Speech by Ombudsman Peter Tyndall to the Chartered Institute of Arbitrators AGM on 24 April 2015

Thank you for your kind invitation to speak to you today. To a certain extent we all inhabit the same territory. We use different processes, we have different tools at our disposal, we have varied rules of engagement but at its most fundamental we are all seeking to resolve disputes. From the point of view of the parties who are involved in disputes, what they want is a dispute resolution process which is accessible, fair, competent, uncomplicated and timely and which leads to an equitable outcome.

At the outset I would like to explain to you what I do as Ombudsman and the powers available to me in seeking to resolve disputes. I will then give you an outline of my Office's views on the roll out of the ADR Directive. I will touch upon recent developments in the UK as they also roll out the Directive. In addition, I will make some general points on the complaints landscape in Ireland and how I think it could be improved from a complainant's perspective.

The Role of the Ombudsman

As Ombudsman I deal generally with complaints from members of the public who are unhappy with the administrative actions of a wide range of public bodies. These include Government Departments and Offices, local authorities and the Health Service Executive. Following the enactment of the Ombudsman (Amendment) Act 2012 over 200 additional bodies came under my remit. These include the universities and other third level colleges, the Education and Training Boards and a wide range of other public bodies.

It is important to stress that as Ombudsman I am not an advocate and I am not acting as a representative of the complainant against the public body. I must examine each complaint objectively on its individual merits and in doing so I must be fair to all the parties concerned. If I form the view that the public body has acted unfairly or improperly I seek to ensure that some form of redress is offered to mitigate or alter the adverse effect suffered by the complainant as a result of the actions of the public body. It is a matter for me to decide on the scale and nature of the redress which is appropriate in any given case. The Ombudsman legislation does not impose any limits on the redress I may recommend.

As I said, my Office does not run an advocacy service but in carrying out our daily work myself and my staff are very much conscious that there is a certain power imbalance when a member of the public is in dispute with a public body. In that regard my staff seek to level the playing field in tackling individual complaints. This is done in a number of ways. My Office has generally accepted authority and expertise in calling the public service to account. My staff has a vast knowledge of and expertise in public service administration and they bring this to bear in highlighting cases where inequity, unfairness or inconsistency is evident in decision making. Of even more importance is the ability to spot systemic weaknesses in dealing with individual complaints and making sure that those weaknesses are tackled. This can lead to improvements in public administration, the prevention of the same mistakes being made in the future and redress for people who had suffered similarly but who had never even come to the Office of the Ombudsman. Perhaps I can best illustrate the point I am making here by describing a case which came to my Office in the recent past.

Over a period of time a public representative had been trying to resolve an individual complaint on behalf of a woman against a local authority regarding the level of her local authority rent. Despite interaction with two local authorities which were involved and queries to the Department of the Environment and questions in the Dáil, the matter was unresolved at the time the public representative came to my Office in late 2014.

The local authority tenant was a foster carer and was receiving fostering allowance for two foster children. Under the particular Council's 2012 Rent Scheme fostering allowance was treated as income for the purposes of assessing rent. As a result the complainant's rent was increased from €38 to €120.

Under the Local Government Reform Act 2014 another Council took over the functions of tenant's Council in June 2014. The new Council subsequently reviewed the woman’s rent assessment under its own Rent Scheme and disregarded the fostering allowance in calculating her income. This was possible under its own scheme. The tenant's rent was reduced and the additional rent paid from June 2014 to the date of the re-assessment was refunded.

I was concerned about the original Council's decision to treat fostering allowance as income for the purposes of rent assessment. In my view this was not appropriate. The HSE (which paid out the Foster Allowance) had previously written to that Council about the way the assessment was conducted in this case. It pointed out that fostering allowance is used for the care of the children who have been fostered. The payment is used by the foster carers for the benefit of the children for maintenance, school funds, hobbies, therapy etc. The HSE also pointed out that fostering allowance is not reckonable income in terms of income tax or social welfare payments. The position of the Revenue Commissioners is that such allowances do not amount to a profit for the foster carer and it is disregarded for tax purposes.

The original Council had the legal authority to include fostering allowance as income for rent assessment purposes. However, in view of the purpose of the allowance, and its treatment for tax and social welfare purposes, I considered that it was both inconsistent and unfair to regard it as reckonable income for rent assessment purposes.

I asked the Council which had taken over the functions of the original Council to grant full arrears to the complainant in respect of the additional rent she paid from February 2012. I also asked the Council to identify any other former tenants of the original Council, who were in a similar position to the complainant and to grant full arrears in each case. The Council reviewed the case and refunded the woman €10,870 in overpaid rent. The Council also identified another person affected and provided a full refund in that case.

I then decided to broaden the scope of my examination of the issue. I wrote to the County and City Managers' Association asking it to survey all other local authorities to establish if any other of them is deeming Foster Allowance as reckonable income. In any case where this is happening I asked that the schemes be changed and full arrears be granted in any relevant cases. At present I am awaiting the CCMA's response but I am hopeful that, with its cooperation, the issue will be resolved nationwide.

The existing rent schemes are drawn up and approved by Council officials rather than the elected members. Decisions which are reserved under law to be taken by elected members are not open to scrutiny by my Office. It is intended as some stage in the future to make the approval of rent schemes a matter for the elected members. In light of this I also wrote to the Department of the Environment, Community & Local Government requesting that in implementing Section 31 of the Housing (Miscellaneous Provisions) Act, 2009, which will transfer responsibility for the making of rent schemes to the elected members of local authorities when it is commenced, it prevents the possibility of local authorities treating fostering allowance as income for the purposes of rent assessment in the future. The Department has brought my concerns to the attention of the Minister who will in due course be responsible for approving new regulations and guidelines under 2009 Act.

In an arbitration process the parties in dispute agree to submit the matter for determination by an arbitrator or arbitrators and the decision of the arbitrator is final and accepted by the parties involved. In contrast to mediation, a party cannot unilaterally withdraw from arbitration. A mediation process involves an independent and impartial mediator assisting parties to reach a mutually acceptable agreement. As Ombudsman I decide whether a complaint should be upheld in whole or in part or should not be upheld.

When a complaint is upheld I decide what is appropriate redress. The vast majority of cases which come before me are satisfactorily completed by way of preliminary examination with a very small minority going to formal investigation. If, following an investigation, I make a formal recommendation to a public body, such a recommendation is not legally binding. If, in my opinion, a public body's response to a recommendation is not satisfactory I may lay a Special Report before the Houses of the Oireachtas.

Since the establishment of the Oireachtas Committee on Public Service Oversight and Petitions any such Special Report would go before that Committee for further consideration. As part of its terms of reference this Committee is charged with considering my Annual or other reports and I have had a lot of positive engagement with the Committee.  I have to say that since the Office was established in 1984 it has submitted Special Reports in only a small handful of cases. Since becoming Ombudsman I have not had to exercise this power.

In carrying out my functions I have the power to demand any information, document or thing from any person and if a person fails to comply I have the power to go to the Circuit Court to seek a compliance order. I also have the power to refer any question of law arising in an investigation to the High Court for determination.

ADR Directive -Ireland

As you are no doubt aware the Department of Jobs, Enterprise and Innovation has engaged in a consultation process on the implementation of the EU Directive on Consumer Alternative Dispute Resolution and the EU Regulation on Consumer Online Dispute Resolution. As part of the consultation process my Office has made a detailed submission to the Department and I will return to this later.

http://www.djei.ie/commerce/consumer/issues.htm - ADR

The Directive must be transposed into national law by Member States by 9 July 2015 and the Regulation is directly applicable in Members States from 9 January 2016.

The Directive requires the State to facilitate access by consumers to alternative dispute resolution (ADR) procedures for domestic and cross-border disputes concerning contractual obligations stemming from sales/service contracts in all sectors and to ensure those procedures comply with the requirements set out in the Directive.

The Directive obliges the State to ensure –

·         that entities acting as ADR entities meet certain quality criteria including independence, transparency, expertise, effectiveness and fairness etc.;

·         that traders inform customers in relation to ADR entities/schemes which  cover the trader’s sector and whether or not the trader subscribes to those ADR schemes;

·         that qualified ADR entities resolve disputes within 90 days and ADR procedures should be free of charge or of moderate costs for consumers;

·         a competent authority is charged with the monitoring and functioning of ADR entities established on its territory.

The Regulation creates a European online platform (“ODR Platform”) which takes the form of an interactive website which will provide a single point of entry for consumers and traders seeking to resolve cross border disputes out-of-court concerning online sales/service contracts.

ADR Directive -UK

It might be of interest to mention how matters are developing in the UK in relation to the Directive There was also a consultation process in the UK undertaken by the mailto:conspol@djei.iemailto:conspol@djei.ieDepartment for Business, Innovation & Skills. The UK consultation process commenced in March 2014 and the Department published a set of proposals in November 2014 arising from the consultation. Among these are the following:

  • To appoint the Trading Standards Institute (TSI) to act as the UK’s competent authority covering ADR schemes in the non-regulated sectors. The Government will fund the start-up costs
  • To appoint sector regulators as competent authorities for their sectors where appropriate
  • To establish an ODR contact point to help consumers with cross-border disputes submitted via the European Commission’s ODR platform
  • The Government will work with the Trading Standards Institute (TSI) to produce appropriate guidance for business, to help traders meet the new information requirements informing consumers about the availability of ADR
  • Allow certified ADR providers to make decisions that are binding
  • Apply an eight-week extension to the six-year window an individual has to initiate litigation, should an ADR process be on-going at the time the six year window expires
  • The Government will not categorise in-house mediation as an appropriate ADR process when implementing the Directive
  • The Government will continue to consult stakeholders on the detail and merit of further simplification of ADR in the UK and assess the costs and benefits of making structural changes, such as an umbrella body sitting above a number of sector-specific ADR schemes

 Ombudsman's Submission on ADR

 As I mentioned already, my Office made a detailed submission as part of the ADR consultation process here.

My Office pointed out in its submission that the implementation of the ADR Directive provides Ireland with an opportunity to provide consumers and users of public services with access to independent redress in a consistent and straightforward fashion.  The spirit of the ADR Directive is ambitious and visionary.  It envisages properly independent ADR entities covering the consumer landscape, covering commerce and privatised public services.  My Office expressed that view that at consultation stage the proposals for implementation are minimalist and serve only to tick the box.  There is an opportunity here which is being missed.

A clear vision, in line with that being adopted by some forward thinking countries would go for an uncluttered landscape.  It would avoid the risk of having a proliferation of ADR entities which would serve only to confuse the consumer and limit their impact.

There are gaps in the provision of ADR in the State. Over time there is an increasing tendency to out-source the delivery of public services to private entities which leads to less oversight and loss of truly independent complaint and redress mechanisms for the public. A recent example would be the wide spread privatisation of waste collection services by local authorities. The Ombudsman model has proven to be effective internationally in providing individual redress and in bringing about systemic improvements to services for the benefit of larger groups of service users.
 
When all services are provided by the State, there is little issue about access to redress. The public sector Ombudsman provides a free and accessible ADR service to all members of the public availing of those services. However, when services are privatised, then access to redress can be lost. For example, if the railways were to be run by a private company, would they stop being a public service? Is the citizen less deserving of a good redress mechanism when they avail of a public service provided by a private company versus as a public body?

In our submission we pointed out that under the EU ADR directive, all of the networked services, including post, electricity, gas, public transport, and telecoms will have to come within the jurisdiction of an ADR entity. These utilities could come within the jurisdiction of the Ombudsman, to offer a one stop shop approach to redress for people who have not been treated properly by public services. The role of the Public Services Ombudsman should be complemented by the creation of a Consumer Ombudsman to cover other commercial transactions, thus providing a simple and straightforward route to redress in compliance with the Directive.

Under such a development, the Ombudsman’s office would then cover a mixture of state, independent and private bodies, a so-called hybrid model.  This would not be an entirely new development as many services already under jurisdiction are provided by independent or private bodies on behalf of the State and its agencies, while the new provision in the Ombudsman (Amendment) Act 2012 to draw in significantly funded bodies will draw in many more, so the template is already in place.  However, a more fully evolved hybrid model would need to see changes in the way the Office of the Ombudsman operates.

At the moment, the Ombudsman makes recommendations, rather than having binding powers and is funded from the public purse, rather than by bodies in his jurisdiction.  Private Sector Ombudsmen (such as the Financial Services Ombudsman) can be established by law and organisations in their jurisdiction can be required in law to cooperate with them.  

One important distinction from public services Ombudsmen is that although such schemes can be created by statute, their funding is usually provided by the industry sector in which they operate, and not by the State. In a hybrid model, it is likely that binding powers (findings and recommendations) would be needed in respect of private providers, who would be less susceptible to the democratic process and criticism by the Oireachtas. Funding would also need to come from the industry, whether through a levy, a charge per case, or a combination of both. The cost should not fall to the public purse. The cost can act as an incentive to get things right in the first place – the so-called “polluter pays” principle.

Such hybrid Ombudsman schemes operate successfully in Australia and elsewhere, and Ireland now has an opportunity to follow their example.  It is the job of the State to ensure that citizens have access to public services. It is also widely accepted that citizens should have access to independent redress in the shape of Ombudsmen. Growing complexity in service provision should be counterbalanced by simplicity in accessing redress.

Complaint Processes Generally in Ireland

I have commented in our ADR submission and elsewhere on the current complaint processing landscape in Ireland. Even for reasonably well informed people who wish to complain it can be extremely difficult to  decide how to complain and where to complain. If I have a health care complaint a wide array of potential complaint routes open up before me. Do I complain to the service provider or the Department of Health or the HSE or perhaps the Ombudsman. Should I contact the HIQA or CORU or the Medical Council or a combination of these bodies? As it happens there has already been an initiative to help the public to make health sector complaints. The website www.healthcomplaints.ie which was developed by my Office in partnership with other bodies provides an on-line signposting service for the public.

It seems clear to me that complaints processes generally in Ireland could be radically improved and these would serve to provide a more efficient and effective delivery of ADR and other complaint services. In many instances complaints considered by my Office about the services provided by public bodies have been compounded by very poor complaint handling. People face delays, a lack of information, incomplete answers, defensive attitudes and no effective redress. Widely varying approaches to complaint handling abound, with no obvious rationale for the differences.

Introducing a standard approach to complaint handling across the public sector, setting out clear timescales, standards for responses, a common approach to redress and above all, a focus on tackling most dissatisfaction at the time it arises, can bring real dividends. This has the potential to lead to greatly improved complaint handling. It means that a single investigation can address complaints across multiple providers. It allows for standardised complaint training for staff of all public service providers. It gives complainants certainty about what they should expect. A model system would be streamlined and based on an “Investigate Once, Investigate Well” approach. It would eliminate multiple stage processes which create work and delay resolution.

Making it easy for people to complain is essential if we are to improve public services. I want people to be told as soon as they complain to any public service provider about their right to complain to my Office if they remain dissatisfied. I want them to be able to complain in a way which they find convenient, in a language they are comfortable with and in a medium which suits them. A standardised public sector complaint process would also make it easier for the agencies within my jurisdiction with no need to reinvent the wheel.

One way to address this confusion for members of the public who do not know who to complaint to is to provide a single portal for all public sector complaints. Such a model has already worked successfully in Wales where I was Ombudsman before taking up my present post. I have made a case for such an initiative through a number of fora since becoming Ombudsman and it is one which I will continue to promote.

Thank you for your attention. I will be happy to take any questions.