'FOS is quasijudicial but does not act like regulator'
Financial Ombudsman Service chief executive Natalie Ceeney says the FOS is “unashamedly quasi-judicial” but insists it does not act like a regulator.
Giving evidence to the Treasury select committee last week, Ceeney said the body’s role is inherently quasi-judicial.
She said: “We look at individual cases and we decide on the merits of each case who wins. We are unashamedly quasi-judicial.”
She was responding to a question from committee member and MP for Streatham Chuka Umunna concerning Aifa’s accusation that regulatory creep has seen the FOS shift from a dispute resolution service to an organisation that seems to act as both judge and jury.
In September, Aifa director Robert Sinclair said: “Its original purpose was to arbitrate, to reconcile parties to an agreed solution on a fair and reasonable basis.
“Too often in recent times, they appear to act in a quasi-judicial way.”
Ceeney told the TSC: “We were set up 10 years ago as a lower cost and fast alternative to the courts. Our role is inherently quasi-judicial.
“Where I am hearing criticism from the industry is that we act in a regulatory role and there I would be more robust. We are not a regulator.
“However we extrapolate from what we see in cases and sometimes we do have issues that arise from that, which we pass back to the regulator.”
The 2008 Hunt Review into FOS warned the ombudsman to be conscious of instances where it was in danger of becoming a “quasi-regulator or quasi-legislator”.
Baronworth Investment Services director Colin Jackson says: “From experience, I think there is the inclination to rely on previous decisions if they feel it benefits the consumer which, of course, is not the way the judiciary works.
“There is a danger that through inconsistency, the FOS could veer into becoming a law unto themselves.”