Over the last 20 years, the Insurance & Financial Services Ombudsman Scheme (www.ifso.nz) has assisted more than 55,000 consumers to resolve their complaints.
“This job is immensely engaging,” says Karen Stevens, who is in her 18th year as the Insurance & Financial Services Ombudsman (IFSO).
“Effective dispute resolution as an ombudsman is about bringing two parties together, listening to both sides and considering the facts and evidence as an impartial and independent third party.”
Ms Stevens started her legal career in civil litigation, moving into alternative dispute resolution, before specialising in financial services dispute resolution through her role as the IFSO.
With Dame Paula Rebstock taking care of governance in her seventh year as Chair of the IFSO Scheme, Ms Stevens says her own leadership role is balanced between that of decision-maker, as Ombudsman, and Chief Executive, running the scheme as a managing partner would a law firm.
IFSO Scheme case managers are LEADR trained mediators, and most are legally qualified.
“If we can get an agreed outcome, the complaint is resolved. This is the ultimate outcome of a dispute – both parties reaching agreement, rather than a decision being imposed. If this isn’t possible, we do make a decision based on the facts, the contract and the law,” Ms Stevens says.
“The legal analysis behind our decisions is vital, even if it is not immediately obvious. We consider the facts and listen to what both parties have to say.
Using legal skills
“We must have regard to the law and always be fair, reasonable, transparent and impartial. This utilises our legal skills and requires an advanced level of dispute resolution and people skills to reach an outcome that both parties accept, even if they disagree with the decision. Whether the complaint is resolved by agreement or decision, it is essential that both parties feel they have been heard and understood and that the process has been fair.
“The process itself gives consumers access to justice outside the courts, at no cost to them. They have the opportunity to be heard and to gain a better understanding of the issues. Equally, it is good for the financial services industry. Financial service providers don’t want to be at odds with their customers, so we can help them manage their own complaint processes and give them tools to avoid disputes. Clear communication plays a big part.
“Our work preventing complaints from arising is just as important as our complaint resolution work,” Ms Stevens says. The IFSO Scheme provides information for consumers to make informed choices, and an extensive training programme for industry participants.
Case study summaries of all complaints are available from the IFSO Scheme website. “Our case studies are one of the most valuable resources we have. While these do not create precedents, they are useful as a guide to how we are likely to approach issues.”
Set up in 1995, the IFSO Scheme (originally named the Insurance & Savings Ombudsman Scheme) followed the establishment of the Banking Ombudsman Scheme in 1992, when consumer rights were becoming a greater focus for the financial sector. Ms Stevens is a founding member of ANZOA (the Australian and New Zealand Ombudsman Association), and the International Network of Financial Ombudsmen.
In 2010, a New Zealand law change made it mandatory for all financial service providers to join an approved dispute resolution scheme. Membership of the IFSO Scheme jumped from about 50 insurance participants to the current 4,000+, significantly expanding the subject range of complaints.
In a day’s work
“In any one day we could be looking at a lost luggage claim for travel insurance to claims about vehicle damage, disability, income protection insurance, or a house rebuild in Christchurch. There could be an issue with financial advice, a credit contract, or superannuation.
“The impact of the Canterbury earthquakes has probably been the most challenging part of my role,” Ms Stevens says.
The IFSO Scheme has dealt with over 1,570 Canterbury earthquake complaint enquiries and 140 complaints.
“Although we now receive fewer earthquake complaints, the law is constantly evolving as new cases come through the courts. We have to adapt our approach to deal with the increasing complexity of the cases and the need to reach agreed outcomes. Facilitated negotiation at the early stage of these complaints has worked well for the parties. Formal investigation is put on hold to see how much can be resolved incrementally.”
Ms Stevens says the flexibility of resolutions is part of the attraction and the challenge of the job. The IFSO Scheme has an interesting role as facilitator and decision-maker. While decisions are binding on the financial service provider
members, they do not compromise any legal rights for the consumer. If consumers are not happy with the outcome, they can still go to court.
It is interesting to note that, in 18 years, Ms Stevens has never had to make a binding award on a participant. She has made many recommendations, which have all been accepted, albeit a bit reluctantly in some of the cases. One such case involved the issue of whether an insured had committed “suicide” (as defined in the policy), by taking an overdose, when there was no evidence of any deliberate intention to do so.
Ms Stevens says “making a difference is important. However, sometimes we have to manage unrealistic expectations. There may simply be no cover under a policy. Equally, in some of the new credit contract complaints, a consumer may not be able to keep a vehicle if, for example, they have not made the required payments under the contract.
“We are not consumer advocates, and we can’t champion a particular cause. Fair and reasonable decision-making is about providing a fair process, which means that some complainants don’t always get what they want.”