This piece was originally posted on the blog of the UK Administrative Justice Institute on 22 May 2015 and is republished here with permission.
There was a very good turnout for our workshops on research at the Ombudsman Association annual conference in Loughborough last week.
The opening plenary session of the conference suggested that research would be a recurring theme throughout the conference. Dr David Halpern of the Behavioural Insights Team discussed the way organisations can influence behaviour through small changes (the wording of letters, for example) to lead to better decision-making. He discussed evidence suggesting people want feedback, the ability to share experiences, and closure. They also want human contact. He urged ombuds to consider experimenting and running controlled trials of different methods and approaches to iterate and refine how complaints are handled.
Dr Naomi Creutzfeldt (Centre for Socio-Legal Studies at the University of Oxford) discussed her ESRC-funded comparative research on users’ trust of and perceptions of ombudsman, surveying complainants who have used 14 consumer ombudsman schemes across Europe. She is testing…
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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.
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 .
A fairly uncontroversial definition of an ombudsman is “An official appointed to investigate individuals’ complaints against a company or organisation, especially a public authority”.
But is an ombudsman’s primary activity to investigate? How do ombudsmen and other complaint-handling bodies actually deal with the cases brought to them, and what proportion are subject to investigation as opposed to some other form of case closure?
In our research we are trying to identify to what extent investigation (arguably the original key task of ombudsmen) is being replaced by other approaches, most notably those that fall under the term appropriate dispute resolution, or ADR. As part of this work, we’ve taken a look back in time.
The use of ADR by ombudsmen was set out in 2011 by the Law Commission in its report on the public services ombudsmen:
“5.7 By alternative dispute resolution we mean using mechanisms other than formal investigations to dispose of complaint. This happens already, and the ombudsmen have developed sophisticated mechanisms allowing them to encourage ‘local settlement’, or similar, of complaint.
5.8 In the majority of cases the appropriate mechanism for alternative dispute resolution is that an ombudsman informs the public body of the complaint made to the ombudsman and encourages the public body to resolve the matter. In other situations recourse to mechanisms such as mediation may be appropriate.”
The current climate in which we are conducting this research is an interesting one. Ombudsmen and other complaint-handling bodies are being put under the spotlight by recent Parliamentary Select Committee inquiries and by developments in consumer redress such as the EU ADR Directive. Recent reports including The Future of Ombudsmen and Benchmarking the Legal Ombudsman have flagged up the increased use of informal approaches to complaint handling. We’ve been struck, while carrying out the research, at the way this spotlight is exposing issues that have in fact been lurking for some time.
Looking back over the past 20 years, we can see that informal approaches have been a feature of ombuds practice for some time. In 1997, the then National Consumer Council published a directory of ombudsmen with a summary of each scheme’s complaint-handling processes. Then:
- The Funeral Ombudsman (now defunct) closed 90% of its cases through a process it called ‘informal conciliation’.
- The Ombudsman for Estate Agents closed 14% by what it called ‘mediation’.
- The Insurance Bureau (one of the schemes later amalgamated into the Financial Ombudsman Service) recorded 77% of cases resolved by ‘case-handler mediation’.
- The Local Government Ombudsman closed nearly a quarter of its cases through ‘local settlement’.
- Both the Northern Ireland Ombudsman and the Ombudsman for the Republic of Ireland closed 90% of its cases ‘informally’, with only 3% going to investigation.
- The Housing Ombudsman was perhaps the most innovative; 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.
- In 2002, the Financial Ombudsman Service resolved 85% of complaints by mediating and recommending settlements – without needing to use formal ombudsman powers to make binding decisions. This is similar to the figure given to us in our current research – 90%.
But it seems the use of informal resolution hasn’t been so much a steady increase as an ebbing and flowing. For the Parliamentary Ombudsman, for example, the percentage of informally resolved complaints has gone from 0% in 1997 (when the NCC directory was published) to more than 30% in 1999-00. Two years later, this had increased to nearly 40%. Fourteen years on, the pendulum has swung yet again. Giving evidence to the Public Affairs Select Committee enquiry this year, the Parliamentary Ombudsman explained that its focus would be on more investigations; it reported, in response to our research, that it anticipates informally resolving only 3-4%.
In principle, informal resolution fits well with the appropriate dispute resolution agenda. This is because informal resolution starts with the premise of what the particular complainant wants to achieve, not what a generic or hypothetical complainant is entitled to or might reasonably expect from a judicial ruling.
The use of ADR processes in practice raises some concerns, however, especially in relation to how and when they are used in the context of ombuds and complaint handlers. Does an informally resolved complaint simply amount to a ‘recommendation without investigation’? Are informal outcomes published? Who ‘owns’ the complaint and who determines that it is satisfactorily resolved – the ombudsman or the parties to the complaint? Who decides whether a complaint is to be resolved informally rather than investigated, and what could this mean for complaints that might be in the public interest to investigate?
These are the questions we want to explore in the discussions we hope to have after publishing our report.
‘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.