Three recent determinations by the FAIS Ombud varied from what one has become accustomed to over the years.
Cornelissen
The Cornelissen case, which hinged around a dispute regarding the calculation of costs, concluded as follows:
“On the record before me it is not possible to reject any of the disputed versions as improbable. In particular I can neither accept nor reject complainant’s calculations.”
“In the premises I am compelled to deal with this matter in terms of section 27 (3) (c) of the Act which provides as follows: The Ombud may on reasonable grounds determine that it is more appropriate that the complaint be dealt with by a Court or through any other available dispute resolution process, and decline to entertain the complaint.”
“This dispute cannot be reasonably dealt with in this Office as, for reasons set out above, the parties require an adversarial hearing to resolve material disputes of fact. Such a hearing is available in our courts of law. I am therefore compelled to decline to determine this dispute and complainant must institute action in an appropriate court.”
Van Schalkwyk
The same section of the Act was recently employed by the Ombud in the Van Schalkwyk case:
“Based on an analysis of the information provided by the parties, I find that there are reasonable grounds for me to determine that it is more appropriate for this complaint to be dealt with by a court.”
“It is important for me to state that, in the light of the evidence before me, it will be inappropriate and even possibly unfair for me to make any finding regarding the conduct of the respondent. Accordingly I make no finding in respect of respondent’s conduct as FSP.”
“In the premises, I make the following order:
- It is appropriate that this complaint be dealt with by a court;
- The complaint is dismissed.”
Phoshera
This case concerned a claim that was declined as the insured’s vehicle was not roadworthy. He complained that the intermediary did not notify him of a change in insurer. The case was dismissed as the reason for the claim being refuted was worn tyres, and no insurer would have entertained the claim.
Some Observations
- The recently published 2015 annual report of the Long-term Ombud made reference to “unreasonable complainants”. The reasons for unreasonable conduct include anger, frustration and an exaggerated sense of entitlement. Some complainants claim to be seeking “justice” or “a moral outcome” and they often appear to focus rigidly on a “principle”. Such complainants can make it difficult for the office of the Ombud to comply with its mandate “…to resolve disputes between financial services providers and their clients in a procedurally fair, informal, economical and expeditious manner.”
The outcome for complainants in the first two cases appears to imply that they will have to follow the normal, costly legal route, which defeats the mandate outlined above. The FSB Appeal Board can be approached by “…any person aggrieved by a determination of the Ombud for Financial Services Providers (FAIS Ombud) made in terms of section 28 of the Financial Advisory and Intermediary Services Act…”. No new evidence may be presented, though
The question is whether or not the condition of the tyres was relevant in causing the loss. Surely in order for a claim to be fairly declined for the reason of smooth tyres, the tyres must have been the reason, or contributed to the reason that the loss took place. For example, smooth tyres are irrelevant when an insured’s car is hit while stationary at a robot, but may be very relevant when a car travelling at speed skids on a wet road. Unfortunately there are insurers that will use lack of roadworthiness to reject a claim whether the condition of the car is relevant or not, hence we need TCF legislation.