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Media Stories: 03/07/2007 - Ombudsman set for review ahead of ‘High Court’ role

Ombudsman set for review ahead of ‘High Court’ role

Published: 07:00 Tuesday 03 July 2007

By: David Campbell, New Model Adviser News Reporter, Citywire

Retail distribution review: adviser concern about muddying of independent label

The Financial Ombudsman Service (FOS) has agreed to undergo an independent review of its operation in preparation for the FSA’s principles-based regime (PBR).

In the RDR discussion paper, the FSA said the FOS had indicated its intention to ‘commission an independent review which will examine whether it is making the most effective use of the information it holds to improve the understanding of firms and consumers with the specific aim of clarifying its decision-making.’

A spokeswoman for the FOS was unable to give details of the timing or who would head the review, which was first announced in April, saying the Ombudsman board had yet to discuss the matter.

According to Chris Cummings, director general of Aifa, the FOS needs the review to test whether it is ready for a ‘High Court’ role under the new regime.

Cummings cited a speech earlier this year by John Tiner in which the FSA’s outgoing chief executive said the Ombudsman would under PBR take on greater legal authority, setting a precedent affecting case law in its decisions.

The FSA discussion paper also proposed capping the time in which consumers can complain to the Ombudsman at 15 years after recommendation of a product.