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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Heather Moor & Edgecomb Ltd, R (on the application of) v Financial Ombudsman Service & Anor  EWCA Civ 642 (11 June 2008)
Cite as:  Bus LR 1486,  EWCA Civ 642
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
THE HON MR JUSTICE SIMON
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE RIX
LORD JUSTICE STANLEY BURNTON
| THE QUEEN on the application of HEATHER MOOR & EDGECOMB LIMITED
|- and -
|FINANCIAL OMBUDSMAN SERVICE
Charles Flint QC and James Strachan (instructed by the Financial Ombudsman Service) for the Respondent
Hearing dates : 23, 24 and 25 April 2008
Crown Copyright ©
Lord Justice Stanley Burnton :
(a) HME's advice to Mr Lodge
… I have illustrated Simon at 60 plus one day having worked for the 5 years with Airtours. His pension fund would have gone up to somewhere around £730,000 minimum based on 9% per annum growth which I believe is very modest (12% would produce £840,000).
To offer a brief summary, if it is possible (!) bearing in mind the circumstances Simon is now in with regards to the Airtours position and the opportunity of being given a command, I have to say that I would consider it illogical not to take up the option that British Airways are offering by way of the transfer value. … Being my usual frank and blunt self, I cannot see that there is any sound reason not to elect for the Section 32 Buy Out Plan. ….The point I wish to emphasise to you both is that we are in no way having to rely on a very heavy fund performance to achieve what I am suggesting to you is achievable under your present circumstances.
(b) The complaint to the Financial Ombudsman Service and the decision of the Ombudsman
1. Income drawdown relies [heavily] upon the premise that investment returns and annuity rates will improve or continue at an acceptable level, [sic] This has obviously not been the case.
2. The security and peace of mind of a good final salary pension with its associated benefits for dependant family members against a high risk investment scheme were not emphasised at any meetings.
3. The figures used to illustrate and sell me the drawdown plan were inflated or at least anything but [conservative]. Mr Pickering considered a fund growth rate of 9% p.a. to be a modest figure which has proved to be totally unreal. I am [reliably] informed that within the financial services industry at that time a sustainable growth figure of 9% would have been considered very optimistic.
Mr Lodge has considered that you failed to explain the risks inherent with investment performance and annuity rates. However, he consulted another independent financial adviser who mentioned both these aspects. He should, therefore, have been aware of these risks. For this reason, I am unable to uphold his complaint in this regard.
In addition, he has stated that the growth rates used in your projection were very optimistic. You repeatedly stressed that you considered 9% annual growth to be modest in light of past performance. As you will be aware, past performance should not be used as a guide to future performance.
It is widely recognised that occupational pension schemes, such as the (British Airways) New Airways Pension Scheme, offer greater security than either a Section 32 policy or a personal pension. That is not to say that transferring from an occupational pension scheme may not be advantageous. However, in making a recommendation to transfer, I would expect clear evidence that the differences had been explained. This would include the advantages and disadvantages as well as setting out compelling reasons for the transfer.
In my view, the various letters you wrote to Mr Lodge failed to adequately caution Mr Lodge of the risks associated with the transfer. While those risks may have been discussed during the various meetings, the letters do not give any balance between the advantages and disadvantages. Nor have you shown that all the options were properly considered.
When considering whether Mr Lodge was aware of the risks I have looked not just at the information provided but also at the investment funds you recommended. Mr Lodge had indicated that he was prepared to accept a medium amount of risk with the investment of the transfer value. However, the funds that you recommended did not [meet] your definition of medium risk and there is no evidence that Mr Lodge was aware of, or prepared to accept, the higher risk associated.
The transfer and the investment funds you recommended may, therefore, have been unsuitable.
I recommend that you carry out a loss assessment in accordance with the Pension Review methodology. If a loss is found to exist then redress should be paid in accordance with the Pension Review guidance.
Please let me know no later than 21 April 2004 if you are prepared to make such an offer to Mr Lodge. If you are unable to reply fully by then, please tell me how – with reasons.
A hearing can be helpful where the documentary evidence produced by both sides is contradictory. Mr Lodge has not produced any evidence that is considered contradictory and we do not, at this time, believe that a hearing would be advantageous.
Since this firm's "civil rights and obligations" are affected, we believe that we are entitled to a hearing, and, indeed, a public hearing – see Article 6 of the European Convention on Human Rights.
If The Financial Ombudsman Service does not accept that primary contention then in the alternative we say as follows. We are unclear whether Mr Lodge and Mr Ross now accept the factual evidence which we have presented, in particular accounts that we have given of meetings with Mr Pickering. If they dispute our evidence then a hearing is needed at which they can be cross-examined by counsel, and of course, at which our witnesses can also be cross-examined. We therefore suggest that The Financial Ombudsman Service ask Mr Lodge and Mr Ross whether they are prepared to accept our evidence.
Your reasons for requesting a hearing are that
- Article 6 of ECHR entitles you to one, and/or
- There may be disputed accounts of meetings and so a hearing will be needed, with cross-examination by counsel.
The Article 6 requirement does not have to be satisfied … at every stage of the process of determining "civil rights and obligations". The right to a hearing by way of judicial review of the Financial Ombudsman Service's decision remains open to you after you have received an ombudsman's decision. If you were right then a hearing would be required (if requested) in every case that reached the Financial Ombudsman Service. It is, I think, clear that more is needed than just that the case concerns civil rights and obligations.
At present it is not clear that there is a dispute about what was said at meetings or, if there is, whether the case would turn on resolving what was in fact said.
But if it was necessary to decide between disputed accounts, it does not follow that it would be necessary for witnesses to be heard in person or be cross-examined. The Financial Ombudsman Service has inquisitional powers. It may be that the dispute can be resolved by reference to other facts – rather than by testing the credibility of the witness. Even where held, oral hearings are intended to be informal and the procedure is set by the Ombudsman concerned. It is uncommon for there to be formal cross-examination. In the event of such a dispute I am not satisfied of the need for cross examination nor for a hearing.
"Some competent advisers would have recommended that Mr Lodge make a transfer …"
Opinion as to fairness and reasonableness
3.8.1 R (1) The Ombudsman will determine a complaint by reference to what is, in his opinion, fair and reasonable in all the circumstances of the case.
(2) In considering what is fair and reasonable in all the circumstances of the case, the Ombudsman will take into account the relevant law, regulations, regulators' rules and guidance and standards, relevant codes of practice and, where appropriate, what he considers to have been good industry practice at the relevant time.
The Ombudsman stated:
Although the firm has stated that it has been advised that Mr Lodge's complaint would not have been upheld in court, it has not submitted a copy of that advice or given further details as to the legal reasoning contained therein. While I have taken into account the relevant law, I have determined this complaint based on what, in my opinion, is fair and reasonable bearing in mind all the circumstances of this case.
The fact that Mr Lodge was willing to accept a medium degree of risk does not automatically mean that the recommendation to transfer into a medium risk fund in a Section 32 Buy Out policy was suitable. By transferring, Mr Lodge was exposed to more than just investment risk. The firm had established in 1999 before the transfer had taken place, that Mr Lodge would not be able to purchase the same annuity on the open market with the transfer value offered by the scheme. This is demonstrated in "The Retirement Options" report.
Mr Lodge, after the transfer, was immediately in the position that the value transferred could not secure benefits equivalent to those given up. This was because amongst other reasons NAPS used standard transfer factors and did not allow for the fact that Mrs Lodge was significantly younger than Mr Lodge. The difference in ages would have been reflected in the cost of buying an annuity that included any spouse's benefits. Mr Lodge was also exposed to risk after the transfer that any deterioration in annuity rates would further reduce his pension.
Of the assets listed above, I do not consider that the properties would have been considered as disposable in order to cover any shortfall in retirement provision. Excluding the matrimonial home, the transfer value of £549,103.54 represented a very significant proportion of Mr and Mrs Lodge's overall wealth.
Therefore I conclude that the risk associated with the transfer was significantly higher than medium.
Although the firm has provided a meeting note that refers to the late retirement factor, it has also provided a copy of its report to Mr Lodge setting out "The Retirement Options". As noted in the Provisional Decision, this report states that the deferred benefits would:
Increase annually by a combination of the Retail Price Index and rate of inflation capped to a maximum of 5% per annum" if the benefits were left in the scheme.
I consider that this report, since it is in written form, carries greater weight than any information provided verbally.
As noted in my Provisional Decision, the Financial Ombudsman Service has been informed that the late retirement factor for a deferment period of five years is 64.8%. Therefore, Mr Lodge would have enjoyed a significant increase in his pension had he not transferred from NAPS and deferred retirement until age 60. This would be to reflect the fact that the pension would be payable later and for a shorter time. I am not persuaded that Mr Lodge would have decided to transfer his benefits if he had been provided with projections showing the benefits that might be provided by the scheme, if he deferred taking his benefits to age 60. In my opinion, this would have been a key factor to investigate when considering whether to leave the benefits in the scheme rather than transfer. By understanding the increase in the deferred pension benefits in late retirement the firm made the option to remain within the NAPS much less attractive than it was.
Therefore, I cannot accept that the firm did not express any opinion on the potential to achieve the projected growth as it has suggested.
Sight of a projection showing benefits based on the new lower assumed growth rates of 5%, 7% and 9% set by the regulator in January 1999, rather than the higher previous growth rates of 6%, 9% and 12% might have caused Mr Lodge to express concern over the viability of the transfer. The use of the new lower projection rates would have caused Mr Lodge to question his understanding that 8% was achievable in a medium risk investment.
In the absence of any such projection, Mr Lodge would have had cause in 1999 to consider that the advice to transfer exposed him to a greater degree of risk than he had understood from the firm's comment on the projected growth after the transfer.
However, when considering whether the advice was consistent with good industry practice in 1999, I placed greater weight on the contemporaneous comments set out in a letter from another independent financial adviser to Mr Lodge dated 7 July 1999 and the well documented concerns about pensions mis-selling that had resulted in the industry-wide Pension Review.
In the letter of 7 July 1999, the adviser referred to the relatively generous widow's pension that formed part of a quite substantial benefits package that would "provide a good level of guaranteed income which is not dependant upon investment returns or annuity rates." The adviser also wrote that he believed growth of 9% a year was not a modest growth rate. However, whilst he noted that he was unable to give formal advice, he was "somewhat negative" about the advice given to Mr Lodge. I am not persuaded that the adviser was supportive of the advice given by the firm.
The statement dated 18 May 2005 made by the other adviser does not directly answer whether there was a respectable school of thought amongst investment advisers in 1999 that would have done other than advise Mr Lodge to retain his pension in NAPS. The respondent stated only that "some competent advisers" would have recommended transfer, referring in particular to the benefits that could be received by Mrs Lodge in the likely event that Mr Lodge would die before her.
I consider that a competent adviser would have established the value of the widow's benefit payable before recommending a transfer because of the large difference in the ages of Mr and Mrs Lodge and the potential requirement for any widow's pension to have been paid for a significant period. A competent adviser would also have looked at the benefits payable on late retirement from NAPS and compared those with the projected benefits from the Section 32 Buy Out Policy.
The respondent stated that:
"…the regulatory system discourages advisers from recommending transfer as to the best of my knowledge nobody has been ordered to pay compensation for saying 'stay put' even if the client dies early and the advice causes his estate to suffer a loss. Advisers know they run the risk of being found at fault for recommending a transfer but not for advising 'stay put'. There is a clear benefit to the adviser in advising a client to stay put."
I am satisfied, in my opinion, that good industry practice in 1999 would have been to recommend against transfer in the particular circumstances of this case.
In January 1999, the regulator issued instructions for firms to alter the assumed growth-rates used when producing projections. That same instruction requires firms to alter the generic rate for pensions from a range with a mid-rate of 9% to a range with a new lower mid-rate of 7%. Firms were given a period of grace in which to implement the change, although all firms were required to be using the new rates by 1 July 1999. However, in its letter of 9 July 1999, the firm provided no projections on the reduced mid-rate and restated that assumed growth of 9% was modest.
I had given due consideration to the firm's letter of 19 May 2005 prior to my Provisional Decision. Tony King, another ombudsman, considered the request for a hearing in his letter of 11 July 2005. He wrote that he was not satisfied of the need for a cross examination or for a hearing. I have seen nothing that would cause me to reach an alternative conclusion on the request for a hearing or on the request that the firm be allowed to cross examine Mr Lodge. The Financial Ombudsman Service has an inquisitorial role; it is not an adversarial process.
The benefits payable in the event of Mr Lodge's death rightly should have been considered when the firm recommended that Mr Lodge transfer. However those benefits should have been viewed against the risk that Mr Lodge might be worse off in retirement. Mr Lodge was known to be in excellent health and I am not convinced that it was appropriate for his pension benefits to be placed at risk in order to increase the potential death benefits.
As noted in the Provisional Decision, "The large age difference between Mr and Mrs Lodge, with only a small reduction in the widow's pension percentage would mean that the transfer value offered by NAPS represented poor value to Mr and Mrs Lodge". This factor alone would have made the decision to transfer questionable.
The loss of the value of the widow's pension that would have been paid by NAPS in the event of Mr Lodge's death would, in any case, have undermined any perceived increase in the potential death benefits resulting from the transfer.
The grounds for judicial review
(a) On its true construction, section 228(1) of the Financial Services and Markets Act 2000 requires FOS to determine complaints in accordance with the rules of English Law.
(b) That construction of the Act is required in order to avoid an infringement of the respondent's Convention rights under Article 6 and Article 1 of the First Protocol ("A1P1").
(c) In the present case, the Ombudsman failed to apply the rules of English Law, or to take them into account, but instead made a decision by reference to what he considered to be fair and reasonable. It follows that his decision falls to be quashed for error of law. For this reason, his decision was one that no reasonable Ombudsman could have made.
(d) In any event, the Ombudsman should have held an oral hearing in public, and he should have given his decision in public, but he wrongfully refused to do so.
The statutory framework
225 The scheme and the scheme operator
(1) This Part provides for a scheme under which certain disputes may be resolved quickly and with minimum formality by an independent person.
(2) The scheme is to be administered by a body corporate ("the scheme operator").
(3) The scheme is to be operated under a name chosen by the scheme operator but is referred to in this Act as "the ombudsman scheme".
(4) Schedule 17 makes provision in connection with the ombudsman scheme and the scheme operator.
228 Determination under the compulsory jurisdiction
(1) This section applies only in relation to the compulsory jurisdiction.
(2) A complaint is to be determined by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case.
(3) When the ombudsman has determined a complaint he must give a written statement of his determination to the respondent and to the complainant.
(4) The statement must–
(a) give the ombudsman's reasons for his determination;
(b) be signed by him; and
(c) require the complainant to notify him in writing, before a date specified in the statement, whether he accepts or rejects the determination.
(5) If the complainant notifies the ombudsman that he accepts the determination, it is binding on the respondent and the complainant and final.
(6) If, by the specified date, the complainant has not notified the ombudsman of his acceptance or rejection of the determination he is to be treated as having rejected it.
(7) The ombudsman must notify the respondent of the outcome.
(1) This section applies only in relation to the compulsory jurisdiction.
(2) If a complaint which has been dealt with under the scheme is determined in favour of the complainant, the determination may include–
(a) an award against the respondent of such amount as the ombudsman considers fair compensation for loss or damage (of a kind falling within subsection (3)) suffered by the complainant ("a money award");
(b) a direction that the respondent take such steps in relation to the complainant as the ombudsman considers just and appropriate (whether or not a court could order those steps to be taken).
(3) A money award may compensate for–
(a) financial loss; or
(b) any other loss, or any damage, of a specified kind.
(5) A money award may not exceed the monetary limit; but the ombudsman may, if he considers that fair compensation requires payment of a larger amount, recommend that the respondent pay the complainant the balance.
(6) The monetary limit is such amount as may be specified.
(7) Different amounts may be specified in relation to different kinds of complaint.
(11) "Specified" means specified in compulsory jurisdiction rules.
14 (1) The scheme operator must make rules, to be known as "scheme rules", which are to set out the procedure for reference of complaints and for their investigation, consideration and determination by an ombudsman.
(2) Scheme rules may, among other things–
(a) specify matters which are to be taken into account in determining whether an act or omission was fair and reasonable;
(d) make provision as to the evidence which may be required or admitted, the extent to which it should be oral or written and the consequences of a person's failure to produce any information or document which he has been required (under section 231 or otherwise) to produce;
(1) The Ombudsman will determine a complaint by reference to what is, in his opinion, fair and reasonable in all the circumstances of the case.
(2) In considering what is fair and reasonable in all the circumstances of the case, the Ombudsman will take into account the relevant law, regulations, regulators' rules and guidance and standards, relevant codes of practice and, where appropriate, what he considers to have been good industry practice at the relevant time.
Is the Ombudsman required to apply the law?
(1) The ordinary and natural meaning of section 228 is that the Ombudsman must decide in accordance with the law.
(2) If that is not so, section 3 of the Human Rights Act 1998 requires it to be so construed. If it is not so construed, the Ombudsman may decide cases arbitrarily and/or unpredictably, so that the requirements of Article 6 and of A1P1 of the Convention are not satisfied.
The power of the ombudsman to make a direction under subsection (2) is not confined to cases where the complainant may have a cause of action against the respondent for negligence.
13. Section 228(2) is at the heart of this case. It is to be noted that it does not require, as it might have done, a complaint to be determined in accordance with the law. The ombudsman is required to determine a complaint by reference to what is, in his opinion, fair and reasonable in all the circumstances of the case. The words "in the opinion of the ombudsman" themselves make it clear that he may be subjective in arriving at his opinion of what is fair and reasonable in all the circumstances of the case. Of course, if his opinion as to what is fair and reasonable in all the circumstances of the case is perverse or irrational, that opinion, and any determination made pursuant to it, is liable to be set aside on conventional judicial review grounds.
And later in my judgment:
74. The challenge made to the final decision turns entirely on the application of Rule 3.8.1 of the scheme. Mr Pooles (counsel for the claimant) accepted, and indeed in my judgment had to accept, that the scheme does not require the ombudsman to make a decision in accordance with English law. If the ombudsman considers that what is fair and reasonable differs from English law, or the result that there would be in English law, he is free to make an award in accordance with that view, assuming it to be a reasonable view in all the circumstances.
The Convention and the Rule of Law
In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.
Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
49. In the Court's opinion, the following are two of the requirements that flow from the expression "prescribed by law". Firstly, the law must be adequately accessible: the citizen must be able to have an indication that is adequate in the circumstances of the legal rules applicable to a given case. Secondly, a norm cannot be regarded as a "law" unless it is formulated with sufficient precision to enable the citizen to regulate his conduct: he must be able - if need be with appropriate advice - to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail. Those consequences need not be foreseeable with absolute certainty: experience shows this to be unattainable. Again, whilst certainty is highly desirable, it may bring in its train excessive rigidity and the law must be able to keep pace with changing circumstances. Accordingly, many laws are inevitably couched in terms which, to a greater or lesser extent, are vague and whose interpretation and application are questions of practice.
… if aspects of common law seem to the judges manifestly wrong, while they are bound by the doctrine of precedent, their only route to changing it is to purport to "find" what the "true" law was all along. By contrast, if we need to change, we do so openly, giving as much notice as we can and saying why. The ombudsmen are not bound by the doctrine of precedent, but we do aim for consistency. …
Our "fair and reasonable" jurisdiction has attracted a fair amount of attention. It allows us to look beyond the law, beyond wording of the small print, to take into account the large print in the promotional materials, good industry practice, and, if necessary, adopt a modern and fairer approach where it is clear that the law has lagged behind. This is not dissimilar to the approach of the regulations governing Unfair Terms in Consumer Contracts, except that we can look at core terms of a contract which are specifically excluded from the ambit of the regulations. … Some time ago the insurance ombudsman adopted the continental doctrine of proportionality to deal with cases where the consequence of policy cancellation following a minor non-disclosure would be unduly harsh - a proposal made by the Law Commission but never adopted in English law. Where therefore a policyholder has without fraudulent intent failed to inform an insurer of a fact that would have increased his premium, the result that we apply (but the courts would not) is that his claim should not be rejected entirely, but be paid subject to a reduction proportionate to the premium he should have paid.
Did the Ombudsman depart from the law in this case?
My Lords, I agree with these submissions to the extent that, in my view, the court is not bound to hold that a defendant doctor escapes liability for negligent treatment or diagnosis just because he leads evidence from a number of medical experts who are genuinely of opinion that the defendant's treatment or diagnosis accorded with sound medical practice. In the Bolam case itself, McNair J.  1 W.L.R. 583, 587 stated that the defendant had to have acted in accordance with the practice accepted as proper by a "responsible body of medical men." Later, at p. 588, he referred to "a standard of practice recognised as proper by a competent reasonable body of opinion." Again, in the passage which I have cited from Maynard's case  1 W.L.R. 634, 639, Lord Scarman refers to a "respectable" body of professional opinion. The use of these adjectives - responsible, reasonable and respectable - all show that the court has to be satisfied that the exponents of the body of opinion relied upon can demonstrate that such opinion has a logical basis. In particular in cases involving, as they so often do, the weighing of risks against benefits, the judge before accepting a body of opinion as being responsible, reasonable or respectable, will need to be satisfied that, in forming their views, the experts have directed their minds to the question of comparative risks and benefits and have reached a defensible conclusion on the matter.
Was the Ombudsman required to hold an oral and/or public hearing?
3.2.13 R A party who wishes to request a hearing must do so in writing, setting out the issues he wishes to raise and (if appropriate) any reasons why he considers the hearing should be in private, so that the Ombudsman may consider whether the issues are material, whether a hearing should take place and, if so, whether it should be held in public or private.
3.2.14 G In deciding if there should be a hearing and, if so, whether it should be in public or private, the Ombudsman will have regard to the provisions of the European Convention on Human Rights.
(As elsewhere in DISP, R indicates a rule and G guidance. Thus paragraph 3.2.13 is the rule; paragraph 3.2.14 is guidance as to the application of the rule.) DISP 3.5.1 R authorises the ombudsman to give directions as to the extent to which the evidence required to determine a complaint should be oral or written.
45. The question under this head is whether the claimant was entitled to an oral hearing in either case either before the Adjudicator (or equivalent) at first instance or before the Adjudication Panel on appeal. The duty of each was to act fairly. What is fair depends upon the circumstances of the particular case. I can imagine circumstances in which an adjudicator or appeal panel might think it appropriate to hold an oral hearing and there may even be cases in which the court would intervene to quash a decision refusing to do so.
46. The relevant principles have recently been considered by this court in Smith v The Parole Board  EWCA Civ 1269, where this court considered and rejected a submission that the Parole Board should have held an oral hearing. In that context, in paragraph 37 Kennedy LJ approved the following test proposed by counsel. An oral hearing should be ordered where there is a disputed issue of fact which is central to the Board's assessment and which cannot fairly be resolved without hearing oral evidence. In the present context it is to my mind difficult to think of such an issue, but nothing is impossible.
47. …the claimant did ask for an oral hearing before the Adjudication Panel. However, the Law Society was in my judgment entitled to leave it to the panel to decide whether to accede to an application for an oral hearing. In reaching its conclusion the panel or (in a case where an application is made to the adjudicator) the adjudicator must of course act fairly. However, the documents show that the Adjudication Panel gave careful consideration to the application for an oral hearing and gave reasons for its refusal of it. It seems to me to be clear that, although its decision was made long before the decision in Smith v The Parole Board, the Adjudication Panel essentially applied the test approved there. As stated above, it decided that a hearing was not necessary because the matter was not one of such complexity as to warrant an oral hearing and the written evidence was sufficiently detailed. It plainly considered that fairness did not require an oral hearing and that the issues could fairly be resolved on the documents.
49. In Smith v The Parole Board the court emphasised in that context the principles applied by the House of Lords in R v Secretary of State for the Home Department ex p Doody  1 AC 531 per Lord Mustill at pages 560D-561A, which was concerned with the case where an Act of Parliament has conferred an administrative power. It seems to me that similar principles apply here. In particular, for present purposes I should I think refer to an important principle in Lord Mustill's speech which was followed in Smith. He expressed it thus:
" …. The respondents acknowledge that it is not enough to persuade the court that some procedure other than the one adopted by the decision-maker would be better or more fair. Rather, they must show that the procedure is unfair. The court must constantly bear in mind that it is to the decision maker, not the court, that Parliament had entrusted not only the making of the decision but also the choice as to how the decision is made".
50. In my opinion, that approach applies equally to the challenge in this case. To succeed the claimant would have to show that the procedure adopted was unfair. In this case, the only question before this court at common law is, as I see it, whether he can show, in the case of each decision impugned, that it was unfair to make it on the documents without any form of oral hearing.
51. I have reached the clear conclusion that he cannot. As already stated, my conclusion is that each of the complaints could be fairly determined on the documents. The same is in my opinion true in Mrs Anderson's case. As explained earlier, whatever view the claimant may hold (or have held), he was not being accused of dishonesty. It was to my mind an entirely sensible decision to determine the complaints on the documents, of which there were many. There was no need for an oral hearing or oral evidence. Moreover, the Adjudication Panel applied the correct test in refusing the claimant's application and in any event the decision cannot be impugned as unfair or unlawful by whatever test is adopted. That is for the simple reason (as I see it) that there was no disputed issue of fact which was central to the Adjudication Panel's assessment in her case and which could not fairly be resolved without hearing oral evidence and without an oral hearing (my emphasis).
69. The key point as a matter of principle is that the question whether the procedure satisfies article 6(1), where there is a determination of civil rights and obligations, must be answered by reference to the whole process. The question in each case is whether the process involves a court or courts having "full jurisdiction to deal with the case as the nature of the decision requires". There may be cases in which a public and oral hearing is required at first instance and other cases where it is not, just as there may be cases in which the potential availability of judicial review will not be sufficient to avoid a breach of article 6(1).
Having referred to the jurisprudence of the European Court of Human Rights, he continued:
72. In the context of a case like the present, the position was well put by Lord Mackay of Drumadoon in the Court of Session in Tehrani v United Kingdom v Central Council for Nursing Midwifery and Health Visiting  IRLR 208, which is discussed in more detail below. He summarised the position referable to disciplinary tribunals in this way in paragraph 55:
"In my opinion, cases such as Le Compte, Van Leuven and De Meyere, Albert and Le Compte and Bryan establish that, as far such tribunals are concerned, no breach of the Convention arises if the tribunal is subject to control by a court that has full jurisdiction and itself complies with the requirements of Article 6(1). In other words, when dealing with a disciplinary tribunal, such as the PCC, a right of appeal to a court of full jurisdiction does not purge a breach of the Convention. It prevents such a breach from occurring in the first place."
I entirely agree. …
73. We were also referred to statements in some textbooks but to my mind none of them carries the matter any further. In short, all depends upon the circumstances.
40. An oral, and public, hearing constitutes a fundamental principle enshrined in Article 6 § 1. This principle is particularly important in the criminal context, where generally there must be at first instance a tribunal which fully meets the requirements of Article 6 (see Findlay v. the United Kingdom, judgment of 25 February 1997, Reports of Judgments and Decisions 1997-I, § 79) and where an applicant has an entitlement to have his case "heard", with the opportunity inter alia to give evidence in his own defence, hear the evidence against him and examine and cross-examine the witnesses.
41. That said, the obligation to hold a hearing is not absolute (see Håkansson and Sturesson v. Sweden, judgment of 21 February 1990, Series A no. 171-A, § 66). There may be proceedings in which an oral hearing may not be required: for example where there are no issues of credibility or contested facts which necessitate a hearing and the courts may fairly and reasonably decide the case on the basis of the parties' submissions and other written materials (see, for example, Döry v. Sweden, no. 28394/95, § 37, 12 November 2002; Pursiheimo v. Finland (dec.), no. 57795/00, 25 November 2003; cf. Lundevall v. Sweden, no. 38629/97, § 39, 12 November 2002 and Salomonsson v. Sweden, no. 38978/97, § 39, 12 November 2002, and see also Göç v. Turkey [GC], no. 36590/97, § 51, ECHR 2002-V, where the applicant should have been heard on elements of personal suffering relevant to levels of compensation).
42. The Court has further acknowledged that the national authorities may have regard to the demands of efficiency and economy and found, for example, that the systematic holding of hearings could be an obstacle to the particular diligence required in social security cases and ultimately prevent compliance with the reasonable time requirement of Article 6 § 1 (see Schuler-Zgraggen v. Switzerland, judgment of 24 June 1993, Series A no. 263, § 58 and the cases cited therein). Although the earlier cases emphasised that a hearing must be held before a court of first and only instance unless there were exceptional circumstances that justified dispensing with one (see, for instance, Håkansson and Sturesson v. Sweden, cited above, p. 20, § 64; Fredin v. Sweden (no. 2), judgment of 23 February 1994, Series A no. 283-A, pp. 10-11, §§ 21-22; and Allan Jacobsson v. Sweden (no. 2) judgment of 19 February 1998, Reports 1998-I, p. 168, § 46), the Court has clarified that the character of the circumstances that may justify dispensing with an oral hearing essentially comes down to the nature of the issues to be decided by the competent national court, not to the frequency of such situations. It does not mean that refusing to hold an oral hearing may be justified only in rare cases (see Miller v. Sweden, no. 55853/00, § 29, 8 February 2005). The overarching principle of fairness embodied in Article 6 is, as always, the key consideration (see, mutatis mutandis, Pélissier and Sassi v. France [GC], no. 25444/94, § 52, ECHR 1999-II; Sejdovic v. Italy [GC], no. 56581/00, § 90, ECHR 2006-...).
46. In the present case, the applicant's purpose in requesting a hearing was to challenge the reliability and accuracy of the report on the tax inspection by cross-examining the tax inspector and obtaining supporting testimony from his own expert since, in his view, the tax inspector had misinterpreted the requirements laid down by the relevant legislation and given an inaccurate account of his financial state. His reasons for requesting a hearing therefore concerned in large part the validity of the tax assessment, which as such fell outside the scope of Article 6, although there was the additional question of whether the applicant's bookkeeping had been so deficient so as to justify a surcharge. The Administrative Court, which took the measure of inviting written observations from the tax inspector and after that a statement from an expert chosen by the applicant, found in the circumstances that an oral hearing was manifestly unnecessary as the information provided by the applicant himself formed a sufficient factual basis for the consideration of the case.
47. The Court does not doubt that checking and ensuring that the taxpayer has given an accurate account of his or her affairs and that supporting documents have been properly produced may often be more efficiently dealt with in writing than in oral argument. Nor is it persuaded by the applicant that in this particular case any issues of credibility arose in the proceedings which required oral presentation of evidence or cross-examination of witnesses and it finds force in the Government's argument that any issues of fact and law could be adequately addressed in, and decided on the basis of, written submissions.
48. The Court further observes that the applicant was not denied the possibility of requesting an oral hearing, although it was for the courts to decide whether a hearing was necessary (see, mutatis mutandis, Martinie v. France [GC], no. 58675/00, § 44, 12 April 2006). The Administrative Court gave such consideration with reasons. The Court also notes the minor sum of money at stake. Since the applicant was given ample opportunity to put forward his case in writing and to comment on the submissions of the tax authority, the Court finds that the requirements of fairness were complied with and did not, in the particular circumstances of this case, necessitate an oral hearing.
49. There has, accordingly, been no violation of Article 6 § 1 of the Convention.
3.10.1 R (1) In dealing with any information received in relation to the consideration or investigation of a complaint, the Financial Ombudsman Service must have regard to the parties' rights of privacy.
(2) Paragraph (1) does not prevent the Ombudsman disclosing information (either in full, or where he considers it necessary or appropriate under DISP 3.5.2R (2), in the form of an edited version or (where this is not practicable) a summary or description):
(a) to the extent that he is required or authorised to do so by law; or
(b) to the parties to the complaint; or
(c) in his determination; or
(d) at a hearing in connection with the complaint.
1. The Court has frequently emphasised the importance of the public character of proceedings. It protects litigants against the administration of justice in secret with no public scrutiny; it is also one of the means whereby confidence in the courts is maintained. By rendering the administration of justice visible, publicity contributes to the achievement of the aim of Article 6 § 1, a fair hearing, the guarantee of which is one of the foundations of a democratic society (see as the most recent authority, B. and Pickering. v. the United Kingdom, nos. 36337/97 and 35974/97, 24.4.2001, § 36, to be published in ECHR 2001).
2. Nevertheless, the Court has applied the requirement of the public pronouncement of judgments with some degree of flexibility. Thus, it has held that despite the wording which would seem to suggest that reading out in open court is required, other means of rendering a judgment public may be compatible with Article 6 § 1. As a general rule, the form of publicity to be given to the judgment under domestic law must be assessed in the light of the special features of the proceedings in question and by reference to the object and purpose of Article 6 § 1. In making this assessment, account must be taken of the entirety of the proceedings (see the Pretto and Others v. Italy judgment of 8 December 1983, Series A no. 71, p. 12, §§ 25-27, and the Axen v. Germany judgment of 8 December 1983, Series A no. 72, pp. 13-14, §§ 30-32; see also, B. and Pickering. v. the United Kingdom, previously cited, § 45).
3. Further, it does not follow from the Court's case-law that the public delivery of a judgment is required at each level of jurisdiction, as the applicant seems to suggest. On the one hand, for instance in the Axen case, the Court found that public delivery of a supreme court decision was unnecessary, given that the judgment of the lower court had been pronounced publicly (ibid., § 32). On the other hand, in the Szücs and Werner cases, the Court found a violation of Article 6 § 1 as none of the decisions given in the proceedings under the 1969 Act had been delivered publicly and publicity was not sufficiently ensured by other means (see the Szücs judgment, previously cited, p. 2482, § 48, and the Werner judgment, also previously cited, p. 2513, § 60).
4. In the present case, the Salzburg Regional Court's decision of 10 October 1994 – although taken after a public hearing of the applicant's compensation claim – was not delivered publicly as it was dependent on his acquittal becoming final. Instead, it was served in writing on 4 November 1994. The decision by the Linz Court of Appeal of 1 February 1995, which contained a summary of the Regional Court's decision, confirmed its application of section 2 § 1 (b) of the 1969 Act and rendered its decision final, was initially also delivered in writing and was not rendered public by any other means. However, following the Supreme Court's judgment of 9 November 2000, it was delivered publicly on 9 February 2001.
5. Having regard to the compensation proceedings as a whole as well as to their specific features, the Court finds that the purpose of Article 6 § 1, namely subjecting court decisions to public scrutiny, thus enabling the public to study the manner in which the courts generally approach compensation claims for detention on remand, was achieved in the present case by the public delivery of the appellate court's judgment.
Accordingly, there has been no violation of Article 6 § 1 of the Convention.
3.3.1A R The Ombudsman may dismiss a complaint without considering its merits if:
(1) before he has made a determination, he has received in writing from the firm or licensee:
(a) a detailed statement of how and why, in the firm's or licensee's opinion, the complaint raises an important or novel point of law with significant consequences; and
(b) an undertaking in favour of the complainant that, if the complainant or the firm or the licensee commences court proceedings against the other in respect of the complaint in any court in the United Kingdom, within six months of the complaint being dismissed, the firm or licensee will: pay the complainant's reasonable costs and disbursements (to be assessed if not agreed on an indemnity basis) in connection with the proceedings at first instance and any subsequent appeal proceedings brought by the firm or licensee; and make interim payments on account of such costs if and to the extent that it appears reasonable to do so; and
(2) the Ombudsman considers that the complaint:
(a) raises an important or novel point of law, which has important consequences; and
(b) would more suitably be dealt with by a court as a test case.
FOS had published guidance under this rule, which it is unnecessary to refer to.
Lord Justice Rix :
"In considering what is fair and reasonable in all the circumstances of the case, the Ombudsman will take into account the relevant law, regulations, regulators' rules and guidance and standards, relevant codes of practice and, where appropriate, what he considers to have been good industry practice at the relevant time."
"Our "fair and reasonable" jurisdiction has attracted a fair amount of attention. It allows us to look beyond the law, beyond wording of the small print, to take into account the large print in the promotional materials, good industry practice, and, if necessary, adopt a modern and fairer approach where it is clear that the law has lagged behind."
"While the idea of an ombudsman who can redress the balance of power in favour of consumers of important services has its appeals, it runs contrary to modern western views of formally rational justice and the rule of law. The fact that ombudsmen are created to redress inequalities is not a relevant consideration to formal justice that treats rich and poor alike: wealthy respondents deserve as much respect for their legal rights as poor complainants. The rule of law does not sit easily with concepts of individuated justice, for example those based on the sense of equity of an experienced official…
One must not exaggerate the importance of these objections…This is, at least in part, a recognition that formal justice and the rule of law reproduce structural inequalities, favouring those parties who can most easily configure their private rights and obligations and seek to have them enforced through the courts. A corporation which is held to standards of fairness that were not known by it prior to an ombudsman's determination may cry "foul", but its position is not necessarily worse than that suffered by an individual who finds that his rights and duties bear no relation to his reasonable expectations. As in other areas of public law, one looks for a pragmatic resolution of these oppositions…"
"5.18 In the context of developing FOSBOOK, I have considered how far individual case decisions should be published. As noted in my call for evidence document, FOS practice on this issue is relatively conservative compared to some of its sister services overseas, some of whom publish all decisions in full, and some other UK Ombudsmen, who publish summaries of all their decisions. Swiss Re UK urged me to recommend full publication to help provide reassurance of consistency of decision-making, but they were a lone voice in the debate. Other respondents from both industry and consumer worlds argued against. Some arguments were practical: volumes would simply be too large to manage. Others started from the principle that no decision should be seen as precedent-setting and argued that publication could create false and undesirable misapprehension. I agree strongly with the practical point. I return to the second below, in discussing test cases.
5.19 I do not, however, see how the FOS can become more transparent without significantly more decisions being published, and those decisions being published in full, rather than in summary form. I believe that decisions need to be published for two purposes:
• first, in the context of FOSBOOK, to guide practitioners about developing FOS thinking and practice;
• secondly, to facilitate debate on the evolution of practice over time…
5.20 I therefore recommend that the FOS should:
• select and publish suitable decisions in full, but anonymised, form in FOSBOOK, to show the relationships between the broad principles applied to resolution of categories of cases and their application in practice;
• commission and publish regular academic analysis of the full range of Ombudsman decisions alongside future independent reviews."
Lord Justice Laws: