Ombudsman Services response to Ofcom consultation

Transcription

1 Ombudsman Services response to Ofcom consultation Review of Alternative Dispute Resolution 29 June 2012

2 Ombudsman Services response to Ofcom s consultation: Review of Alternative Dispute Resolution Author Mark Glover Status Final Date last revised (and reason) 29 June 2012 Version number 0.6 Distribution Ofcom Purpose of the document Inform Ofcom of our views on their review Related documents Response of The Ombudsman Service Ltd (Ombudsman Services) 1. Summary 1.1 Ombudsman Services supports Ofcom s view that whatever redress scheme is approved for the communications sector, it should be accessible, independent fair and efficient. Improved accessibility to a redress service is essential both to ensure public confidence in the sector and to help drive improvements to the businesses themselves. Ombudsman Services has done a great deal over recent years to improve the accessibility of the service including a newly designed website. On-line accessibility will continue to be developed over the coming months. 1.2 We remain very concerned that a CISAS adjudicator normal practice will still not allow them to exceed the compensation that a consumer initially seeks. It remains unfair and in our view contrary to natural justice that an adjudicator who, on completing an investigation finds that a consumer has a legitimate claim but is unable to make an award because the consumer did not express a figure at the beginning of the complaint. It is Ombudsman Services view that without changes to this - so that both schemes operate on a level playing field - there remains a denial of justice, consistency between the schemes cannot be achieved and the proposed framework will be rendered meaningless. 2

3 1.3 Ombudsman Services does request all the information pertinent to the complaint but we are aware that it is not always provided. Ombudsman Services recommends that Ofcom ensures that communications providers are required to provide all the necessary information that is requested of them and that this requirement is able to be enforced through the imposition of penalties if it is found that the companies have failed to co-operate. 1.4 Ombudsman Services would strongly resist the compensation matrix being made available to the public. Our fear is that if it is made public, both sides would begin to focus on and raise concerns about the level of award rather than the substance of the complaint itself. 2. Ombudsman Service Ltd 2.1 The Ombudsman Service Ltd is a company limited by guarantee that provides ombudsman services for the energy, telecommunications and property sectors, by appointment or approval from the relevant regulators. We provide dispute resolution and redress to domestic consumers and micro businesses. 2.2 Established in 2002, Ombudsman Services now has over 8,650 participating companies. During 2011/12 we responded to 203,148 contacts and resolved over 18,000 complaints. The company employs over 170 people and has a turnover in the region of 6.4 million. 2.3 Ombudsman Services is appointed by Ofcom and Ofgem to be the redress scheme for the communications and energy sectors. In the energy sector we have recently taken on the responsibility for complaints about feed-in tariffs, in addition to our existing role providing the alternative dispute resolution scheme for both energy suppliers and networks. The redress service we provide in property developed from appointment by the Royal Institution of Chartered Surveyors, followed by approval from the UK Office of Fair Trading to provide alternative dispute resolution services for estate agents. 3

4 2.4 The service has recently been appointed as the Ombudsman and Investigation Service for the Green Deal. We are continuing to develop alternative dispute resolution for copyright licensing/collecting societies. With our sustainable funding model, independence and considerable experience we have the capacity to undertake further work. 2.5 To help level the playing field between consumers and companies, we have a contact centre which provides information and helps those who have difficulty in making a complaint. We achieve proportionality by providing alternative dispute resolution through different processes, from informal resolution to in-depth formal investigation. Our decisions are enforceable through the courts. 2.6 Our service is free to consumers and paid for by the participating companies under our jurisdiction by a combination of subscription and case fee. While we consult with the sector participants on our annual budget and business plan, the participating companies do not and should not exercise financial control over the company. Our governance ensures that we are entirely independent from the companies that fall under our jurisdiction. 2.7 Ombudsman Services welcomes the opportunity to comment on Ofcom s consultation on its Review of Alternative Dispute Resolution. 3. General response to the consultation 3.1 Ombudsman Services supports Ofcom s view that whatever redress scheme is approved for the communications sector, it should be accessible, independent, fair and efficient. Improved accessibility to a redress service is essential, both to ensure public confidence in the sector and to help drive improvements to the businesses themselves. Ombudsman Services has done a great deal over recent years to improve the accessibility of the service including a newly designed web site. On-line accessibility will continue to be developed over the coming months. 3.2 Although the number of complaints about our service is few, an Independent Assessor is an integral element of our provision for customers. Ombudsman Services therefore welcomes the fact that CISAS has confirmed that they will be reinstating its 4

5 Independent Adjudicator as the responsibility of reviewing complaints about the service does need to reside outside the management structure and therefore complies with the need for fairness. 3.3 We remain very concerned that a CISAS adjudicator normal practice will still not allow them to exceed the compensation that a consumer initially seeks. It remains unfair and in our view contrary to natural justice that an adjudicator who on completing an investigation finds that a consumer has a legitimate claim is unable to make an award because the consumer did not express a figure at the beginning of the complaint. It is Ombudsman Services view that without changes to this - so that both schemes operate on a level playing field - there remains a denial of justice, consistency between the schemes cannot be achieved and the proposed framework will be rendered meaningless. The proposals for the framework do not appear to take account of the difference between redress and good-will awards. Redress is the aim of ADR; where it is found that something has gone wrong then, wherever possible, the complainant should be put back into the position they would have been in had the failure not occurred. Goodwill awards are recommended when, in pursuing their complaint, a consumer has suffered inconvenience or stress, has received poor service or has had to devote considerable time. Larger goodwill awards are used when it is clear there has been financial loss which might be significant, but which is difficult to quantify. 3.4 Ombudsman Services notes that CISAS is consulting its members on the proposed changes to the award structure; however, Ofcom will need to provide an explanation on how it proposes to deal with a situation where CISAS member companies reject the proposed changes. This illustrates the problem faced by both schemes as providers seek to have individual contracts with their ADR providers and how independence can be easily compromised. If either scheme is reliant on individual contracts with its participating companies fresh negotiations with each will have to be undertaken if changes are proposed. The governance in place for Ombudsman Services has been developed to ensure we are independent of participating companies, who have no say in how the organisation is run; agreement to use the service is by deed poll. While proposals to harmonise the two schemes will provide more equal protection for 5

6 consumers, the fact that more than one scheme is approved will always risk the possibility to providers playing one off against the other. 3.5 We welcome the update in paragraph 3.7 of the consultation document with the information that CISAS now takes complaints over the telephone as opposed to simply providing advice and providing a complaints form. This development will also add to the consistency of approach between the two schemes. 3.6 In terms of efficiency, it is correct that Ombudsman Services is proposing to pilot a number of changes to its processes with some of our participating companies. The Customer Journey is an improvement programme that ensures that our processes are as efficient as possible whilst ensuring they continue to be independent, fair and accessible. The programme has not yet been fully implemented and we continue to work with our participating companies to ensure that efficiencies are made throughout Ombudsman Services. 3.8 It remains Ombudsman Services view that it is dangerous to suggest (as is the case in paragraphs 4.10 and 4.11) that there is bias in both schemes towards communications providers; this assertion is based on the Mott MacDonald study which looked at a small number of cases and which failed to fully appreciate the technical aspect of some of those cases and interpreted this as bias. Decisions take account of knowledge and experience of the sector and the participating company. To ignore or set aside customary practice is likely to encourage fierce resistance from communications providers, for example where they say that it is standard to warn complainants of the possibility of engineering charges. The key point of the balance of probabilities argument is that we decide what the most likely explanation is (even if we accept that it may not have happened that way). 3.9 Paragraph 4.37 of the consultation document refers to the information that the communications provider submits as part of the case. We do request all the information pertinent to the complaint but we are aware that it is not always provided. Ombudsman Services recommends that Ofcom ensures that communications providers are required to provide all the necessary information that is requested of them and that this requirement is able to be enforced through the imposition of penalties if it is found that the companies have failed to co-operate. 6

7 3.10 Ombudsman Services would strongly resist the compensation matrix described in paragraphs 4.43 being made available to the public. The fear is that if it is made public, both sides would begin to focus on and raise concerns about the level of award rather than the substance of the complaint itself. It is also essential to make sure the matrix does not fetter the independent decision making of the schemes in any way Although we support in general the Decision Guidelines contained in A1.3, Ombudsman Services does have a number of concerns. It is our role to level the playing field between the consumer and the communications provider. We do not treat both parties equally, our intention is to treat them fairly and impartially in accordance with the principles of natural justice. We suggest therefore that A1.3 (i) is reworded to reflect this point. We also suggest that in order to minimise the absence of information from the companies, Ofcom may wish to consider introducing the imposition of a penalty if participating companies fail to co-operate. 4. Specific response to the questions 4.1Below is Ombudsman Services response to the specific questions raised in the consultation. Q1. Do you agree Option 2 (Principles proposed by Ofcom) should be preferred? If not please explain your answer. Of the four options that the consultation proposes, Option 2 and the adoption of a set of Decision Making Principles appears to be the least problematic if the objective of the consultation is to try and ensure a consistent approach between the two redress schemes. However consistency of outcome also depends on consistency of ethos and approach. It is Ombudsman Services belief that Option 1 and 3 would not achieve the desired outcome given the different background of the schemes and the way each resolves complaints. The withdrawal of approval from both schemes would leave the sector without an approved redress scheme and provide no where for consumers to go with their complaints. 7

8 One important concern that Ombudsman Services has is that we may be required to transfer some or all of the intellectual property we own to CISAS. (CISAS may in turn have a similar concern). The two schemes are, after all, competitors and while both want the best possible outcome for consumers, this kind of cooperation may prove difficult. To prevent this being a concern, to help promote co-operation between the two schemes and to assist in the convergence of awards each scheme makes, Ofcom may wish to consider preventing companies from transferring between the two schemes. By signing up to the decision making principles, the communications providers of each scheme would be required to remain with their current redress provider. This would prevent a company from using its power of patronage to undermine the economic viability of a scheme. The current trend of service providers treating the ADR scheme as simply another service provider means the decision is made on a procurement basis, with the company setting the standards rather than Ofcom. Doing so challenges both the independence of the ADR service and the authority of the regulator. Q2. Are there any other consequences following the introduction of the Principles that we have not included in our assessment? If so, please explain. As mentioned in Para A1.6 of the Decision Making Principles, is Ofcom s intention to publish the compensation matrix? Ombudsman Services believes that its publication may lead to an increase in the number of disputes from both the consumer and the companies over the amount of compensation that has been awarded rather than the substance of the complaint. It is noted that the Decision making principles requires the redress schemes be amongst other things, open and transparent. Does signing up to the principles require both schemes to publish data they hold about the complaints they receive including the performance of each communications provider? If schemes are expected to publish data, both sets must be comparable and follow clear Ofcom guidelines, to avoid participating companies from choosing the scheme which exposes them the least, and to avoid consumer confusion. 8

9 Q3. For communication providers and the schemes: Can you provide an estimate of any costs to your organisation from either the introduction of the Principles or as a consequence of the Principles proposed in Appendix 1? There are likely to be some additional costs to implement the principles in Appendix 1, although for the most part it is considered that they will be marginal. An area where there could be significant cost would be in the training of our staff, however it is our view that we should be doing this in any case and it would be appropriate to build it to our existing staff development programme. Q4. Do you have any comments on the scope and wording of the proposed principles? Ombudsman Services (subject to the comments made in paragraph 3.3 which refers to the unfairness of CISAS s procedure which normally prevents an adjudicator from making an award if the consumer has not requested one even if it s subsequently found there has been a problem) supports the decision making principles as articulated in section A1.2. Ombudsman Services could support the proposed Decision Making Principles to help as a guide to decision making and provide a common framework that both schemes can use. Ombudsman Services could further envisage the guide being used as a framework and serving as an aid and establishing a common reference point when decisions are made rather than it being be rigidly applied. We further welcome the recognition that the precise sums awarded should always be left to the discretion of the decision maker as it is in our view that providing such guidance is in fact beyond the remit of Ofcom. As previously mentioned in paragraph 3.11, the role of an ombudsman scheme is to level the playing field between the consumer and the communications provider. We do not treat both parties equally, our intention is to treat them fairly and impartially in accordance with the principles of natural justice. We suggest therefore that A1.3 (i) is reworded to reflect this approach.. 9

10 We also suggest that in order to minimise the absence of information from the companies, Ofcom may wish to consider introducing the imposition of a penalty if participating companies fail to co-operate. Q5. Do you have any views on methods to embed the Principles? As outlined in the consultation document we would find it useful if a champion of sufficient seniority is appointed within each scheme to help embed the proposed changes. It is also suggested that periodic meetings at an operational level take place to share experiences between the two schemes. 4.2 Ombudsman Services has considerable experience in the field of dispute resolution. We would be happy to provide clarification on any point in this evidence or if there is any other way we can help, please contact me. Lewis Shand Smith Chief Ombudsman 29 June