Barristers want oral hearings in FOS overhaul

21 April 2011 10:25 am | By Nicole Blackmore

Leading barristers have put forward radical proposals for reform of the Financial Ombuds- man Service, calling for an app-eal tribunal to hold oral hearings for disputed adjudications.

Responding to the Treasury’s latest consultation on the new regulatory structure, barristers Anthony Speaight QC and Peter Hamilton say the scheme’s omb-udsmen should be scrapped altogether and adjudicators should issue a provisional decision and if either party disputes the finding, it should be referred to a new first-tier tribunal.

The tribunal would hold oral hearings and make decisions in accordance with English Law.

Hamilton says the tribunal should have no ceiling on its financial jurisdiction, meaning it could act as a route to full compensation for consumers who have won their case at the FOS but are unable to secure full compensation due to the FOS upper award limit of £100,000.

Under the proposals, firms would continue to pay case fees while consumers would pay nothing to complain to the FOS.

If a complaint is upheld by an adjudicator and a firm refers it to the tribunal, legal costs incurred by the consumer would be recovered if they won the appeal or paid by a legal aid fund if they lost. Firms would not be entitled to costs against the consumer if they are successful on appeal, even if the consumer initiated the appeal process.

Hamilton says the costs saved by abolishing ombudsmen should be channelled into the legal aid fund. He says: “Our proposals would bring FOS in line with the rule of law and simp-lify and speed up the FOS process without additional cost.”

Facts and Figures Financial Planners managing director Simon Webster says: “A tribunal is a good idea if it can be run on a cost-neutral basis.”

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