing the rules in 2020 to prohibit any further private sector dispute resolution bodies from being called ‘ombudsman.’ Having Mary Holm as one of its five directors, private sector financial dispute resolution service Financial Services Complaints Ltd subsequently survived a seven year legal battle to use the title ombudsman.
The law change was triggered by Financial Services 2015 application to use the label ‘ombudsman’ for its retail dispute resolution service. A Banking Ombudsman Scheme and an Insurance and Savings Ombudsman Scheme were rival private sector services already in operation.
Copied from Sweden, the parliamentary ombudsman is a public official acting as a peoples’ representative, empowered to investigate use and misuse of government power. It took offence at private sector organisations using a similar moniker as a brand to attract custom. The parliamentary ombudsman had been receiving some 25 enquiries a month from confused retail investors; their complaints should have been sent for investigation to private sector providers such as the Banking or the Savings ombudsman.
As far back as 2011, Financial Services Complaints Ltd had contacted the then Chief Ombudsman pointing out the competitive advantage private sector businesses were gaining through use of the word ‘ombudsman.’ Either they should be prohibited from using the term, or all providers should be allowed to join in, it said. This was at a time when consent of the Chief Ombudsman was need for private sector businesses to use the word in their name.
In 2015, Financial Services formally requested approval to rebrand as an ombudsman-titled service. Seven years and multiple court cases later, the Court of Appeal ruled in its favour. In successive court cases, judges criticised Chief Ombudsman refusals for use of the name: one case ruling the Ombudsman was being overly protective of the title; a second that the Ombudsman had not properly considered Financial Services application. A 2021 Court of Appeal ruling forced an independent re-assessment of Financial Services’ application. The 2020 law change prohibiting private sector use of the title specifically kept alive Financial Services then current application.
Financial Services appealed the requirement for an independent re-assessment. This was independent in name only, it said. The decision would still lie with someone appointed by the Chief Ombudsman; a person who would receive a background briefing from the Chief Ombudsman. Any adverse outcome would inevitably be challenged by Financial Services, the Court of Appeal said. The court directed the Chief Ombudsman to allow Financial Services use of the ombudsman name for its dispute resolution scheme.
Financial Services Complaints Ltd v. Chief Ombudsman – Court of Appeal (15.06.22)
22.103