Being ‘ombidextrous’: revisiting questions from our mapping study of the use of informal resolution approaches by ombudsPosted: May 21, 2017
In advance of the next biannual conference of the Ombudsman Association (on 25-26 May 2017, at Loughborough University), we thought it would be worth republishing our conclusions from our mapping study of informal resolution approaches used by ombuds. We conducted this mapping research in 2014, and no doubt practices and approaches have moved on since then for many of the organisations in our study. The issues, however, remain as pertinent as ever, and as unresolved.
By Varda Bondy, Margaret Doyle and Carolyn Hirst
Conclusions and discussion points
Ombuds are themselves a type of informal resolution mechanism when seen in the context of ADR, being alternatives to judicial determination in court or tribunals, as pointed out by several of those responding to the survey. This study explored the informal processes that make up part of the overall ombud complaint-handling work. These are primarily the processes that do not involve investigation, adjudication and determination, the ombud’s traditional role. For some respondents this presented some confusion, used as they are to describing their overall process and approach as ‘informal’.
This was a scoping project designed to produce a descriptive mapping study, identifying the schemes that use informal resolution and those that do not, the reasons for doing so and the nature of those processes. Where possible, figures are provided in respect of various aspects of practice, but these need to be read as illustrative of models and trends rather than as a definitive representation of each individual scheme; even during the relatively short duration of the project in the first half of 2014 there were changes in the membership of the Ombudsman Association, new annual reports were published, and some schemes were in the process of changing their informal resolution processes.
The focus of this report is naturally on the 36 of 48 participating schemes that use some form of informal process, but in order to understand the nature of this aspect, it is necessary also to investigate the schemes that do not. In respect of some such schemes, for example those of a regulatory nature, it may appear obvious at first blush that informal resolution is inappropriate. Yet bodies of similar functions presented a variety of different approaches.
The main themes to emerge from this survey are:
It is apparent that some of the common terms used by ombuds mean different things, and conversely, similar terms are used to describe quite different processes. For example, does ‘mediation’ mean a full process conducted by a qualified mediator, or a settlement brokered by way of shuttle negotiations by a case officer on the basis of their assessment of what is a fair or expedient outcome? We came across both of these understandings of mediation.
We also found that mediation was not necessarily synonymous with early or even informal resolution. In at least one scheme, mediation takes place only after an investigation has been carried out and the complaint upheld. Similarly, one scheme refers to ‘conciliation’ as the informal part of the process, whereas another describes it as a formal process.
Does terminology matter? We think it does. The proliferation of terminology, at times contradictory, can be confusing for complainants as well as to complaint handlers as the terms used can also impact on how they exercise their function.
It is possible that consistent use of dispute resolution terms can lead to better matching of complaint to process, resulting in better outcomes – a point made by the National Alternative Dispute Resolution Advisory Council of Australia (NADRAC). NADRAC also suggests that common terminology contributes to consistent and comparable standards and provides a basis for programme development, data collection and evaluation. Carrying out any comparative analysis of ombuds and complaint handlers is difficult when, as we have found, they each report using different terminology and different understandings of the same terms.
What principles guide investigators in deciding whether to use informal resolution? What criteria, if any, are applied? We established that only a minority of schemes have some form of written criteria setting out when informal resolution can be used, and of these, only three are published and available in the public domain. Guidelines adopted informally by schemes include numerous references to case handlers’ judgements based on experience or knowledge, but little of what might be considered criteria.
On the whole, it appears that this is often a matter for individual caseworkers to decide. Is it a matter of, as one former ombud has said, ‘Like the elephant or the rhinoceros, you know one when you see one.’?
In addition to the difficulties of navigating the terminology applied, arriving at a common understanding of the machinations of specific process terms (mediation, conciliation, etc.) proved problematic. In other words, it was hard to tell what happens in practice. We believe that the majority of schemes employ shuttle negotiations by telephone and in writing, but only a handful of participants described the process in detail.
Publication of outcomes
Transparency and accountability are principles that all ombuds subscribe to. Indeed, the vast majority of schemes publish annual reports containing a variety of aspects of their work. Invariably, these include figures about the volume of complaints received and how they are addressed and concluded. However, there are nearly as many ways of presenting those (and other) facts as there are schemes, with the result that meaningful comparisons are almost impossible.
Discussion points and further research
This report is intended to raise questions for discussion and to identify areas for further research. Below are key discussion points arising from the study, as well as suggestions for issues arising from the study that require further research.
Describing, not defining
Should we move away from the problems of terminology and instead of defining the processes used by ombudsmen and other complaint handlers, should we attempt to describe them? This is the approach of the NADRAC and of the EU ADR Directive. Both identify three types of ADR process: for NADRAC, these are advisory, facilitative, and determinative; for the ADR Directive, they are advisory, proposing, and imposing. Into these three fall the specific ADR process terms such as mediation, conciliation, early neutral evaluation, adjudication, arbitration, etc.
It may well be, as NADRAC believes, that it is impossible, and indeed inappropriate, to prescribe how such descriptions should be used by ADR providers. However, it seems sensible to require at the very least (and NADRAC supports this) that ‘descriptions of the actual process used by any provider should be available in forms that are easily understood by the users of the service’.
In 2010, the Office of Fair Trading, in a summary guide to dispute resolution systems for consumer redress in the United Kingdom, stated that:
‘A useful distinction can be drawn between procedures in which a neutral third party proposes or makes a decision (ombudsmen, adjudicators, arbitrators) and those where the neutral party seeks to bring the parties together and assist them in finding an agreement by common consent (conciliation, mediation). Which of the above procedures is most appropriate will depend on the nature of the dispute to be resolved.’
Such a distinction suggests a binary framework – the procedure is either one in which a decision is proposed or imposed by the scheme or one in which the parties reach an agreement by consent. It is a familiar framework. Applying it to ombud procedures, however, presents some difficulties as it does not reflect the actual practice of most ombuds, most of whom appear to be practising what the Administrative Justice and Tribunals Council, in its 2012 report ‘Putting It Right’, defined as
‘an independent person assessing the claims made by each side and giving an opinion on a) the likely outcome in court or tribunal [or, it could be added, likely ombudsman decision], b) a fair outcome, and/or c) a technical legal point. It is non-binding, and the parties decide how to use the opinion.’
Consensual agreements are different in an ombud context than they are in other areas, such as civil mediation generally. In this context, consensual agreements are not only of interest to the parties involved in the complaint, but potentially have wider significance. They are not made in a vacuum but in the ‘shadow’ of the ombud’s authority.
Ombuds have a place in the wider ADR sphere, but perhaps as an ADR process in itself (‘ombudsing’?) alongside mediation, conciliation, arbitration, etc. Unless we understand a process of ‘ombudsing’ as a distinct and defined process to sit alongside mediation and arbitration, for example, we have a confusing lack of clarity about what it is that ombuds are actually offering process-wise. What is missing, and appears to be needed, is a classification of the processes used by ombuds and their complaint-handling cousins.
Suggested framework of processes used by ombuds
In 2011 the Law Commission identified three ways in which ombuds dispose of complaints: ADR, investigation and report, and dismissal. The latter ties in with one of the ‘resolution’ methods identified by some respondents to our mapping survey: rejection of the complaint. However, for the Law Commission ‘ADR’ included, in the majority of cases, the ombud informing the public body of the complaint made and encouraging the public body to resolve the matter. This might be described as a ‘referral back’.
In our mapping survey, we have identified a further ‘resolution’ process used by ombuds and complaint-handlers: advice to the complainant, possibly including signposting to another organisation.
It is possible to set out, in the ombud context, a spectrum of ‘resolution responses’ being used:
- referral back
- advice and signposting
- bringing the parties together to facilitate an agreement by consent
- hearing from the parties and proposing a solution
- investigating and making (imposing?) a determination
Given the important role that ombuds have in improving service provision and complaint handling by the bodies they investigate, one could add, on the top and bottom of the above list, prevention and lesson learning.
But once a complaint has been accepted and is being looked at by the scheme, what are the key processes used to ‘resolve’ them? They appear to fall under the three broad headings in the final bullet points of the list above:
- bringing the parties together (process) to facilitate an agreement by consent (outcome)
- hearing from the parties and negotiating (process) and proposing a solution (outcome)
- investigating (process) and making, or imposing, a decision (outcome)
This echoes both the NADRAC descriptions and those in the EU ADR Directive.
Training and skill set required
A question for ombuds and complaint-handling schemes is whether caseworkers have the appropriate skills needed if they want to increase the number of complaints resolved through informal processes and improve the quality of the process. The use of quicker and less formal methods of complaint determination, in addition to the more traditional method of adjudication, is broadening the skills set that complaint handlers need to possess. And different skill sets need to be valued by the organisation as a whole:
‘Getting our managers to think more about coaching and shifting that behaviour away from the legalistic kind of checking… and that has an impact on our board as well because it means that our board would need to recognise behaviours that normally they don’t see… the organisation would… in the past… probably value people with that… legalistic bent whereas in the future the real value comes from people who are good at talking and fixing things and that’s quite a change.”’
What skill set is needed for a resolution focus, and is it different from that needed for investigation and determination? If so, what specific training might be needed to ensure a consistent approach to informal resolution?
Is it desirable, and possible, to develop agreed best practice (in process, training, data recording)?
An earlier study of ombuds’ use of ADR concluded with a number of suggested principles – including clarity about the processes, transparency about the criteria for using different processes, and informed consent by the parties – and suggested actions, including staff training and assessment and evaluation of outcomes achieved through informal resolution processes. Is it time to revive interest in the development of best practice guidance?
Is informal resolution a necessary form of filtering in an age of austerity?
To some extent, is informal resolution is a form of ‘filtering’ – identified in a recent report as ‘a major part of the work of complaint handlers’? Filtering can involve any or all of the functions of resolving, signposting (directing a complaint to an alternative appropriate route of redress) and rejecting.
Is informal resolution a sign of failure?
Two schemes that have a low rate of informal resolution, and one scheme that is said not to be using informal resolution at all, told us that a low rate reflects good complaint handling practice on part of body complained against. Conversely, a high rate of informal resolution by ombuds suggests a failure in the system, in that complaints capable of being resolved informally should be resolved at an earlier stage. Is this an indication of a mood change among ombuds in their attitude to informal resolution?
Does greater use of informal resolution pose a threat to ‘justice’?
Can it be said that the methods of informal resolution of complaints provide the information that ombuds need in order to fulfil their role in promoting service standards, first-tier decision-making and good administration? And for ombuds dealing with private-sector providers and services, does informal resolution put them at risk of being assembly lines of mass case processing, a sort of ‘Complaints ‘R Us’?
This mapping study has shined a light on the informal processes used by ombuds and other complaint handlers in the UK and Ireland. It is a limited light, and there is more to learn and study.
First, we have noted that many organisations with a significant role in complaints handling – whether as part of administrative justice or consumer redress – were not included in this mapping survey. Broadening out the mapping work to include these other relevant organisations would be helpful.
Although we have focused on the ombuds community, we are sensitive to the overlaps between ombuds and other routes to redress for complainants. There is much opportunity to share learning between courts, tribunals and ombuds, for example. It would be useful to explore the extent to which ombudsmen might adopt the ‘mapping’ factors for identifying the appropriate dispute resolution route for tribunal claims.
Specific aspects covered in this research require closer examination, including:
Process: There is a need for in-depth research on how the process actually works and to identify the appropriate realistic methodology for studying the journey of a complaint from initial acceptance, through resolution and outcome.
Outcomes: How is ‘success’ defined in informal resolution context? We have examined the use of informal resolution, but its success is an area for further exploration. There is also a need to examine the views held by users of ombud services (both complainants and those in the departments and organisations that are the subject of complaints).
Criteria: For many schemes, informal resolution appears to be the default approach to complaint handling, with a move to investigation if the complaint did not resolve at this stage of the process or if there was some reason to investigate. On reflection, a more informative and potentially productive question to have asked in our survey would been ‘What are your criteria for deciding whether or not a complaint needs to be investigated?’
Timescales/speed: This survey did not ask specifically about timescales of informal resolution processes, but what we were told was intriguing and worth further study. Only a handful schemes told us they have a timescale (time limit) for attempts to informally resolve a complaint (ranging from one hour to one day mediations, to ten working days).
Classification of disputes
One further question arising is whether some processes are more suitable for some types of complaint, and whether there is scope to developing classifications that can be used across the range of schemes. There is also a need to explore whether the same category of complaint is dealt with differently by ombuds in different jurisdictions. Such classification could help in developing guidance on what disputes and complaints, and in what circumstances, are best suited to particular resolution approaches.
In the ombud context this differs from guidance on the suitability of mediation and other forms of ADR because ombuds have a wider, authoritative role. They are not simply dispute resolvers but have the additional (and some would say more important) responsibility to influence good practice by bodies in jurisdiction. They do this through their determinations as well as through their ‘good offices’ – persuasion, guidance, and feedback.
The classification of disputes may be needed in order to identify a comprehensive approach for influencing how cases should be allocated to a route to redress – what forum for which fuss. This might involve categories of complaints – e.g. fundamental rights cases, in which adjudication is necessary, and, at the other extreme, ‘cases where the claimed entitlements could not themselves satisfy the claimants and where the interests of all parties might be better served by a negotiated resolution’. Endorsing the view that a proportionate and appropriate system must involve a range of dispute resolution techniques, the AJTC identified a number of principles and mapping factors to help identify the suitability of a specific dispute resolution process, such as early neutral evaluation, mediation, and traditional hearing.
These are only some of the aspects considered in this report. Our aim has been to present a nuanced snapshot of the ethos and practices of informal resolution by ombuds at the time of conducting the research. We hope this will further the understanding of current issues and research needs in this field, and lead to greater consistency in the use of terminology and processes in future.
 This is the final section of our report ‘The use of informal resolution approaches by ombudsmen in the UK and Ireland: A mapping study’, which was funded by the Nuffield Foundation and supported by the University of Essex and De Montfort University. We have republished it here unchanged aside from replacing ‘ombudsman/men’ with ‘ombud/s’ when used in a generic sense.
 National Alternative Dispute Resolution Advisory Council (2003) ‘Dispute resolution terms: The use of terms in (alternative) dispute resolution’ (Canberra: National Alternative Dispute Resolution Advisory Council): 1.
 Jefferies, R (2001) “A review of mediation”, The Ombudsman, Issue 15 (March).
 See, for example, National Alternative Dispute Resolution Advisory Council (2000) ‘The development of standards for ADR: Discussion paper’ (Canberra: Legislative Services, Commonwealth of Australia): 6.
 National Alternative Dispute Resolution Advisory Council (2000).
 Office of Fair Trading (2010), ‘Mapping UK consumer redress: A summary guide to dispute resolution systems’, OFT1267 (May).
 Gill, C, Williams, J, Brennan, C and O’Brien, N (2013) ‘The future of ombudsman schemes: drivers for change and strategic responses’, a report for the Legal Ombudsman (Edinburgh: Queen Margaret University).
 Doyle, M (2003) ‘The use of ADR in ombudsman processes: Results of a survey of members of the British and Irish Ombudsman Association’, (London: Advice Services Alliance).
 Bondy, V and Le Sueur, A (2012) ‘Designing redress: a study about grievances against public bodies’ (London: Public Law Project): 55.
 Administrative Justice and Tribunals Council (2012) ‘Putting it right – A strategic approach to resolving administrative disputes’ (London: AJTC): 36–37.
 Richardson, G and Genn, H (2007) ‘Tribunals in transition: Resolution or adjudication?’ Public Law 2007, pp.116-141: 141.
 Administrative Justice and Tribunals Council (2012) ‘Putting it right – A strategic approach to resolving administrative disputes’ (London: AJTC).
About the authors:
Varda Bondy, Margaret Doyle and Carolyn Hirst are the co-authors of ‘The use of informal resolution approaches by ombudsmen in the UK and Ireland: A mapping study’, which was funded by the Nuffield Foundation. More information about the project and the team is available at http://www.ombudsresearch.org.uk, where there is also a blog covering aspects of research on ombuds and complaint handlers.
“’Ah, what is it, now?’ the Unicorn cried eagerly. ‘You’ll never guess! I couldn’t.’ The Lion looked at Alice wearily. ‘Are you animal — or vegetable — or mineral?’ he said, yawning at every other word. ‘It’s a fabulous monster!’ the Unicorn cried out before Alice could reply.”
Our colleague on the ombudsresearch team, Carolyn Hirst, gave the keynote address at the 2016 conference of the Australian and New Zealand Ombudsman Association (ANZOA) in May. Her address, which is available here, explores the context in which ombuds in the UK are changing and the challenges these changes present. She traces the evolution of UK ombuds and gives a clear overview of the stages of development. She also considers the contributions made by recent research on ombudsry, including work she and colleagues at Queen Margaret University have carried out, work by Naomi Creutzfeldt and Chris Gill on online ‘ombuds-watchers’, and our team’s mapping work on informal resolution by ombuds. She notes the impact of recent developments such as the EU ADR Directive, which is not only ‘resulting in procedural change for ombud schemes here but is having an influence across the UK redress landscape by impacting on existing models of redress and encouraging new and often rival ADR providers to emerge’.
A self-described ‘pracademic’ (practitioner and academic), Hirst is honestly reflective about her concerns about the state of ombuds now and going forward:
“A question which has been bothering me for a while is whether the purpose of an Ombuds is to determine disputes by way of adjudication or to resolve conflicts by enabling parties to come to a consensual agreement? Or is it both? For me, this goes to the core of what it is that an Ombuds does. And I think that associated with this are the increasing tensions for Ombuds between the concepts of right, fair, just, and reasonable.”
Citing work by our colleague Nick O’Brien to retain the democractic accountability role of ombuds in the face of rushing consumerism, Hirst notes the tension between the ‘micro’ and ‘macro’ functions of ombuds: “‘Micro-justice’ or individual redress can work well, but Ombuds also need to consider the needs of ‘macro-justice’ and the interests of citizens who are not party to the individual dispute, but who may be affected by the matter complained about.”
Hirst is an impassioned supporter of the ombud institution, and in her critiques she plays the role of critical friend: “I think that the fabulous creatures which are Ombudsmen can be one model with many applications, as long as there is both clarity and confidence about who they are and what they stand for.”
“So where do we want to go? I think that one of the biggest challenges ahead for UK Ombuds is to decide what they want to be. And in doing this they need to be out, loud and proud in clarifying their place and role as a distinctive and integral part of the dispute resolution landscape.”
We have seen this past week the publication of two significant markers in the move towards reform of the ombudsman landscape. Both highlight the difficulties faced by a ‘system’ of redress that has developed in an ad hoc way. Both take account of the increased consumerisation of redress, in public- and private-sector disputes. Both attempt, in their own way, to bring about greater harmonisation of the system and to improve access, consistency and accountability. They take very different approaches to such attempts, however: one, to set a relatively low baseline of standards which which redress providers must comply, and thus encourage a multitude of competing providers; the other, to merge existing redress providers into a single scheme, with enhanced powers and remit.
On 17 March, the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations were laid before Parliament. These regulations are the first step towards implementation of the EU ADR Directive, which requires member states to ensure that independent ADR is available for disputes over goods and services. They set out the requirements for ADR providers and the bodies (competent authorities) that will approve them. The Department for Business explains that that the regulations will ‘overlay an existing landscape of disparate provision of alternative dispute resolution’.
‘Disparate’ is perhaps a kind way to describe the landscape. In spite of calls for greater harmonisation, the motley range of ADR provision will remain, in some cases providers competing with each other for customers (businesses) and sharing only compliance with the minimum requirements which with providers must comply.
Although they are minimum requirements, there is something positive in the fact that information requirements will apply to all approved providers. Schedule 3 sets out the requirements that competent authorities must be satisfied that an ADR provider meets before they can be approved. The requirements for transparency (16 of them) are listed under section 5 and require that an ADR provider must state on its website a range of information about how it works, including its procedural rules and the principles the ADR provider applies, and the main considerations it takes into account when seeking to resolve a dispute. That’s helpful, although the level of detail of such information is left open.
Then today we have the long-awaited Cabinet Office consultation on the reform of public services ombudsmen in England. This sets out a number of high-level questions about the overall premise, leaving the detail to a later stage. The questions relate to the underlying principles of the proposed reforms; which services to include; what sector-specific expertise to retain, and what management structure; mechanisms and routes of access for complainants; and investigative powers. The deadline for responses to the consultation is 16 June 2015.
The consultation takes forward the proposals of the Gordon Review, which in its report completed last year but only published today, recommended creating a new Public Service Ombudsman (PSO), bringing together the existing jurisdictions of the Parliamentary and Health Service Ombudsman (PHSO), Local Government Ombudsman (LGO) and Housing Ombudsman (HO). Gordon proposed bringing into the remit of a single Public services ombudsman other public services that aren’t currently subject to an ombudsman’s oversight. Because of the complexity of the way public services are now contracted, paid for and provided, Gordon also recommended ‘following the public pound’ and including within the ombudsman’s jurisdiction arm’s length bodies and private-sector providers who either receive public funds or are contracted by government to deliver public services.
From the perspective of the research we carried out on informal resolution by ombudsmen, it is interesting to note that Gordon highlights as one of the improvements to come about with the integration of the public services ombudsmen is greater harmonisation of published information about complaints and outcomes. The Review report states, in para 140:
“In response to the Law Commission’s report, the public service ombudsmen in England accepted the need for greater harmonisation of practice around the way that details about complaints and ombudsmen conclusions are published and shared. The emphasis in the Law Commission’s report was rightly placed on how transparency around ombudsman decisions can be increased – and this was subsequently picked up by PASC in the context of how it might be possible to increase the public visibility of the ombudsman brand. Transparency in this area is also a key means by which the PSO can drive its own internal standards, building and demonstrating the quality of investigations and building a sense of autonomy and responsibility amongst staff within the organisation.”
Transparency and accountability are principles that all ombudsmen subscribe to. Indeed, the vast majority of schemes that we surveyed in our research on informal resolution publish annual reports containing a variety of aspects of their work. Invariably, these include figures about the volume of complaints received and how they are addressed and concluded. However, there are nearly as many ways of presenting those (and other) facts as there are schemes, with the result that meaningful comparisons are almost impossible.
We also found in our survey that transparency was a likely casualty of increased informality. Although formal decisions (or determinations or rulings) are often made public, complaints resolved informally are not. The majority of schemes we surveyed publish some information on informally resolved complaints – most commonly in the form of anonymised selected case summaries. Some, however, publish only statistics, and some publish nothing at all, including one scheme using informal resolution in 90% of its complaints.
If only decisions are published, and these become the minority method of closing complaints, there is less opportunity for ombudsmen to give feedback and to set standards for good complaints handling for the bodies in their jurisdiction. It also makes it difficult for complainants, and those complained about, to assess a proposed resolution against decided outcomes.
We will have to wait to see whether these two roads to reform are in fact heading in opposite directions.
We know a bit about what ombudsmen and other complaint-handlers think about using informal resolution approaches. In our mapping study, The use of informal resolution approaches by ombudsmen in the UK and Ireland, we asked ombudsmen why they use informal resolution. The answers tended to fall into one of two camps: because they are required or expected to do so by statute, or because it is simpler and quicker. The latter responses included acknowledging that speed can be a benefit for parties as well as for the ombudsman. Some also mentioned the added benefit of informal resolution helping to maintain or rebuild relationships between the complainant and the complained-about.
For the most part, however, views of what parties themselves think about the processes ombudsmen use to handle their complaints are conjecture or are gleaned from customer satisfaction research, complaints feedback, and other sources that have some limitations in terms of self-selection of samples and how robust the findings are.
A closer look: legal complaints
An interesting view of how informal resolution can benefit complainants and complained about in different ways appears in the Annual Report published yesterday by the Legal Ombudsman (LeO). The report states:
“We prefer to resolve complaints by brokering an agreement between the lawyer and the complainant. Therefore, our investigators attempt to settle complaints as amicably as they can, while bringing both parties (both the lawyer and the client) to a swift and mutually beneficial resolution. We call this “informal resolution”.
Where an informal resolution cannot be reached, either party may ask an ombudsman to make a final decision. At this stage the resolution will be based less on resolving the complaint amicably and more on what is deemed fair and reasonable.”
LeO reports that last year it resolved 39% of complaints informally (a slight decrease from the year before). Almost the same number (38%) were resolved by ombudsman decision. (The remaining 24% were either withdrawn or dropped by the complainant or discontinued by an ombudsman.) LeO expresses its disappointment that more complaints are not resolved informally:
“This is not the outcome we had hoped for, but as we have said in previous Annual Reports, the complexity of legal complaints means that often people want to exhaust all options before accepting a decision.”
The figures suggest there are more financial remedies agreed at the informal stage (67%) than recommended by ombudsman decision (40%). Most financial remedies are less than £1,000 (30% of ombudsman decisions, and 40% of informal resolutions).
The difference between outcomes of the two processes is most marked in the remedy ranges of £1,000 to £19,999: 9% of ombudsman decisions were in this range, but 17% of informal resolutions were.
‘In our view, these figures suggest that complainants do as well when accepting an investigator’s recommendation and opt for an informal resolution as they do when insisting on an ombudsman’s decision. It may also reflect an increase in the number of lawyers offering reasonable remedies at the first tier, which, if true, is a positive development.’
Good for complainants – what of the complained-about?
But for lawyers the opposite might be true. As Legal Futures has pointed out, in the report LeO urges
‘lawyers to think twice before pushing for formal decisions rather than accepting informal resolutions to complaints, even though the figures showed that the outcome of the former was less likely to result in the lawyer having to pay the client some money.’
LeO suggests that for lawyers, the advantages of informal resolution are in saving time and avoiding reputational risks. The report states:
‘While lawyers might be tempted to hold out for an ombudsman’s decision, they should factor in the additional time and resource they will have to put into managing the complaint and accept that the customer is likely to walk away feeling even less positive about their firm with the increased risk to their reputation that this entails.’
Yet another risk to informal settlements for parties complained about has been highlighted in relation to the Financial Ombudsman Service (FOS). An article last autumn in the financial press highlighted a loophole arising from court ruling on a FOS case, relating to whether a complainant can pursue further redress against a financial firm after a FOS decision:
‘The problem lies in the word “award”, which specifically applies to final and binding orders issued by an ombudsman reviewing a case.
In order to go before an ombudsman, a Fos complaint will first be reviewed by an adjudicator which would recommend a resolution. It is only passed on if either party rejects the recommendation.‘
The article suggested that if parties agree to an informal settlement (by adjudicator recommendation), the complainant could still be free to pursue more redress in court. It advises financial advisers (those complained about) to insist on either an ombudsman decision (so getting a final award that doesn’t leave them open to being sued for more, but risking being ‘named and shamed’) or a settlement via adjudicator that makes it clear it’s in full and final settlement.
Seeking parties’ views
Our mapping study found that very few ombudsman schemes ask their users for feedback specifically about informal resolution, though one reported that its ‘customer satisfaction research consistently shows informal investigations are the most popular type of investigation’ with both parties. Service complaints from users can also provide feedback on the processes used to handle complaints. Another ombuds reported that feedback on its informal resolution processes is generally positive, although some complainants question whether it treats the respondent service provider too softly.
The lack of information is striking when, as we found, most ombudsmen use informal resolution processes, and some for as much as 80% of the complaints they handle. We note in our report of the mapping study that there are calls for greater consistency in customer satisfaction reporting among UK ombudsmen. We also note, however, that the EU ADR Directive does not appear to contain any specific requirement to introduce customer satisfaction surveys or to gather feedback on case-handling processes.
It seems clear that research is needed on what users of ombuds schemes – both complainants and complained-about – think of processes used for complaints, and the outcomes they achieve.
‘Transparency’ is a bit of a buzz word in the ombudsman world. Specifically, it features in Article 7 of the EU ADR Directive (to be implemented in the UK from summer 2015) and in the “Guide to principles of good complaint handling” of the Ombudsman Association. More generally, it is one of the characteristics cited frequently in the promotion of the ombudsman ‘brand’. But do ombudsmen walk the walk or just talk the talk when it comes to transparency?
In our research on the way ombudsmen use informal resolution, we are coming up against an odd sort of transparency. The organisations we’ve surveyed have been very generous in responding to us – that in itself is a form of transparency. Most, if not all, publish information on their work. The actual meaning of that information, however, is often quite opaque.
We noted in our last progress report that ombudsmen and other complaint handlers don’t use the same terminology to describe the complaints they receive and how they process them. We’re also finding that they don’t report on outcomes in the same way – something that the authors of The Ombudsman Enterprise identified when they stated that official statistics published by ombudsmen “have to be examined with care”. They note that changing methodologies and definitions “can make comparisons from one year to the next and between schemes problematic”. ‘Problematic’ is putting it rather mildly. Trying to make sense of reported statistics requires examining in detail the context behind the figures we’ve been given, something that isn’t within the scope of our current project but which requires further research.
‘Harmonisation’ is another buzz word. A recent essay on “Harmonising the Ombudsman Landscape” argues that redress providers under the EU ADR Directive should be modeled on ombudsmen as a way to promote the brand in the eyes of consumers, in part because of the level of transparency:
“The competent authority, alongside the Ombudsman Association, should work with ADR bodies to align the practice and processes that they use. For best possible effect, this should be done with the core model of an ombudsman scheme in mind: for the transparency of process it affords; for the simplification of the landscape; for the benefit of justice for the consumer; for the uniformity of decision; and for the benefits the gathered data can provide to regulation, government, and the consumer.” [p.4]
There are many assumptions here – that ombudsman processes are transparent, that they deliver justice, that decisions are or could be made uniform. These assumptions need further interrogation, something highlighted at a conference on ADR and ombudsman held in Oxford in April this year. The conference organisers concluded in a policy brief that ombudsmen will need to work toward greater harmonisation of processes, terminology, and standards in order to become an essential part of the justice system.
The EU ADR Directive and transparency
The issue of transparency takes on some urgency in light of the impending implementation of the EU ADR Directive. In Article 7(2), the Directive states that all ADR providers shall make their activity reports publicly available, and these should include, among other statistics:
(a) the number of disputes received
(c) the rate of disputes the ADR entity has refused to deal with and the percentage share of the types of grounds for such refusal …
(d) …the percentage shares of solutions proposed or imposed in favour of the consumer and in favour of the trader, and of disputes resolved by an amicable solution
(e) the percentage share of ADR procedures which were discontinued and, if known, the reasons for their discontinuation
(f) the average time taken to resolve disputes
(g) the rate of compliance, if known, with the outcomes of the ADR procedures…
Let’s take a) above as an example. The number of complaints received is reported in a number of different ways currently. Some schemes report all contacts or enquiries, and then break this down into a further category of accepted or eligible complaints. Not every enquiry is a complaint.
Figure c) above refers to those complaints that are out of jurisdiction, late, premature, or otherwise not within scope. Subtracting the figure in c) from that in a) should give you the figure of accepted or eligible complaints.
But it isn’t that simple, because in this space between ‘received’ and ‘resolved’ we have more than only those complaints the scheme has refused to deal with. We also have ones (according to our survey responses) where advice is given or where a complaint might be in scope but can be remedied with a ‘quick fix’. We have some that may or may not be in scope but might be amenable to resolution with the ombudsman’s intervention. And we have those that are accepted as eligible but not dealt with by one of the three categories of process set out in the directive: a solution, proposed, imposed, or agreed between the parties. Where, for example, a case handler identifies that a suitable remedy has been offered and declines to progress the complaint, is this a proposed solution or a rejection? Confusingly, we have found that this is sometimes categorised as a ‘resolution’.
When we move on the requirements to provide a rate or percentage, we need to know which figure is being used as the starting point. For instance, is the percentage of complaints ‘resolved by amicable solution’ referring to the percentage of all complaints received (a) or is it the percentage of all accepted or eligible complaints (c)? We are finding a range of approaches to this question, making it difficult to make comparisons or draw meaningful conclusions.
Why does it matter?
In a recent essay on evolving standards in ombudsmanry, Richard Kirkham and Philip Wells examine issues of due process and fairness in ombudsmen decision-making, which are linked to openness and transparency:
“The uncertainty surrounding decision-making in the sector is made more marked by the trend over time towards resolving complaints at the pre-report stage, often by way of a letter rather than a formally completed report (Buck et al., 2011 , Ch. 4). The outcomes of such early redress have often not been published. … But the strength of the connections between the benefits to be gained from transparency and the perceived weaknesses in the complaint-handling operation do provide strong grounds for believing that more openness about the decision-making process of complaint-handlers could significantly improve confidence in complaint-handling schemes.” [p.196].
In a 2010 consultation paper on public services ombudsmen, the Law Commission originally proposed that the ombudsmen should harmonise their reporting terminology and all publish reasons for decisions not to investigate specific complaints. This was considered to be overly onerous and was opposed by the public services ombudsmen, and the Law Commission altered its recommendation. It still argued for greater transparency to allow complainants to understand the handling of their complaints, but it stepped back from recommending that the terminology of the reports issued by each ombudsmen should be harmonised.
Does transparency require standardisation? Does harmonisation mean uniformity? And how do harmonisation and transparency fit with flexibility? The call for greater consistency among ombudsmen in the processes they use (for example, in the Harmonisation essay cited above) could be read as a call for a single informal resolution process to be adopted among ombudsmen. This would be an interesting point for us to reflect on as we take this research forward and discuss it with practitioners and policy makers in the ombudsman world.