MPs on the Treasury select committee have slammed the Financial Ombudsman Service’s plans for how it will review past cases for evidence of poor decisions.
FOS is planning to review decisions made soon after it reorganised in 2016, and has provided details of its proposed methodology to committee chair Nicky Morgan.
FOS has outlined a two-stage process, where Deloitte will review a sample of cases to see if they adhered to the required standards, before former Claims Management Regulator board member Carol Brady will look at any cases that did not apply the right controls to see what the outcomes have been.
However, in a letter to FOS chief executive Caroline Wayman, Morgan has criticised the plans for placing “too much emphasis on process.”
She says: “Whilst all the correct boxes may have been ticked when a case was being processed, it doesn’t necessarily mean that a correct case decision was then made.”
Morgan adds: “Many people have contacted the committee with concerns that the FOS has failed to act with due diligence in their cases. To ensure that the public can have full confidence in the FOS’ review, and the FOS itself, it must properly asses case outcomes, as well as process.”
Morgan is also critical of the test the FOS plans to use to judge decisions by.
She says: “It’s concerning that cases will be tested against the ‘Wednesbury reasonable test’, that is, the ombudsman’s decision would have to be considered irrational as well as unreasonable. This is an extremely high bar as decisions can be poor without necessarily being Wednesbury unreasonable.
“In its current form, the review will do little to help restore public confidence in the FOS.”