When my case was mis-handled by the FOS a few years ago, the Independent Assessor asked FOS to take some action regarding it, and FOS declined to do so. The IA had no power to force them other than to issue a "recommendation" (which they could also ignore, but had to explain in the Annual Report if they did so). After discussion with the Principal Ombudsman, the IA backed away from this. I realised then that the IA has a high salary ( £56k for 2 days a week) and status, but no real powers, and may not actually be as independent as he should be. Since then I have taken an interest in FOS affairs and the IA's role. You can read my full review of the role of the Independent Assessor here

This is my view of the Independent Assessor's report 2010-11

Mrs Linda Costelloe Baker, the new FOS Independent Assessor (IA) has published her report on her first year in post. In the past this has always been part of the FOS Annual Review but this year, without explaining the change, the Board has decided to tack it on to the end of its formal Annual Report, where it languishes on page 60 following 15 pages of accounts.

The report covers a month or so of Michael Barnes's time in office as well as 11 months of Mrs Costelloe Baker's time, and is a rather different style, with numerous percentages and three "case studies" and but it is very much business as usual.

For many years the only way to contact the IA was via a Post Office Box. In her report, the IA takes the opportunity to tells us that this is to keep her mail separate from the FOS mail. No surprise there, but I would have thought FOS mail room is well capable of sorting out which letters are intended for her. There must be another reason. I wonder perhaps if the PO Box arrangement was chosen to avoid drawing attention to the IA's office location which is in FOS HQ. where she shares FOS staff and is close to FOS management, some would say too close.

This year she has introduced an email address and launched her own website which she tells us is responsible for her increased workload, up this year to 1 in every 783 FOS cases (The total FOS workload was 206,121). She does not mention the 43,000 extra cases seen by FOS in the year, which must be responsible for a large part of the increase. The new website address, www.independent-assessor.org.uk is actually owned by the FOS and she does not use the email address associated with this site, preferring the standard FOS address independent.assessor@financial-ombudsman.org.uk . The new website was actually published with the same photo of her as the FOS website, unfortunately printed back to front, which remained on the site for some months. I doubt if this embarrassing mistake would have happened if the IA had set up the site herself so I wonder how independent it really is.

Of the 263 cases referred to her, the IA only gave 'opinions' on 204. She upheld 60% of these and made recommendations (mostly financial awards) in about 94 cases. These awards ranged from £25 to £750. So in essence, the IA actually looked at only 1 in every 1000 cases and made a few small awards. In return for this the Directors Report (p37) tells us that the IA received remuneration of £56,408, 17% higher than last year. The post was advertised as being for 2 days a week, so this is equivalent to a rate of around £140,000 pa. which makes her pay rate equivalent to the highest paid executives at FOS ( Directors Report p40).

The IA tells us that the Board accepted all of her recommendations. Nothing new here !  I cannot find evidence that the Board has ever rejected a recommendation. A rejection would mean the matter being discussed by the Board with reasons published in the Annual Report. This brings the possibility of having to explain why FOS does not accept the recommendation of the IA they specifically appointed. Dirty washing would be on view to all, not surprisingly this has always been avoided. For an example of what can happen if a rejection becomes a possibility please read the case study in my full review of the IA's role.

The IA has given us some case studies to show what she does. The third case, Miss C, is very interesting and shows what can happen when FOS do not calculate the redress to be awarded. This is the usual situation, FOS rarely make calculations themselves and Mr Barnes, the previous IA, warned several times about the problems this brings. Another interesting facet is the revelation that Miss C was not entitled to complain and be answered by the FOS Chief Executive. The IA takes the sanguine view that lessons have been learned and the £300 compensation was in line with FOS guidelines, however she has done nothing to address the reaql issue that Miss C did not know whether to accept her award because FOS did not tell her how much money was on offer !  The IA does not mention a recommendation regarding how to avoid this situation in future.

In her final paragraph the IA tells us that FOS agreed to change a single word in the compensation guidelines when she asked them to. Is this illustration of the IA's authority really such a breakthough that it is worthy of reporting in the Annual Report ?  Much more important, I would have thought, would be her views on the re-write of her terms of reference, and the reasons the long standing rules needed to be changed so soon after her arrival.

I have no reason to doubt Mrs Costelloe Baker's integrity, qualifications and commitment to do good job as Independent Assessor, but her talents and experience are wasted in this cosy job, making small awards to a small number of people who feel the FOS has not followed its own rules. The Independent Assessor system allowed 263 claimants to pursue a three stage appeals process about FOS standards, as a result of which she made a few awards, some as little as £25.  At the same time 206,121 claimants had no right of appeal against FOS decisions where perhaps £100,000 ( £150,000 next year) has been in dispute and their pensions, savings, careers and businesses may have been at risk.  

FOS simply do not accept that with 206,121 cases being resolved, there must have been some mistakes in the decisions. FOS policy is that the Ombudsman is always right with no appeals allowed. It can't be right !

The Independent Assessor should be able to review decisions, or decide which cases have issues which should be independently reviewed by others. As it stands the FOS board do not even allowed her to comment on FOS decisions, even if she sees or suspects mistakes in them in the course of her work.


Directors Report 2010-11 (with IA's report on page 60)
FOS website page about the Independent Assessor
The Independent Assessor's personal website
Independent Assessor's terms of reference
My full review of the Independent Assessor's role