Schedule 17: the Ombudsman Scheme
849.This Schedule contains further details concerning the constitution and powers of the Financial Services Ombudsman Scheme.
Paragraph 3: Constitution
850.This sets requirements as to the scheme operator’s constitution. These include that the chairman of the scheme operator must be appointed by the Authority with the approval of the Treasury. The scheme operator must be independent of the Authority.
Paragraph 6: Status
851.This confirms that the scheme operator, its staff and the ombudsmen do not exercise their functions on behalf of the Crown.
Paragraph 7: Annual Report
852.The scheme operator has to publish an annual report of its activities and also a report from the Chief Ombudsman.
Paragraph 8: Guidance
853.The scheme operator can disseminate appropriate information free of charge. This could include guidance on the scheme's procedures or advice on how to deal with disputes before coming to the scheme.
Paragraph 9: Budget
854.In order for there to be external scrutiny of the scheme's finances, the scheme operator’s budget has to be approved by the Authority.
Paragraph 10: Exemption from liability in damages
855.The efficient operation of the scheme could be significantly disrupted if its actions were subject to frequent legal challenge. This paragraph provides immunity for the scheme operator and its staff from actions for damages, similar to the immunity enjoyed by the Authority.
Paragraph 11: Privilege
856.This ensures that evidence produced during proceedings under the compulsory jurisdiction is protected against actions for libel or slander.
Paragraph 13: Authority’s procedural rules
857.This requires the Authority to make procedural rules for the operation of the compulsory jurisdiction of the scheme. In respect of rules governing how authorised persons deal with complaints, it extends the Authority’s rule-making powers under Part X of the Act.
Paragraph 14: The scheme operator’s rules
858.This requires the scheme operator to make other procedural rules for the compulsory jurisdiction. It provides, in particular, for rules to be made which allow an ombudsman to dismiss a complaint without consideration of its merits, for example where he deems the complaint to be frivolous or vexatious, and for the early stages of the handling of a complaint, for example a conciliation stage, to be handled by a member of the scheme operator’s staff other than an ombudsman.
Paragraph 18: Terms of reference to the scheme
859.This provides that the scheme operator has power to set terms of reference for its voluntary jurisdiction dealing with matters for which rules may be made under the compulsory jurisdiction. The terms of reference must be approved by the Authority.
Paragraph 19: Delegation by and to other schemes
860.Although the scheme is intended to cover most complaints relating to the financial services industry, there is likely to be some continued overlap with other arrangements, for example in the areas of pensions and consumer credit. The scheme would be able to agree with other schemes which body should consider complaints within the voluntary jurisdiction. The arrangements must be approved by the Authority.
