DISP 3 Complaint handling procedures of the Financial Ombudsman Service

In this chapter, 'out of jurisdiction' means outside the Compulsory Jurisdiction and the Voluntary Jurisdiction in accordance with DISP 2.

Where the respondent is a partnership (or former partnership), it is sufficient for the Ombudsman to communicate with one partner (or former partner).

This chapter applies to the Ombudsman and to respondents.

This chapter applies to a TP firm. This rule demonstrates the contrary intention under GEN 2.2.26R.

The Ombudsman will have regard to whether a complaint is out of jurisdiction.

Unless the respondent has already had eight weeks to consider the complaint (or for EMD complaints and PSD complaints the time specified by DISP 2.8.1R(2A)) or issued a final response or summary resolution communication, the Ombudsman will refer the complaint to the respondent (except where DISP 2.8.1R(4) applies).

If the subject matter of a complaint falls to be dealt with by the respondent under a consumer redress scheme, and the time limits specified under the scheme for doing so have not yet expired, the Ombudsman will refer it to the respondent to be dealt with under the scheme (except where DISP 2.8.1R(4) applies).

Where the respondent alleges that the complaint is out of jurisdiction, the Ombudsman will give both parties an opportunity to make representations before he decides.

Where the Ombudsman considers that the complaint may be out of jurisdiction, he will give the complainant an opportunity to make representations before he decides.

Where the Ombudsman then decides that the complaint is out of jurisdiction, he will give reasons for that decision to the complainant and inform the respondent.

Where the Ombudsman then decides that the complaint is not out of jurisdiction, he will inform the complainant and give reasons for that decision to the respondent.

Where the Ombudsman considers that the complaint may be one which should be dismissed without consideration of the merits, he will give the complainant an opportunity to make representations before he decides.

Where the Ombudsman then decides that the complaint should be dismissed without consideration of the merits, he will give reasons to the complainant for that decision and inform the respondent.

The Ombudsman may dismiss a complaint referred to the Financial Ombudsman Service before 9 July 2015 without considering its merits if the Ombudsman considers that:

1. (1)

   the complainant has not suffered (or is unlikely to suffer) financial loss, material distress or material inconvenience; or

2. (2)

   the complaint is frivolous or vexatious; or

3. (3)

   the complaint clearly does not have any reasonable prospect of success; or

4. (4)

   the respondent has already made an offer of compensation (or a goodwill payment) which is:

   1. (a)

      fair and reasonable in relation to the circumstances alleged by the complainant; and

   2. (b)

      still open for acceptance; or

5. (5)

   the respondent has reviewed the subject matter of the complaint in accordance with:

   1. (a)

      the regulatory standards for the review of such transactions prevailing at the time of the review; or

   2. (b)

      [deleted]

   3. (c)

      any formal regulatory requirement, standard or guidance published by the FCA or other regulator in respect of that type of complaint;

   (including, if appropriate, making an offer of redress to the complainant), unless he considers that they did not address the particular circumstances of the case; or

6. (5A)

   the respondent has reviewed the subject matter of the complaint and issued a redress determination in accordance with the terms of a consumer redress scheme; or

7. (6)

   the subject matter of the complaint has previously been considered or excluded under the Financial Ombudsman Service, or a former scheme (unless material new evidence which the Ombudsman considers likely to affect the outcome has subsequently become available to the complainant); or

8. (7)

   the subject matter of the complaint has been dealt with, or is being dealt with, by a comparable independent complaints scheme or dispute-resolution process; or

9. (8)

   the subject matter of the complaint has been the subject of court proceedings where there has been a decision on the merits; or

10. (9)

    the subject matter of the complaint is the subject of current court proceedings, unless proceedings are stayed or sisted (by agreement of all parties, or order of the court) so that the matter may be considered by the Financial Ombudsman Service; or

11. (10)

    it would be more suitable for the subject matter of the complaint to be dealt with by a court, arbitration or another complaints scheme; or

12. (11)

    it is a complaint about the legitimate exercise of a respondent's commercial judgment; or

13. (12)

    it is a complaint about employment matters from an employee or employees of a respondent; or

14. (13)

    it is a complaint about investment performance; or

15. (14)

    it is a complaint about a respondent's decision when exercising a discretion under a will or private trust; or

16. (15)

    it is a complaint about a respondent's failure to consult beneficiaries before exercising a discretion under a will or private trust, where there is no legal obligation to consult; or

17. (16)

    it is a complaint which:

    1. (a)

       involves (or might involve) more than one eligible complainant; and

    2. (b)

       has been referred without the consent of the other complainant or complainants;

    and the Ombudsman considers that it would be inappropriate to deal with the complaint without that consent; or

18. (16A)

    it is a complaint about a pure landlord and tenant issue arising out of a regulated sale and rent back agreement; or

19. (17)

    there are other compelling reasons why it is inappropriate for the complaint to be dealt with under the Financial Ombudsman Service.

The Ombudsman may dismiss a complaint referred to the Financial Ombudsman Service on or after 9 July 2015 without considering its merits if the Ombudsman considers that:

1. (1)

   the complaint is frivolous or vexatious; or

2. (2)

   the subject matter of the complaint has been dealt with, or is being dealt with, by a comparable ADR entity; or

3. (3)

   the subject matter of the complaint has been the subject of court proceedings where there has been a decision on the merits; or

4. (4)

   the subject matter of the complaint is the subject of current court proceedings, unless proceedings are stayed or sisted (by agreement of all parties, or order of the court) so that the matter may be considered by the Financial Ombudsman Service; or

5. (5)

   dealing with such a type of complaint would otherwise seriously impair the effective operation of the Financial Ombudsman Service.

The Ombudsman may refer a complaint to another complaints scheme where:

1. (1)

   he considers that it would be more suitable for the matter to be determined by that scheme; and

2. (2)

   the complainant consents to the referral.

The Ombudsman may, with the complainant’s consent, cease to consider the merits of a complaint so that it may be referred to a court to consider as a test case, if:

1. (1)

   before the Ombudsman has made a determination, they have received in writing from the respondent:

   1. (a)

      a detailed statement of how and why, in the respondent's opinion, the complaint raises an important or novel point of law with significant consequences; and

   2. (b)

      an undertaking in favour of the complainant that, if the complainant or the respondent commences court proceedings against the other in respect of the complaint in any court in the United Kingdom within six months of the complaint being dismissed, the respondent will:

      1. (i)

         pay the complainant's reasonable costs and disbursements (to be assessed, if not agreed, on an indemnity basis) in connection with the proceedings at first instance and any subsequent appeal proceedings brought by the respondent; and

      2. (ii)

         make interim payments on account of such costs if and to the extent that it appears reasonable to do so; and

2. (2)

   the Ombudsman considers that the complaint:

   1. (a)

      raises an important or novel point of law, which has important consequences; and

   2. (b)

      would more suitably be dealt with by a court as a test case.

The Ombudsman will attempt to resolve complaints at the earliest possible stage and by whatever means appear to him to be most appropriate, including mediation or investigation.

If the Ombudsman decides that an investigation is necessary, he will then:

1. (1)

   ensure both parties have been given an opportunity of making representations;

2. (2)

   send both parties a provisional assessment, setting out his reasons and a time limit within which either party must respond; and

3. (3)

   if either party indicates disagreement with the provisional assessment within that time limit, proceed to determination.

If the Ombudsman considers that the complaint can be fairly determined without convening a hearing, he will determine the complaint. If not, he will invite the parties to take part in a hearing. A hearing may be held by any means which the Ombudsman considers appropriate in the circumstances, including by telephone. No hearing will be held after the Ombudsman has determined the complaint.

A party who wishes to request a hearing must do so in writing, setting out:

1. (1)

   the issues he wishes to raise; and

2. (2)

   (if appropriate) any reasons why he considers the hearing should be in private;

so that the Ombudsman may consider whether:

1. (3)

   the issues are material;

2. (4)

   a hearing should take place; and

3. (5)

   any hearing should be held in public or private.

The Ombudsman may give directions as to:

1. (1)

   the issues on which evidence is required;

2. (2)

   the extent to which evidence should be oral or written; and

3. (3)

   the way in which evidence should be presented.

The Ombudsman may:

1. (1)

   exclude evidence that would otherwise be admissible in a court or include evidence that would not be admissible in a court;

2. (2)

   accept information in confidence (so that only an edited version, summary or description is disclosed to the other party) where he considers it appropriate;

3. (3)

   reach a decision on the basis of what has been supplied and take account of the failure by a party to provide information requested; and

4. (4)

   treat the complaint as withdrawn and cease to consider the merits if a complainant fails to supply requested information.

The Ombudsman may fix (and extend) time limits for any aspect of the consideration of a complaint by the Financial Ombudsman Service.

If a respondent fails to comply with a time limit, the Ombudsman may:

1. (1)

   proceed with consideration of the complaint; and

2. (2)

   include provision for any material distress or material inconvenience caused by that failure in any award which he decides to make.

If a complainant fails to comply with a time limit, the Ombudsman may:

1. (1)

   proceed with consideration of the complaint; or

2. (2)

   treat the complaint as withdrawn and cease to consider the merits.

The Ombudsman will determine a complaint by reference to what is, in his opinion, fair and reasonable in all the circumstances of the case.

In considering what is fair and reasonable in all the circumstances of the case, the Ombudsman will take into account:

1. (1)

   relevant:

   1. (a)

      law and regulations;

   2. (b)

      regulators' rules, guidance and standards;

   3. (c)

      codes of practice; and

2. (2)

   (where appropriate) what he considers to have been good industry practice at the relevant time.

When the Ombudsman has determined a complaint:

1. (1)

   the Ombudsman will give both parties a signed written statement of the determination, giving the reasons for it;

2. (2)

   the statement will require the complainant to notify the Ombudsman, before the date specified in the statement, whether he accepts or rejects the determination;

3. (3)

   if the complainant notifies the Ombudsman that he accepts the determination within that time limit, it is final and binding on both parties;

4. (4)

   subject to paragraph (4A), if the complainant does not notify the Ombudsman that he accepts the determination within that time limit, the complainant will be treated as having rejected the determination, and neither party will be bound by it;

5. (4A)

   the complainant is not to be treated as having rejected the determination under paragraph (4) if all the following conditions are met:

   1. (a)

      the complainant notifies the Ombudsman after the specified date of the complainant's acceptance of the determination;

   2. (b)

      the complainant has not previously notified the Ombudsman of the complainant's rejection of the determination;

   3. (c)

      in the view of the Ombudsman, the failure to comply with the time limit for acceptance was as a result of exceptional circumstances;

6. (5)

   the Ombudsman will notify the respondent of the outcome and, if the complainant is treated as having rejected the determination under paragraph (4), the effect of paragraph (4A).

1. (1)

   An Ombudsman may correct any clerical mistake in the written statement of an Ombudsman's determination, whether or not the determination has already been accepted or rejected.

2. (2)

   Any failure to comply with any provisions of the procedural rules made by the FOS Ltd does not of itself render an Ombudsman's determination void.

Where a complaint is determined in favour of the complainant, the Ombudsman's determination may include one or more of the following:

1. (1)

   a money award against the respondent; or

2. (2)

   an interest award against the respondent; or

3. (3)

   a costs award against the respondent; or

4. (4)

   a direction to the respondent.

Except in relation to a “relevant complaint” within the meaning of section 404B(3) of the Act, a money award may be such amount as the Ombudsman considers to be fair compensation for one or more of the following:

1. (1)

   financial loss (including consequential or prospective loss); or

2. (2)

   pain and suffering; or

3. (3)

   damage to reputation; or

4. (4)

   distress or inconvenience;

whether or not a court would award compensation.

The Ombudsman will maintain a register of each money award.

Except in relation to a “relevant complaint” within the meaning of section 404B(3) of the Act, an interest award may provide for the amount payable under the money award to bear interest at a rate and as from a date specified in the award.

A costs award may:

1. (1)

   be such amount as the Ombudsman considers to be fair, to cover some or all of the costs which were reasonably incurred by the complainant in respect of the complaint; and

2. (2)

   include interest on that amount at a rate and as from a date specified in the award.

Except in relation to a “relevant complaint” within the meaning of section 404B(3) of the Act, a direction may require the respondent to take such steps in relation to the complainant as the Ombudsman considers just and appropriate (whether or not a court could order those steps to be taken).

A respondent must comply promptly with:

1. (1)

   any award or direction made by the Ombudsman; and

2. (2)

   any settlement which it agrees at an earlier stage of the procedures.

In dealing with information received in relation to the consideration of a complaint, the Financial Ombudsman Service will have regard to the parties' rights of privacy.

This does not prevent the Ombudsman disclosing information:

1. (1)

   to the extent that he is required or authorised to do so by law; or

2. (2)

   to the parties to the complaint; or

3. (3)

   in his determination; or

4. (4)

   at a hearing in connection with the complaint.

So long as he has regard to the parties' rights of privacy, the Ombudsman may disclose information to the FCA or any other body exercising regulatory or statutory functions for the purpose of assisting that body or the Financial Ombudsman Service to discharge its functions.

The Ombudsman may designate members of the staff of FOS Ltd to exercise any of the powers of the Ombudsman relating to the consideration of a complaint apart from the powers to:

1. (1)

   determine a complaint; or

2. (2)

   authorise the disclosure of information to the FCA or any other body exercising regulatory or statutory functions.