The High Court has quashed a decision made by Chief Ombudsman Peter Boshier on the grounds that emails he sent to Parliament Speaker Trevor Mallard showed he did not have an open mind on an issue he was considering.
And the court has strongly suggested that reconsideration of the matter – about the use of the name Ombudsman by a dispute resolution service – be delegated to a temporary Ombudsman.
Given that Boshier is the chief arbiter on many disputes between the public and Government agencies, the judgment by Justice Christine Grice is a damning one.
Boshier said in a statement he accepted the decision and will implement the findings.
"This has been a long running legal case and I believe this judgement provides a way forward for everyone involved."
The Ombudsman's website says "the Ombudsman is independent and impartial, with a focus on fairness for all."
Emails sent by Boshier to Mallard, about a piece of legislation before the House protecting the term "Ombudsman" formed a strong part of the reasoning by Grice that Boshier had pre-determined the issue at hand.
The Ombudsman is an Officer of Parliament, not a Government appointment, and he reports to the Officers of Parliament committee chaired by Mallard.
Grice said it was not improper in principle for the Chief Ombudsman to ask the Speaker to consider a move to better protect the name "Ombudsman" or to discuss the legislation.
But the timing and content of the emails "provide evidence which weighs heavily toward the fact that the Chief Ombudsman had closed his mind and was not amenable to persuasion".
At the centre of the case is the Financial Services Complaints Ltd (FSCL) which is one of four providers approved by the Government for dispute resolution services for financial service providers, including banks, finance companies, and insurer.
Of the other three approved dispute resolution services, two
use the term "ombudsman:" the Banking Ombudsman Scheme (BOS) and the Insurance and Financial Services Ombudsman (IFSO) scheme – both of which were set up in the 1990s by the banking and insurance industries for voluntary dispute resolution.
FSCL applied to the Chief Ombudsman to describe itself as "a Financial Ombudsman Service."
He declined the application in July 2016 but it was set aside by the Court of Appeal in February 2018 after a judicial review and sent back to Boshier for reconsideration.
A month after the Court of Appeal quashing, Boshier wrote to Mallard seeking greater protection for the term "Ombudsman".
Legislation was drafted and it had a provision reserving the use of the term Ombudsman for BOS and IFSO only – not initially for FSCL, although it was added in March 2019 to allow for a possible decision in its favour by Boshier.
According to the Grice judgment, Boshier noted in the letter to Mallard that he was to reconsider FSCL's application and would do so "without any prejudgment of the outcome."
In July 2018, Boshier sent FSCL a provisional decision again refusing consent to use the Ombudsman name. FSCL replied on August 6, setting out its objections and offering to expand on its submissions.
On the two days that followed, Boshier was in email discussion with Mallard - having sent him his provisional decision on FSCL and the company's response - about the progress of the draft law.
"I must say," Boshier said in his email, "It would be of enormous benefit to me if, before I make a final decision, Parliament has decided to make a move on this issue It would just reinforce my hand that much more ..."
The judgment does not contain Mallard's response but it includes Boshier's thanks to Mallard for his response ... "my every instinct is to try and kick the ball into touch and hope than no lineout occurs quickly. I risk another turnover!"
The judge said the email exchange occurred while the Chief Ombudsman was in the midst of considering the FSCL application for approval.
"In particular, the comment that if Parliament had made a move it 'would reinforce [his] hand that much more' indicates that a decision to refuse FSCL's application had already been made by the Chief Ombudsman and he was looking for material in order to support that decision, and would [be] delaying giving the final decision to obtain that evidence ...
"The comments were made at a critical time in the course of the reconsideration process.
"The Chief ombudsman was the sole decision-maker and as an experienced decision-maker, understood the importance of a fair process and knew how to undertake such a process.
"The unfiltered comments exposed the Chief Ombudsman's real view on the matter and undermine statements made by [him] to FSCL at later dates that on their face may otherwise have indicated an open mind ...
"In addition inferences can be drawn from the delay and the process of the decision-making which support pre-determination."
The judge also considered it salient that the Chief Ombudsman had been privy to the fact that the draft bill contained reserve provisions for BOS and IFSO to use the term Ombudsman, and he had not advocated for the same provision for FSCL while he was still actively considering approval.
Boshier said in statement that as Chief Ombudsman he was required to make an administrative decision about whether Financial Services Complaints Ltd (FSCL) would have permission to use the word 'Ombudsman' as part of its branding. But, the Act prevented it from being used without his permission.
"I need to make clear that an administrative decision like this one is quite distinct from my core role of investigating public sector agencies, receiving protected disclosures from whistle blowers, and considering complaints about official information.
I did have an initial view on whether a commercial organisation should use the word 'Ombudsman' in its branding, and the Court found it was legitimate for me to hold this view initially. However, I also accept the Court's finding that I did not keep an open mind all the way through the decision-making process."
He said the court recognised his process for considering the application was 'otherwise fair', declining it was open to him and it was acceptable to talk to MPS about the prospect of changing the law.
Boshier said people in public life can expect to face scrutiny about decisions they make and that was a good thing.
"As Chief Ombudsman, I ask decision makers every day to accept independent review and to make changes and I must do the same.
In line with the Court's ruling, FSCL's application for the use of the word 'Ombudsman' in its name will need to be reconsidered. I am currently taking advice about who should do this. My office will get in touch with the company about the next steps."
"The Court has made its decision. It's important now for the application to be looked at with fresh eyes."