Professional indemnity insurers' lack of understan-ding of the conciliatory nat-ure of the Financial Ombudsman makes it difficult to solve complaints without apportioning blame, according to FOS head of communications David Cresswell.
He says PI firms' interference in trying to cover any exposure that IFA cli-ents may have to misselling claims makes it difficult for the FOS to operate and often results in parties being unnecessarily blamed.
But PI providers have hit back at the claims, saying the FOS is rarely interested in conciliation and is more determined to reach a verdict.
Cresswell says providers approach the service as if it is a court of law and are more interested in verdicts and blame rather than a solution to the problem. He believes these actions limit the FOS's options because they rule out conciliation almost immediately.
Cresswell says within conciliation, there is no need for people to admit guilt but PI providers are concerned about prece-dents being set and the guilt of their IFA clients so they often want direct judgments rather than conciliation.
Cresswell says: “When PI providers get involved, it cuts out half the process, thus limiting the IFA's ability to find a harmonious solution. The irony is that most of the time, PI excesses are far more than any damages that we would award.”
PI provider Collegiate managing director Tony Howe says: “I think the boot is on the other foot. I have never seen the omb-udsman try to conciliate in any of the cases I have been involved in. It is more interested in investigating and finding a verdict than reaching conciliation.”