In a response to the FSA's CP 04/12 on the ombudsman service, the LIA has suggested that these annual reports could draw attention both to areas of concern and also to areas where industry performance is satisfactory or above average.
John Ellis, the LIA's public affairs director, says: “In this way, a balanced view could be presented of each sector on an annual basis which would provide the opportunity for wider comment and leadership by those who wish to adopt a constructive approach to industry problem solving.”
The LIA is also supporting the idea of a special panel of industry and consumer members to discuss market issues and contribute to overall judgements.
The Association is, however, opposed to an appeal mechanism for the FOS, believing that it would add cost to the system, but little benefit. Bearing in mind the few cases which get as far as an Ombudsman determination – 8% of 97,901 cases referred to the Ombudsman in 2003
– the downside of the added cost, borne by the industry and the consumer, would outweigh any benefits.
Ellis adds: “We believe that the drive for appeals is backed by a small number of individuals in the marketplace. Considering, as stated above, that a relatively small proportion of Ombudsman cases are eventually determined by the Ombudsman and the small number where adverse findings against firms are made – 2600 of the 8000 in 2003 – there would not seem to be a large problem.”
The LIA is also opposed to the use of legal test cases, as it believes that the focus on fine technical detail would mean that broad precedents would be unlikely to be set. The letter says it is doubtful whether the courts would have sufficient knowledge to provide a better view than that which could be obtained through the liaison arrangements discussed.”
The LIA, however, does support greater publicity and explanation of the wider implications machinery, in which some FOS cases can be taken over by the FSA, if it is felt that the complaint points to a wider industry issue that ought to be explored.