FOS case questions determinations process
Questions have been raised regarding determinations made by the Financial Ombudsman Service (FOS) after a recent court case argued it should not be able to make decisions ‘which no reasonable tribunal could properly come to on the evidence'.
The case - FOS vs Pioneer Credit Acquisition Services - heard in the Victorian Supreme Court last month examined whether FOS is required to correctly decide a question of law which it is required to decide.
It also examined whether FOS should restrict itself to settling consumer disputes and not acting in the same manner as a court and settling disputes as if they were legal proceedings and whether FOS should avoid making decisions that would not be reached by other tribunals using the same evidence.
While the case was settled in favour of FOS King and Wood Mallesons senior associate Travis Toemoe stated that laywers were troubled at the idea that a FOS determination was binding on a member and cannot be appealed.
Toemoe said lawyers also remained concerned that FOS can determine disputes by referring to matters beyond the applicable law.
"In common law jurisdictions the role of an arbiter of disputes (a court) is to interpret the law, not to make it. From a lawyer's perspective, the role of FOS seems to encompass both the role of courts and the role of the legislature," Toemoe said.
"Whilst one can see the attractiveness of a fast, cheap and efficient dispute resolution service such as that provided by FOS, is that outweighed by the rights foregone by members? Do members really want to continue to expose themselves to a DR process where the law is only one of many considerations in determining a dispute?"
Recommended for you
AFCA has confirmed United Global Capital’s membership of the body will not be extended to accept further complaints, avoiding a repeat of the Dixon Advisory scenario.
Three of Australia’s largest financial advice groups have shared their thoughts with Money Management on whether they would include crypto on their approved product lists.
Shadow treasurer Angus Taylor has vowed to introduce a bill to legislate a raft of financial services reforms if the Coalition is elected.
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
