FOS changes review into case outcomes in response to MP concerns

FOS agreed to review cases made during the early stages of its reorganisation in 2016 after a Dispatches programme claimed staff were not behaving appropriately, particularly around the way in which complicated casework was carried out.

The first stage of the ombudsman's plans will comprise a sample review exercise to check against the relevant controls and standards, which will be undertaken by Deloitte.

The second stage will comprise a further review of any case found not to have been handled in accordance with the FOS’ controls and standards to examine the outcome, which will be undertaken by Carol Brady MBE.

However Nicky Morgan, chair of the Treasury Committee, raised concerns about the ombudsman's plans to use the ‘Wednesbury reasonable test’ in the second stage, meaning any decision would have to be considered 'irrational' as well as unreasonable.

Caroline Wayman, chief executive of FOS, told Morgan she has since reconsidered using the ‘Wednesbury reasonable test’, and will use an alternative test, which is whether the outcome is safe.

However the Committee has expressed further concerns with the two-stage process of the review, stating that "filtering cases between the first and second stage could mean that a significant sample of cases will not be passed to Carol Brady to review".

The Committee said that if the sample is not significant in size, it will be "difficult to conclude whether there were systematic issues with case outcomes".

In response, FOS said that by linking the second stage to the first, it is "trying to focus on cases for which there might be the most concern about the outcome".

Nicky Morgan said: “The FOS’ decision to change how the outcome of cases in the second stage of the review will be assessed is welcome. ‘Wednesbury reasonableness’ set the bar far too high for cases in the second stage.

“However, the review remains too process-driven and doesn’t focus enough on case outcomes. Only 150 cases, or 1.9%, of the 8,000 cases from the relevant period will have their outcomes examined.

“It will be difficult, therefore, to conclude whether there were systematic issues with case outcomes if the sample in stage two is not significant in size.

“The Committee will no doubt examine these issues in further detail when it takes evidence from the FOS once the case review is completed in the New Year.”