Ebbs and flows: Select Committee explores changing role of Housing Ombudsman, including use of informal resolution

In a pre-appointment hearing on 16 December 2014, the Communities and Local Government Select Committee questioned the preferred candidate for the role of Housing Ombudsman, a vacancy that opened up when the former ombudsman retired in October.

The recruitment process itself was unusual. There was a very short timetable (six weeks from advertisements to preferred candidate being identified). The Select Committee had not been involved in previous appointments but asked to hold a pre-appointment hearing in this case, citing its similar role with the Local Government Ombudsman. And the post is clearly a temporary one whose future is tied up with the Gordon review of the Parliamentary Ombudsman and the public services ombudsmen for England, announced by Oliver Letwin in July. All those aspects are of interest in themselves.

We’re interested particularly in the mentions of informal resolution that were made at the hearing. The candidate, Denise Fowler, is a civil servant, solicitor and former housing adviser. She has experience of working with the Housing Ombudsman, and she mentioned in her responses changes in the way the ombudsman approaches informal resolution. Our research on informal resolution found that the process changes she mentions were significant and not just a matter of terminology.

An extract of the session transcript is below, with commentary from our research findings:

Q22    Mark Pawsey: You told us that you worked at the Housing Ombudsman before, and that was 2000 to 2002, I think. Is that right?

Denise Fowler: Yes.

Mark Pawsey: That is 12 years ago now.

Denise Fowler: Yes.

Q23    Mark Pawsey: Regarding what you know about the Housing Ombudsman now, how is it different from what it was when you were there before?

Denise Fowler: What it looks like is that they have done a lot of work to move towards early resolution of complaints and real-time resolution of complaints.  From what I can see on the website, 87% of complaints are now resolved informally, which seems amazing.

Q24    Mark Pawsey: What would it have been previously?

Denise Fowler: I do not know what the exact figures were when I was there in 2000 to 2002.

Q25    Mark Pawsey: Was it significantly less than that?

Denise Fowler: Significantly less than that. We had an evaluation team that used to seek to try to work with landlords while issues were still going through the complaints procedure and try to resolve things earlier, and we had a procedure that had an informal and a formal determination, but it was a different procedure. That is one of the big changes.

[Commentary: Our research found that in 2013-14 the vast majority of complaints (5,004 out of 6,582 enquiries received) were closed by what the ombudsman calls ‘local resolution’. The change Fowler notes appears to reflect a significant change in process, with a number of complaints referred back for resolution between tenant and landlord. The ombudsman told us, in our research, “We will focus on helping the parties to reach resolution themselves through the available local procedures (primarily the landlord’s internal complaints procedures and also the designated persons).”

This contrasts with the scheme’s previous role in providing informal resolution itself. In the late 1990s, the Housing Ombudsman was perhaps the most innovative among ombudsmen in its use of informal resolution, or appropriate dispute resolution (ADR); a third of its complaints were either settled or rejected, but of the rest, it closed 20% of cases by informal conciliation, 25% by mediation, 6% by arbitration and 15% by binding decision.

With the implementation of the Localism Act 2011, the Housing Ombudsman changed the way complainants can access the scheme, envisioning a more active role in informal resolution by MPs, councilors and tenant panels. In practice, the Housing Ombudsman told us, “Our intervention will enable the parties to talk to each other to find a solution they can both accept. By being conciliatory and inquisitorial in our approach we can help bring about a better and longer-lasting solution to the problem and can help preserve the ongoing relationship between landlords and tenants. We will help the parties to reach a consensus or acceptable agreement which reflects the best possible outcome for all involved.”]

Q34    Chair: What about transparency?

Denise Fowler: That is exactly what I think should be happening. That is what I said about having that data and publishing it.

Q35    Chair: And publishing the results of investigations as well?

Denise Fowler: Yes. The results of investigations are done anonymously at the moment, aren’t they? There is an argument certainly if we get into formal investigations. There is an argument about informal resolution that it is helpful, to encourage informal resolution, to keep those anonymous, but in terms of the formal resolution, I think there is an argument for making those public.

Q36    Chair: One of the things that came up with the Local Government Ombudsman was that, where things were done informally and there were precedents that came out of a resolution, if it was simply not published in any form, that could not be used as a precedent in other cases.  Most people would not know about it.  Is there not an issue here to be looked at as well?

Denise Fowler: I think that is different from naming names.

[Commentary: Lack of transparency of informally resolved complaints has been a long-standing focus of criticism – for example, as noted by the Chair of this session, the CLG Select Committee noted concerns [http://www.publications.parliament.uk/pa/cm201213/cmselect/cmcomloc/431/43102.htm] about the Local Government Ombudsman’s use of mediation and informal resolution and stated: “the Commission needs to be completely clear how the distinct processes operate and differ as well as the criteria against which complaints are allocated to these resolution processes.”

Academics have also raised concerns about transparency of informal resolution by ombuds – for example, Richard Kirkham and Philip Wells in “The Ombudsman, Tribunals and Administrative Justice Section: Evolving standards in the complaints branch”.

Responding to the Law Commission’s 2010 consultation on Public Services Ombudsmen, Advice Services Alliance (ASA) said that the use of alternatives to investigation may reduce the transparency of the public services ombudsmen’s work. ASA conceded that such enhanced powers would be welcome if they delivered fair outcomes for complainants more promptly and suggested two key principles: transparency of outcomes and the right for a complainant to request an investigation.

On its website, the Housing Ombudsman publishes case studies, including those of informally resolved complaints.]

Following the pre-appointment hearing, on 18 December, the Select Committee endorsed Ms Fowler as candidate for the role. They did so on the basis that she retire from the civil service rather than take a career break, because of the need for the Housing Ombudsman to be – and to be seen to be – independent of central government. The committee’s report and minutes of the hearing are available here.


Research into Models of Alternative Dispute Resolution

by Carolyn Hirst

Last week the Legal Ombudsman for England and Wales published a report of research commissioned from Queen Margaret University (QMU). The QMU research team (Chris Gill, Carol Brennan, Jane Williams and Carolyn Hirst) had been asked to investigate what the Legal Ombudsman could learn from other ADR providers in relation to developing its own model of dispute resolution.

The research involved a case study design and fieldwork was conducted with ten organisations: four in the UK (HMCTS Small Claims Mediation Service, Furniture Ombudsman, UK European Consumer Centre and PhonePayplus), one in Ireland (Financial Services Ombudsman), two in New Zealand (Banking Ombudsman and the Law Society’s Lawyers Complaint Service’s Early Resolution Service), one in Australia (Financial Ombudsman Service), one in Canada (Ontario Ombudsman) and one in the USA (ebay/PayPal).

What the research highlighted was the wide range of dispute resolution practices in use. It also illustrated some of the key design choices that ADR providers needed to make in relation to a dispute resolution scheme. These design choices fell within four areas: the use of online dispute resolution; the early stages of dispute resolution processes; mediation approaches; and the later stages of dispute resolution and building influence.

The report concludes by offering a model for ADR design, which sets out some key issues to be considered. It suggests these could be used as a ‘design kit’ for the creation or review of ADR processes. This design model has ten spectra, such as the funding mechanism of the scheme, the use of technology and the preferred type of settlement, along which an ADR scheme could decide to position itself. The report concludes that the particular context into which an ADR scheme is to fit will be crucially important in informing such choices.

The author is a co-researcher on the study of The use of informal resolution approaches by ombudsmen in the UK and Ireland .

‘Friendly solutions’ – new report notes pros and cons of informal resolution

Putting It Right? – How EU institutions respond to European Ombudsman (Nov 2014) is a new report focusing on cases in which the institutions complained about (European Union bodies, offices and agencies) have accepted the Ombud’s proposals and learned from past mistakes.

The report includes information on the range of possible outcomes of complaints considered by the Ombud and the responses by the body complained about. The range of outcomes, shown below, describes an escalation from consensual to the most critical and directive:

  • cases settled by institution
  • friendly solution proposed by the Ombud
  • draft recommendations
  • critical remark
  • further remarks

The report notes that although friendly solutions can provide good outcomes for complainants, they are not effective at achieving systemic change:

“The main way the Ombudsman tries to achieve redress for the complainant is by proposing a ‘friendly solution’[6]. [footnote: 6 Such proposals are based on Article 3(5) of the Statute, which provides that “As far as possible, the Ombudsman shall seek a solution with the institution or body concerned to eliminate the instance of maladministration and satisfy the complaint.”] Such a proposal aims at a win-win outcome that satisfies both the institution and the complainant.

While friendly solution proposals may include a provisional finding of maladministration, the Ombudsman often considers it more constructive to avoid stating, even provisionally, that there could be maladministration. Rather, she identifies a problem or shortcoming in the institution’s behaviour that could be solved if the institution adopted the proposed friendly solution.

Where redress should be provided, it is best if the institution concerned takes the initiative, when it receives the complaint, to acknowledge the problem and offer suitable redress. This could take the form of compensation to the complainant or a sincere apology.

Whilst friendly solution proposals often achieve good outcomes for the complainant, they are rarely an effective instrument to achieve systemic change in the public interest.”

An institution can choose to reject a proposed friendly solution. In 2013, only 9 friendly solutions were accepted. There are, however, incentives to accept – the next stage of a complaint is a draft recommendation, and these are published:

“If the institution rejects a friendly solution proposal without good reason, or such a proposal is unlikely to be effective, the next step is usually what Article 3(6) of the Statute terms a ‘draft recommendation’. It is better for all concerned if the institution accepts a friendly solution than if it first rejects a friendly solution proposal and then accepts a draft recommendation. Draft recommendations addressed to the institutions are, simultaneously, published on the Ombudsman’s website. The Ombudsman may also choose to draw public attention to the case and to her efforts to obtain a solution, by issuing a press release at this stage on the maladministration identified. With a view to avoiding such publicity, institutions should seriously consider the added benefit, for their own work and for the image of the Union more generally, of accepting a friendly solution proposal rather than waiting for the Ombudsman to make a draft recommendation.”

The next stage for complaints which are investigated but where no friendly solution or recommendations are accepted is a ‘critical remark’. The report notes that “a critical remark does not constitute redress for the complainant. In many cases, a better outcome would have been for the institution concerned to settle the matter itself by acknowledging the maladministration and offering suitable redress.”

But the report also notes that complainants are not always right, “and the institution concerned is entitled to defend its position. About half of the cases that are not settled by the institution at an early stage eventually give rise to a finding of no maladministration.”

The Annex to the report gives examples of complaints closed by friendly solutions that were accepted by the EU institution.