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
Results are out for the latest sitting of the ASIC financial advice exam, with the pass rate falling for the second consecutive sitting.
Adviser losses for the end of June have come in 143 per cent higher than the same period last year, and bring the total June loss to over 350.
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay.
