OBSI and the Legal System

How does the OBSI approach differ from the courts?

OBSI's approach to cases is different than the approach typically taken by the courts fundamentally because, as an ombudsman service, our purpose is different. Both courts and ombudsmen are expected to decide cases in a fair manner. However, ombudsmen are expected to deal with cases much more quickly, with less cost to the parties and without requiring the parties to have lawyers. To meet these expectations, our approach is less formal than the courts. Also, like other ombudsmen, our process is "inquisitorial," not "adversarial." That means, our investigators determine the issues and ask both parties questions as opposed to the courts which rely on the parties' lawyers to do that.

We deal with many more cases and do so much more quickly and cost-effectively than a court could

Every year, we investigate and settle hundreds of cases, mostly for amounts of less than $20,000. We resolve these cases quickly - usually in less than two months for banking cases and less than three months for investment cases. This helps consumers and firms move beyond their dispute efficiently so they can get on with their lives and their businesses.

Our processes are less formal than the courts

We are an informal alternative to the courts - and our approach to resolving disputes reflects this. We are required to resolve complaints fairly. This means that, pursuant to our Fairness Statement, we resolve complaints using an informal, non-legalistic approach that takes into account the legal rights of the consumer and the firm, as well as general principles of good financial services and business practice, regulatory policies and guidance, professional body standards and any relevant code of practice or conduct that is applicable to the case. Above all, our recommendations reflect what we believe to be fair to both parties in all of the circumstances of the case.

We do not have the power to compel the attendance of witnesses, take evidence on oath or test evidence by cross-examination. We talk to both parties and interview others who have relevant information, but we do not conduct oral hearings. Such procedural mechanisms would not be necessary or helpful to our work as an ombudsman service.

Our approach is inquisitorial, not adversarial

Unlike courts, an ombudsman service is not limited to looking only at the issues the consumer has focused on in their complaint. Our approach is "inquisitorial," or non-adversarial, meaning our investigators ask the questions they think are relevant to the case and also do their own research and analysis in the process of reaching a decision. Our process is designed so that neither party needs to have legal representation to be assured of a fair outcome. We listen carefully to both parties, let each one know about the information we have that is contrary to their position and concentrate on the facts of the case and our own expertise, rather than the complaint as presented or who can present the most persuasive legal arguments. We also encourage early informal resolution wherever possible - something that is not a priority in the courts.

All of these differences reflect the unique nature and purpose of an ombudsman service and are consistent with the best practices of financial ombudsmen around the world.

For a more detailed discussion of these issues, please see our Backgrounder on Natural Justice and the OBSI Process.