Complaint handling procedures of the Financial Ombudsman Service

Part

DISP Dispute Resolution: Complaints

Chapter

Complaint handling procedures of the Financial Ombudsman Service

Printed on: 26/11/2024

Rulebook at: 06/04/2011

DISP 3

Complaint handling procedures of the Financial Ombudsman Service

DISP 3.1

Purpose, interpretation and application

06/04/2008

Purpose

DISP 3.1.1

The purpose of this chapter is to set out:

(1) the procedures of the Financial Ombudsman Service for investigating and determining complaints;

(2) the basis on which the Ombudsman makes decisions; and

(3) the awards which the Ombudsman can make.

06/04/2008

Interpretation

DISP 3.1.2

In this chapter, 'out of jurisdiction' means outside the Compulsory Jurisdiction, the Consumer Credit Jurisdiction and the Voluntary Jurisdiction in accordance with DISP 2.

06/04/2008

DISP 3.1.3

Where the respondent is a partnership (or former partnership), it is sufficient for the Ombudsman to communicate with one partner (or former partner).

06/04/2008

DISP 3.1.4

The Ombudsman Transitional Order requires the Financial Ombudsman Service to complete the handling of relevant existing complaints, in a significant number of respects, in accordance with the requirements of the relevant former scheme rather than in accordance with the requirements of this chapter.

06/04/2008

Application

DISP 3.1.5

This chapter applies to the Ombudsman and to respondents.

06/04/2008

DISP 3.2

Jurisdiction

06/04/2008

DISP 3.2.1

The Ombudsman will have regard to whether a complaint is out of jurisdiction.

06/04/2008

DISP 3.2.2

Unless the respondent has already had eight weeks to consider the complaint or issued a final response, the Ombudsman will refer the complaint to the respondent.

06/04/2008

DISP 3.2.3

Where the respondent alleges that the complaint is out of jurisdiction, the Ombudsman will give both parties an opportunity to make representations before he decides.

06/04/2008

DISP 3.2.4

Where the Ombudsman considers that the complaint may be out of jurisdiction, he will give the complainant an opportunity to make representations before he decides.

06/04/2008

DISP 3.2.5

Where the Ombudsman then decides that the complaint is out of jurisdiction, he will give reasons for that decision to the complainant and inform the respondent.

06/04/2008

DISP 3.2.6

Where the Ombudsman then decides that the complaint is not out of jurisdiction, he will inform the complainant and give reasons for that decision to the respondent.

06/04/2008

DISP 3.3

Dismissal without consideration of the merits and test cases

06/04/2008

DISP 3.3.1

Where the Ombudsman considers that the complaint may be one which should be dismissed without consideration of the merits, he will give the complainant an opportunity to make representations before he decides.

06/04/2008

DISP 3.3.2

Where the Ombudsman then decides that the complaint should be dismissed without consideration of the merits, he will give reasons to the complainant for that decision and inform the respondent.

06/04/2008

DISP 3.3.3

Under the Ombudsman Transitional Order and the Mortgage and General Insurance Complaints Transitional Order, where the Ombudsman is dealing with a relevant complaint, he must take into account whether an equivalent complaint would have been dismissed without consideration of its merits under the former scheme in question, as it had effect immediately before the relevant transitional order came into effect.

06/04/2008

Grounds for dismissal

DISP 3.3.4

The Ombudsman may dismiss a complaint without considering its merits if he considers that:

(1) the complainant has not suffered (or is unlikely to suffer) financial loss, material distress or material inconvenience; or

(2) the complaint is frivolous or vexatious; or

(3) the complaint clearly does not have any reasonable prospect of success; or

(4) the respondent has already made an offer of compensation (or a goodwill payment) which is:

(a) fair and reasonable in relation to the circumstances alleged by the complainant; and

(b) still open for acceptance; or

(5) the respondent has reviewed the subject matter of the complaint in accordance with:

(a) the regulatory standards for the review of such transactions prevailing at the time of the review; or

(b) the terms of a scheme order under section 404 of the Act (Schemes for reviewing past business); or

(c) any formal regulatory requirement, standard or guidance published by the FSA or other regulator in respect of that type of complaint;

(including, if appropriate, making an offer of redress to the complainant), unless he considers that they did not address the particular circumstances of the case; or

(6) the subject matter of the complaint has previously been considered or excluded under the Financial Ombudsman Service, or a former scheme (unless material new evidence which the Ombudsman considers likely to affect the outcome has subsequently become available to the complainant); or

(7) the subject matter of the complaint has been dealt with, or is being dealt with, by a comparable independent complaints scheme or dispute-resolution process; or

(8) the subject matter of the complaint has been the subject of court proceedings where there has been a decision on the merits; or

(9) the subject matter of the complaint is the subject of current court proceedings, unless proceedings are stayed or sisted (by agreement of all parties, or order of the court) in order that the matter may be considered under the Financial Ombudsman Service; or

(10) it would be more suitable for the subject matter of the complaint to be dealt with by a court, arbitration or another complaints scheme; or

(11) it is a complaint about the legitimate exercise of a respondent's commercial judgment; or

(12) it is a complaint about employment matters from an employee or employees of a respondent; or

(13) it is a complaint about investment performance; or

(14) it is a complaint about a respondent's decision when exercising a discretion under a will or private trust; or

(15) it is a complaint about a respondent's failure to consult beneficiaries before exercising a discretion under a will or private trust, where there is no legal obligation to consult; or

(16) it is a complaint which:

(a) involves (or might involve) more than one eligible complainant; and

(b) has been referred without the consent of the other complainant or complainants;

and the Ombudsman considers that it would be inappropriate to deal with the complaint without that consent; or

(16A) it is a complaint about a pure landlord and tenant issue arising out of a regulated sale and rent back agreement; or

(17) there are other compelling reasons why it is inappropriate for the complaint to be dealt with under the Financial Ombudsman Service.

01/07/2009

Test cases

DISP 3.3.5

The Ombudsman may dismiss a complaint without considering its merits, so that a court may consider it as a test case, if:

(1) before he has made a determination, he has received in writing from the respondent:

(a) a detailed statement of how and why, in the respondent's opinion, the complaint raises an important or novel point of law with significant consequences; and

(b) an undertaking in favour of the complainant that, if the complainant or the respondent commences court proceedings against the other in respect of the complaint in any court in the United Kingdom within six months of the complaint being dismissed, the respondent will: pay the complainant's reasonable costs and disbursements (to be assessed if not agreed on an indemnity basis) in connection with the proceedings at first instance and any subsequent appeal proceedings brought by the respondent; and make interim payments on account of such costs if and to the extent that it appears reasonable to do so; and

(2) the Ombudsman considers that the complaint:

(a) raises an important or novel point of law, which has important consequences; and

(b) would more suitably be dealt with by a court as a test case.

06/04/2008

DISP 3.3.6

Factors the Ombudsman may take into account in considering whether to dismiss a complaint so that it may be the subject of a test case in court include (but are not limited to):

(1) whether the point of law is central to the outcome of the dispute;

(2) how important or novel the point of law is in the context of the dispute;

(3) the significance of the consequences of the dispute for the business of the respondent (or respondents in that sector) or for its (or their) customers;

(4) the amount at stake in the dispute;

(5) the remedies that a court could impose;

(6) any representations made by the respondent or the complainant; and

(7) the stage already reached in consideration of the dispute.

06/04/2008

DISP 3.4

Referring a complaint to another complaints scheme

06/04/2008

DISP 3.4.1

The Ombudsman may refer a complaint to another complaints scheme where:

(1) he considers that it would be more suitable for the matter to be determined by that scheme; and

(2) the complainant consents to the referral.

06/04/2008

DISP 3.5

Resolution of complaints by the Ombudsman

06/04/2008

DISP 3.5.1

The Ombudsman will attempt to resolve complaints at the earliest possible stage and by whatever means appear to him to be most appropriate, including mediation or investigation.

06/04/2008

DISP 3.5.2

The Ombudsman may inform the complainant that it might be appropriate to complain against some other respondent.

06/04/2008

DISP 3.5.3

Where two or more complaints from one complainant relate to connected circumstances, the Ombudsman may investigate them together, but will issue separate provisional assessments and determinations in respect of each respondent.

06/04/2008

DISP 3.5.4

If the Ombudsman decides that an investigation is necessary, he will then:

(1) ensure both parties have been given an opportunity of making representations;

(2) send both parties a provisional assessment, setting out his reasons and a time limit within which either party must respond; and

(3) if either party indicates disagreement with the provisional assessment within that time limit, proceed to determination.

06/04/2008

Hearings

DISP 3.5.5

If the Ombudsman considers that the complaint can be fairly determined without convening a hearing, he will determine the complaint. If not, he will invite the parties to take part in a hearing. A hearing may be held by any means which the Ombudsman considers appropriate in the circumstances, including by telephone. No hearing will be held after the Ombudsman has determined the complaint.

06/04/2008

DISP 3.5.6

A party who wishes to request a hearing must do so in writing, setting out:

(1) the issues he wishes to raise; and

(2) (if appropriate) any reasons why he considers the hearing should be in private;

so that the Ombudsman may consider whether:

(3) the issues are material;

(4) a hearing should take place; and

(5) any hearing should be held in public or private.

06/04/2008

DISP 3.5.7

In deciding whether there should be a hearing and, if so, whether it should be in public or private, the Ombudsman will have regard to the provisions of the European Convention on Human Rights.

06/04/2008

Evidence

DISP 3.5.8

The Ombudsman may give directions as to:

(1) the issues on which evidence is required;

(2) the extent to which evidence should be oral or written; and

(3) the way in which evidence should be presented.

06/04/2008

DISP 3.5.9

The Ombudsman may:

(1) exclude evidence that would otherwise be admissible in a court or include evidence that would not be admissible in a court;

(2) accept information in confidence (so that only an edited version, summary or description is disclosed to the other party) where he considers it appropriate;

(3) reach a decision on the basis of what has been supplied and take account of the failure by a party to provide information requested; and

(4) dismiss a complaint if a complainant fails to supply requested information.

06/04/2008

DISP 3.5.10

Evidence which the Ombudsman may accept in confidence includes confidential evidence about third parties and security information.

06/04/2008

DISP 3.5.11

The Ombudsman has the power to require a party to provide evidence. Failure to comply with the request can be dealt with by the court.

06/04/2008

DISP 3.5.12

The Ombudsman may take into account evidence from third parties, including (but not limited to) the FSA , other regulators, experts in industry matters and experts in consumer matters.

06/04/2008

Procedural time limits

DISP 3.5.13

The Ombudsman may fix (and extend) time limits for any aspect of the consideration of a complaint by the Financial Ombudsman Service.

06/04/2008

DISP 3.5.14

If a respondent fails to comply with a time limit, the Ombudsman may:

(1) proceed with consideration of the complaint; and

(2) include provision for any material distress or material inconvenience caused by that failure in any award which he decides to make.

06/04/2008

DISP 3.5.15

If a complainant fails to comply with a time limit, the Ombudsman may:

(1) proceed with consideration of the complaint; or

(2) dismiss the complaint.

06/04/2008

DISP 3.6

Determination by the Ombudsman

06/04/2008

Fair and reasonable

DISP 3.6.1

The Ombudsman will determine a complaint by reference to what is, in his opinion, fair and reasonable in all the circumstances of the case.

06/04/2008

DISP 3.6.2

Section 228 of the Act sets the 'fair and reasonable' test for the Compulsory Jurisdiction and the Consumer Credit Jurisdiction and DISP 3.6.1 R extends it to the Voluntary Jurisdiction.

06/04/2008

DISP 3.6.3

Where a complainant makes complaints against more than one respondent in respect of connected circumstances, the Ombudsman may determine that the respondents must contribute towards the overall award in the proportion that the Ombudsman considers appropriate.

06/04/2008

DISP 3.6.4

In considering what is fair and reasonable in all the circumstances of the case, the Ombudsman will take into account:

(1) relevant:

(a) law and regulations;

(b) regulators' rules, guidance and standards;

(2) (where appropriate) what he considers to have been good industry practice at the relevant time.

06/04/2008

DISP 3.6.5

Where the Ombudsman is determining what is fair and reasonable in all the circumstances of a relevant new complaint or a relevant transitional complaint, the Ombudsman Transitional Order and the Mortgage and General Insurance Complaints Transitional Order require him to take into account what determination the former Ombudsman might have been expected to reach in relation to an equivalent complaint dealt with under the former scheme in question immediately before the relevant transitional order came into effect.

06/04/2008

The Ombudsman's determination

DISP 3.6.6

When the Ombudsman has determined a complaint:

(1) the Ombudsman will give both parties a signed written statement of the determination, giving the reasons for it;

(2) the statement will require the complainant to notify the Ombudsman in writing, before the date specified in the statement, whether he accepts or rejects the determination;

(3) if the complainant notifies the Ombudsman that he accepts the determination within that time limit, it is final and binding on both parties;

(4) if the complainant does not notify the Ombudsman that he accepts the determination within that time limit, the complainant will be treated as having rejected the determination, and neither party will be bound by it; and

(5) the Ombudsman will notify the respondent of the outcome.

06/04/2008

DISP 3.7

Awards by the Ombudsman

06/04/2008

DISP 3.7.1

Where a complaint is determined in favour of the complainant, the Ombudsman's determination may include one or more of the following:

(1) a money award against the respondent; or

(2) an interest award against the respondent; or

(3) a costs award against the respondent; or

(4) a direction to the respondent.

06/04/2008

Money awards

DISP 3.7.2

A money award may be such amount as the Ombudsman considers to be fair compensation for one or more of the following:

(1) financial loss (including consequential or prospective loss); or

(2) pain and suffering; or

(3) damage to reputation; or

(4) distress or inconvenience;

whether or not a court would award compensation.

06/04/2008

DISP 3.7.3

Where the Ombudsman is determining what amount (if any) constitutes fair compensation as a money award in relation to a relevant new complaint or a relevant transitional complaint, the Ombudsman Transitional Order and the Mortgages and General Insurance Complaints Transitional Order require him to take into account what amount (if any) might have been expected to be awarded by way of compensation in relation to an equivalent complaint dealt with under the former scheme in question immediately before the relevant transitional order came into effect.

06/04/2008

DISP 3.7.4

The maximum money award which the Ombudsman may make is £100,000.

06/04/2008

DISP 3.7.5

For the purpose of calculating the maximum money award, the following are excluded:

(1) any interest awarded on the amount payable under a money award;

(2) any costs awarded; and

(3) any interest awarded on costs.

06/04/2008

DISP 3.7.6

If the Ombudsman considers that fair compensation requires payment of a larger amount, he may recommend that the respondent pays the complainant the balance.

06/04/2008

DISP 3.7.7

The Ombudsman will maintain a register of each money award.

06/04/2008

Interest awards

DISP 3.7.8

An interest award may provide for the amount payable under the money award to bear interest at a rate and as from a date specified in the award.

06/04/2008

Costs awards

DISP 3.7.9

A costs award may:

(1) be such amount as the Ombudsman considers to be fair, to cover some or all of the costs which were reasonably incurred by the complainant in respect of the complaint; and

(2) include interest on that amount at a rate and as from a date specified in the award.

06/04/2008

DISP 3.7.10

In most cases complainants should not need to have professional advisers to bring complaints to the Financial Ombudsman Service, so awards of costs are unlikely to be common.

06/04/2008

Directions

DISP 3.7.11

A direction may require the respondent to take such steps in relation to the complainant as the Ombudsman considers just and appropriate (whether or not a court could order those steps to be taken).

06/04/2008

Complying with awards and settlements

DISP 3.7.12

A respondent must comply promptly with:

(1) any award or direction made by the Ombudsman; and

(2) any settlement which it agrees at an earlier stage of the procedures.

06/04/2008

DISP 3.7.13

Under the Act, a complainant can enforce through the courts a money award registered by the Ombudsman or a direction made by the Ombudsman.

06/04/2008

DISP 3.8

Dealing with information

06/04/2008

DISP 3.8.1

In dealing with information received in relation to the consideration of a complaint, the Financial Ombudsman Service will have regard to the parties' rights of privacy.

06/04/2008

DISP 3.8.2B

This does not prevent the Ombudsman disclosing information:

(1) to the extent that he is required or authorised to do so by law; or

(2) to the parties to the complaint; or

(3) in his determination; or

(4) at a hearing in connection with the complaint.

06/04/2008

DISP 3.8.3

So long as he has regard to the parties' rights of privacy, the Ombudsman may disclose information to the FSA or any other body exercising regulatory or statutory functions for the purpose of assisting that body or the Financial Ombudsman Service to discharge its functions.

06/04/2008

DISP 3.9

Delegation of the Ombudsman's powers

06/04/2008

DISP 3.9.1A

The Ombudsman may designate members of the staff of FOS Ltd to exercise any of the powers of the Ombudsman relating to the consideration of a complaint apart from the powers to:

(1) determine a complaint; or

(2) authorise the disclosure of information to the FSA or any other body exercising regulatory or statutory functions.

06/04/2008

DISP 3.9.2

In DISP 2 to DISP 4 any reference to "the Ombudsman" includes a reference to any member of the staff of FOS Ltd to whom the exercise of any of the powers of the Ombudsman has been delegated.

06/04/2008