Ombudsman schemes: propping up justice

It is widely acknowledged that the civil courts and tribunals system is ripe for reform. There is a perception that consumers are deterred by a system that is overstretched, and that processes are protracted, costly and overly adversarial.

In this context the government’s appetite to reform the civil justice system is welcome, and the recently announced Prison and Courts Reform Bill offers a chance to modernise. It also offers a great opportunity to understand how alternatives to the civil courts, such as ombudsman schemes, can play a much more significant role.

Ombudsman Services is the largest multi-sector ombudsman scheme in the UK. Last year we accepted 95,000 complaints for investigation, mainly about energy suppliers and communications providers. As consumers get more vocal about their rights and less likely to put up with a poor or failed service, there is a danger that the courts could be swamped by low-level, low-value disputes. It is recognised that alternative dispute resolution (ADR), including ombudsman schemes, is an increasingly important part of the civil justice landscape.

Ombudsman Services recently hosted a roundtable discussion to consider how ADR providers, government and the legal profession can work together to help deliver affordable and efficient access to justice.

For hundreds of thousands of individuals, ombudsman schemes provide a more appropriate route to justice than court. They are free for consumers, advice and support is given, the methodology is investigatory rather than adversarial, and those who investigate are specialists and can call on experts for advice. Decisions must be made within 90 days, but most are delivered in less than half that time. It is also good for business – the cost is generally less than engaging with the court system, decisions are quick, and there is a consistency of outcome.

Yet the principles of natural justice are upheld with an impartial and independent process. We deliver legally binding decisions and redress, making ours a substantive form of justice. The consumer, however, retains the right to pursue the case through the courts if they reject the outcome.

As well as resolving complaints on an individual basis, ombudsman schemes help businesses to learn from their mistakes, highlighting systemic failure, working with them to improve service and complaints-handling, and preventing future consumer detriment by tackling systemic issues in companies or sectors. Ombudsman schemes also have unique data sets that can be used to inform consumers, drive change in industry and provide insight to regulators and governments. All of which helps reduce costly consumer detriment.

As the Ministry of Justice seeks to reduce pressure on and modernise the civil courts, it should take into account the alternatives that already exist and the potential for developing them further. While there will always be a need and a right for disputes to be heard in the courts, for many cases of consumer detriment ombudsman schemes are a much more proportionate and appropriate route.

As part of its justice reform legislation, the MoJ must review how alternatives to the courts and tribunals system can play an increased but complementary role. It should ensure that the courts and tribunals system deals with disputes that are financially significant, unusual, or require a legal judgment, with ombudsman schemes and other forms of ADR empowered to deal with other cases, where it is more proportionate and appropriate for them to do so.

While ADR and ombudsman schemes should never be seen as a substitute for the formal justice system, the time has come for us to take our place as not just an alternative to, but also an integral part of, the civil justice system.

Lewis Shand Smith is chief ombudsman at Ombudsman Services