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Financial Services and
Markets Act 2000
March 2001
The Transition to the New Ombudsman Scheme and the Investigation
of Complaints against the Financial Services Authority- A Consultation
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PART
IV - APPEALS AND TEST CASES
4.1
Some of the existing schemes’ rules allow for appeals against
an ombudsman’s determination. Where such a right of appeal against
a determination by a former ombudsman before N2 exists at N2, then
it will be preserved in cases in progress at N2. We will similarly
make provision to ensure that appeals (and, where relevant, applications
for leave to appeal) against determinations by a former ombudsman
can continue to be heard after N2.
4.2
Part XVI of FSMA allows no such right of appeal against an ombudsman’s
determination. Nor does it offer scope for test cases to be brought
or for arbitration on questions of jurisdiction. This will help to
ensure that the ombudsman is able to resolve complaints quickly and
informally. Including an appeals mechanism would have meant that
complainants could not be sure that, if the Ombudsman found in their
favour, they would receive his award. They might, instead, face the
possibility of court proceedings. Allowing for test cases to be brought
as of right could have threatened the operation of the new scheme.
However, the scheme rules will empower the Ombudsman to discontinue
investigating a complaint where he considers that it would be more
suitable for the matter to be dealt with by a court.
4.3
FSMA provides other safeguards. It requires that ombudsmen have appropriate
qualifications and experience and that they be appointed by the scheme
operator on terms consistent with their independence. Ombudsmen must
set out the reasons for their decisions and parties will be able to
exercise their right to a fair and public hearing in appropriate cases.
4.4
Given the approach taken by Part XVI, we do not think it would be
appropriate, nor that it is necessary, to try to bolt on an appeals
mechanism simply for the purpose of dealing with determinations of
those relevant complaints not made before N2, nor to allow for test
cases to be brought after N2 or for references of question of jurisdiction
to arbitration to be made. Instead, the effect of the order is that
relevant complaints will be determined by an ombudsman acting within
and appointed by the scheme operator under the new legislative framework
established by FSMA.
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