The 2013 Independent Review of FOS, conducted by CameronRalph Navigator and released this morning, found the external dispute resolution (EDR) scheme had met five of its six benchmarks, namely: accessibility, independence, fairness, accountability and effectiveness.
However, the review found FOS had only ‘partially met’ its efficiency benchmark – with ‘timeliness’ being the key sticking point. FOS currently has one group of disputes that are in excess of 180 days old, and another group of disputes that are over a year old.
Speaking to InvestorDaily, FOS chair Professor Michael Lavarch said the finding did not come as a “huge surprise” given the organisation and the board has been “very much focused” on the issue of timeliness over the last year.
“It has been the front and centre focus of the organisation to get those disputes resolved and get our processes operating as effectively as possible,” he said.
Asked about examples cited in the independent review where disputes go through as many as five FOS teams and can be signed off by nine people, Mr Lavarch acknowledged that changes needed to be made.
“We accept that we need to do a fairly significant measure of redesign of the fundamental flowpath of matters through the organisation,” he said.
But the examples cited by the independent review need to be taken in context, he argued.
“FOS is not a 20 year-old organisation. It’s coming up to five years, and it brought together five previous dispute resolution schemes,” said Mr Lavarch.
Each one of those five schemes had their own methodology, he said – and FOS has been obliged to consolidate the terms of references of the previous schemes and construct a new IT platform.
In specific relation to timeliness, a “vast majority” of matters FOS deals with are resolved at the first stage of FOS “touching” them, said Mr Lavarch.
“You only get up to nine people touching them if it’s a very involved, complicated and probably high-value dispute which is very contentious,” he said.
The major critique of the review, said Mr Lavarch, was that FOS has people at both the “front end” and the “back end” of disputes who are not as senior and experienced as they should be.
FOS has accepted the review’s recommendation that it allocate more people with a higher “skillset” at the earlier stages of dispute, he said.
“This means front-end loading our processes a bit more. We accept the thrust of what the report has said to us, and we’re certainly going to be talking to our stakeholders in making these changes,” said Mr Lavarch.
FOS will involve financial services industry bodies and the banks in discussions about the review, he said.
“We are conscious that we don’t exist in a vacuum in implementing these change processes. We’ve got to talk to everyone and make sure everyone’s geared up to move in lockstep,” he added.