The basic structure of the process of an investigation by the Ombudsman is laid down in ss149 and 150 of the Pension Schemes Act 1993 ("PSA").
Section 149(4) of PSA summarises the role of the Ombudsman in investigations:
"... the procedure for conducting such an investigation shall be such as the Pensions Ombudsman considers appropriate in the circumstances of the case; and he may, in particular, obtain information from such persons and in such manner, and make such enquiries, as he thinks fit."
The whole process is very different to traditional litigation before the courts. Instead of the adjudicator adopting a fairly passive role, being fed facts and arguments by the lawyers acting for the parties, the Ombudsman's role can be (but is not always) more inquisitorial. Very often the parties never have any contact directly with each other during the whole investigation process. His investigators can decide on what questions to ask the parties and what documents to request. David Laverick has encouraged his investigators to telephone parties for more information when appropriate and he has even had some face to face meetings with parties.
The rules relating to the investigation procedure are contained in the Personal and Occupational Pension Schemes (Pensions Ombudsman) (Procedure) Rules 1995 ("the Rules"), as amended by the Personal and Occupational Pension Schemes (Pensions Ombudsman) (Procedure) Amendment Rules 1996. The Rules were devised after consultation with the Council on Tribunals under the Tribunals and Inquiries Act 1992.
Details from Complainant
Rule 2(1) provides that details of a complaint or dispute must be referred to the Ombudsman in writing. The Ombudsman has devised a standard form for this purpose. The Rules require that the following information is provided:
(a) the name and address of the complainant
(b) the name and address of the respondent
(c) the facts relating to the complaint or dispute
(d) whether or not the complaint or dispute has been brought to the attention of the Pensions Advisory Service (OPAS)
(e) the name, address and profession of the representative (if any) of the complainant and whether this is the address for correspondence to the complainant for the purposes of the investigation.
Rule 3 permits a complainant to submit a supplementary statement or amend the details of his complaint or dispute or his supplementary statement at any time provided the Ombudsman gives leave (which must not be unreasonably refused). So as with pleadings in traditional litigation, the substance of the claim and the way it is expressed can, and often does, evolve as the case progresses.
Walker J in [1997] PLR 157 illustrated the fluidity of the process compared to litigation when he said the precise terms of the complaints were "not of central importance, since the Ombudsman rightly did not treat them as a formal pleading limiting the scope of his investigation."
As most complainants have been dealt with by OPAS before they reach the Ombudsman, the OPAS adviser will often be able to assist the complainant in framing their complaint. However, the Ombudsman does not require that complaints be expressed in a legal or technical way. This is of great benefit to complainants but often leads to respondents having to think carefully about what exactly is the substance of a claim. Dr Farrand said that it is perfectly proper for respondents to ask the Ombudsman to identify at an early stage the key issues raised by a complainant.
Under r5(1) the Ombudsman must send the complainant or his representative an acknowledgement of receipt.
Withdrawal of complaint or dispute
Under r4 a complainant may withdraw his complaint or dispute:
(a) within 14 days of when he receives a copy of the respondent's reply (see below) by sending the Ombudsman a notice confirming his withdrawal signed by himself or his representative; or
(b) after that with the leave of the Ombudsman (which must not be unreasonably refused).
In practice a complainant is usually able to withdraw his complaint at any point.
Action by Respondent
Under r5(2) the Ombudsman must supply the respondent with a copy of the details of the complaint or dispute together with any amendments or supplementary statements, written representations or other documents received from the complainant.
Rule 6(1) provides:
"Upon receiving a copy of the details of a complaint or dispute the respondent shall deliver to the Pensions Ombudsman a written reply acknowledging receipt of the details and stating -
(a) the facts relating to the complaint or dispute, whether or not the respondent opposes the allegations made in the complaint or dispute and any details on which it relies in opposing those allegations;
(b) whether in the opinion of the respondent, any other person has a direct interest in the subject matter of the complaint or dispute and if so the name and address of such other person;
(c) the name, address and profession of the representative (if any) of the respondent and whether such address is the address for correspondence to the respondent for the purposes of the investigation."
The reply must be delivered to the Ombudsman within 21 days after the date on which the copy of the details of the complaint or dispute was received by the respondent (r6(3)). There is power for the Ombudsman to extend this time limit under r16(1)(a).
The respondent must send the Ombudsman sufficient additional copies of the reply to enable him to send copies to the complainant and any other person named by the respondent as having a direct interest in the subject matter of the case.
Quite often there are insufficient details in the summary of the complaint or dispute to enable a respondent to properly reply. Rule 6(4) allows a respondent in its reply or in a separate notice to the Ombudsman submitted within the 21 day reply period to request further particulars of the complaint or dispute or a determination of any question as a preliminary issue. This is a very useful provision which will often help to avoid wasted effort dealing with irrelevant claims or allegations or trying to cover every interpretation of a vague claim or allegation.
Lightman J held in [1999] All ER 1206 that there is no right of appeal under PSA 1993 from decisions on preliminary issues (or, indeed, from the Ombudsman's preliminary conclusions).
Just like a complainant, a respondent can at any time submit a supplementary statement or amend any reply or supplementary statement with the leave of the Ombudsman, which must not be unreasonably refused (r7(1)). If the respondent does so, he must send the Ombudsman sufficient copies to circulate to the complainant and any other person named by the respondent as having a direct interest in the case.
If no reply is received by the Ombudsman within the 21 day period or any extension allowed by the Ombudsman, or if the respondent does not oppose or withdraws his opposition to the allegations, the Ombudsman may determine the complaint or dispute immediately, provided there is no other opposition to the allegations, for example from other respondents (r8).
The Ombudsman's procedures and investigatory practices have been scrutinised by the courts.
In , the Court of Session upheld the Ombudsman's discretion to base his decision on whether a member qualified for ill-health retirement on the information which was already available to him from a tribunal decision. He was not required to conduct a further investigation. The Court also said that the Ombudsman’s powers of investigation were very wide and he had a wide discretion to decide how best to use it.
The courts provided further guidance to the Ombudsman in . Where a complainant has not complained of maladministration to the Ombudsman, the Ombudsman has no statutory jurisdiction to make any finding in relation to maladministration. The court also said that in cases where a finding of maladministration was likely to be made against a person, that person was entitled to fair notice of that decision.
In [2002] PLR 99 Legal & General had asked for two extensions of the three week time limit given to respond to the Ombudsman's preliminary conclusions, as its counsel and actuary were on holiday. The Ombudsman refused the extension, apparently for reasons of administrative convenience in the Ombudsman's office. The High Court held that Legal & General would clearly be prejudiced by not being able to have the benefit of the views of its advisers and this clearly outweighed any detriment suffered by anyone in delaying the matter. It therefore seems that administrative convenience will not be an acceptable basis on which the Ombudsman can make his decisions about, for example, extensions of time, where other parties would be prejudiced by that decision.
There is no set formula for the presentation of a response to the Ombudsman. The Association of Pension Lawyers published a useful guidance note for investigations in March 1999 which was updated in May 2000 (copy available at www.apl.org.uk). The Pensions Litigation Committee of the APL considers that it is generally preferable to use a formal submission rather than a letter, though letters may be appropriate if dealing with short points raised by the Ombudsman's office. A useful suggestion by the Committee is to number all paragraphs in the body of the submission. This will help with cross-referencing later on in the investigation.
On a very practical level, the Ombudsman's office uses four hole ring- binders for investigations and so there is nothing to be gained by using expensive binding for the submission. Another important point at a practical level is that the Ombudsman's office does not usually keep any chronological bundle of documentation relating to the complaint in the way that a court would normally have a chronological "trial bundle". This means that considerable cross-reference will be needed to previous submissions; the Ombudsman's office prefers not to be sent extra copies of documentation already before it, although judicious use of such duplication will sometimes be in the interests of clarity for all parties.
Finally, the Committee suggested that wherever possible a response to a complaint by a respondent should be drafted in the following order:
1. List of enclosures.
2. Executive summary.
3. Jurisdiction.
4. Facts.
5. Legal analysis.
6. Other parties.
Although not appropriate to all cases, the above list does provide a useful checklist of the items which should be covered.
