Dispute resolution in the private sector can be an arduous process. Ombudsmen schemes exist to help achieve an acceptable resolution at the earliest possible stage.

Ombudsmen are not regulators; they are in place to solve disputes. There is no prescribed method for doing so and the ombudsman is free to use mediation, decision making or other methods of finding a solution as he or she deems appropriate. The schemes have informal and flexible processes and generally conduct a single investigation into multiple complaints about the same issue which avoids build up of costs and duplicate investigations. The active investigation of circumstances means that specialist expertise is used and lawyers for dispute resolution often favour this approach.

Ombudsmen

Originally developed for dispute resolution in circumstances where there may be the potential for a substantial imbalance of power between the claimants, these schemes exist to provide an alternative, informal option to the civil court system. However, they operate only in certain private sector areas and these include:

• Pensions Ombudsman
• Financial Ombudsman Service
• Legal Ombudsman
• Property Ombudsman
• Telecommunications industry: Communications Ombudsman
• Energy Ombudsman
• Housing Ombudsman

The ombudsman can only be approached once you have fully pursued any internal complaints process directly with the opposing party. A ‘letter of deadlock’ confirms that this has happened, no agreement has been forthcoming and that without recourse to the civil courts the only option left is to approach the ombudsman.

The Ombudsman will decide each case based on their powers at the time and what is deemed fair in relation to the individual case. Parties usually accept the decision as final because if it isn’t acted upon then they could be removed from the scheme altogether. When deciding the case, the ombudsman will use:

• good industry practice
• the applicable law
• rules and guidance from regulators
• any relevant codes of conduct

Enforcing ombudsmen decisions

Private sector ombudsmen are generally established by statute and therefore relevant sectors are obliged to take part in the scheme. This provides greater protection for consumers.

They normally have the power to make recommendations which are binding on the bodies in question within their own jurisdiction. The only exception to this is if they are successfully challenged through the courts. Ombudsmen can be approached for complaints against commercial businesses which do not have democratic accountability.

Once a decision has been reached, the ombudsman can compel the losing party to:

• explain its practices (or those complained about)
• apologise
• pay compensation
• change its working practices to avoid future issues

The decision of the ombudsman will be final and cannot be appealed against by the losing party, but consumers retain the right to challenge a decision which does not go in their favour through the court system.

Simply.Law

Contact Simply.Law member lawyers for dispute resolution online today. Select a solicitor from the list on this page and get timely, knowledgeable advice on ombudsmen schemes for your particular circumstances.