Although the Ombudsman has power to conduct oral hearings as part of his investigations, these are extremely rare. However, rr10 to 15A of the Occupational Pension Schemes (Pensions Ombudsman) (Procedure) Rules 1995 set out in detail the procedure to be followed at any hearing.
Rule 10(1) confirms the Ombudsman's discretion to conduct an oral hearing whenever he considers it appropriate. He must have due regard to the convenience of the parties when fixing the time and place of any such hearing and give at least 21 days notice of the time and place of the hearing (or such shorter time if the parties agree).
The Ombudsman should also include in or with the notice of hearing -
"(a) information as to attendance at the hearing of the parties and witnesses, the bringing of documents and the right to representation by another person;
(b) a statement explaining -
(i) the right of any party to the investigation, who does not attend and is not represented, to make representations in writing; and
(ii) the possible consequences of non-attendance." (r10(2)).
The Ombudsman can alter the time and place of any hearing by giving the parties at least seven days notice (r10 (3)).
If the Ombudsman adjourns any hearing then no further notice is required provided he has announced the time and place of the reconvening of the hearing before the adjournment (r10(4)).
Each party to the investigation must inform the Ombudsman whether or not he intends to attend or be represented and whether or not he intends to call witnesses (r11(1)). If a party does not wish to attend or be represented, he can send additional written representations to the Ombudsman (r11(2)).
Hearings should generally be in public except where:
"... by reason of the disclosure of any matter that relates to intimate personal or financial circumstances, is commercially sensitive, consists of information communicated or obtained in confidence or concerns national security, it is just and reasonable for the hearing or any part thereof to be in private." (r12(1)).
The Ombudsman can exclude any person whose conduct has disrupted or is likely to disrupt the hearing (r12(4)).
Provided that the party has been properly notified, the Ombudsman can conduct a hearing and determine a complaint or dispute even if the party fails to attend or be represented at a hearing. Alternatively, the Ombudsman can (and most likely would) adjourn the hearing (r13(1)). The Ombudsman must consider any written representations submitted by an absent party before coming to his decision.
At the hearing a party can conduct his case himself or may be represented by any person whether or not legally qualified provided that where there are good and sufficient reasons for doing so the Ombudsman may refuse to permit a particular person to assist or represent the party at the hearing (r14).
Rule 15(2) highlights the intended difference between court proceedings and Ombudsman investigations. It provides that the Ombudsman "shall so far as seems appropriate seek to avoid formality in the hearing." He can therefore conduct the hearing in such manner as he considers appropriate to the clarification of the issues and the just handling of the investigation.
He must explain the order of proceeding at the beginning of the hearing (r15(1)) and can decide in which order the parties shall be heard (r15 (3)).
The parties are entitled to give evidence, call witnesses, question any party to the investigation or witnesses and address the Ombudsman on evidence and generally on the subject matter of the investigation (r15(3)).
Where the Ombudsman considers it appropriate, evidence may be given by affidavit or written statement but the Ombudsman can at any stage of the hearing require attendance by the person who has sworn the affidavit or made a written statement (r15(4)).
The Ombudsman can accept as evidence any fact which he considers relevant even if such evidence would be inadmissible in proceedings before a court. He must admit evidence which is admissible at law and is relevant (r15 (5)).
Rule 15A was inserted by the Personal and Occupational Pension Schemes (Pensions Ombudsman) (Procedure) Amendment Rules 1996. It gives the Ombudsman power to reimburse reasonable travel and subsistence expenses and compensation for lost earnings. The rule is quite detailed and reference should be made to it if an expenses claim is being considered. In any event, under r15A(9) the Ombudsman must provide an actual or potential beneficiary who has made the complaint or referred the dispute with full particulars of the arrangements made for travel and subsistence of expenses and compensation for lost earnings.
The Ombudsman commented in his Annual Report 1995/96 that "oral hearings may be held where it seems to me necessary to test credibility for the purpose of reaching findings of fact. During the year only one such hearing was held as against two last year. The complaint in question was upheld." Therefore oral hearings have so far been quite rare.
In case E00645 an oral hearing was held to deal with a fundamental conflict of evidence between the complainant and the company secretary of the employer. The evidential issues dealt with at the hearing concerned the meaning of a handwritten note enclosed in a Christmas card sent to the complainant and the substance of a telephone conversation. Having had the benefit of a hearing, at which the employer was represented by leading counsel and solicitors, the Ombudsman concluded that:
"Mr N did not impress me at the oral hearing as a credible witness. Instead I prefer the Complainant's version of the telephone conversation and the meaning to be attached to Mr N's note to him. Accordingly, by way of determination of the preliminary issue, I find as a fact that Mr N advised the Complainant that the changed terms would apply to him."
The Ombudsman went on to find that although the complainant had not suffered financial loss as a result of the employer's maladministration, he had "suffered significant injustice in the form of distress and disappointment which has been exacerbated by what I regard as false testimony throughout on the part of Mr N, a senior employee of the Employer." The employer was ordered to pay compensation of GBP 1,000, and would of course had a sizeable legal bill related to the hearing.
The appropriateness of an oral hearing was considered in [1998] OPLR 21. The Ombudsman ruled that two trustees of the scheme in question wrongfully refunded surplus to the employer without providing for limited price indexation for scheme members (which was about to be introduced as a statutory pre- condition of any payment of surplus to an employer). On appeal, two of the trustees argued that they should have the benefit of an exoneration clause under the rules of the scheme which excluded liability of a trustee "... for anything whatever except for breach of trust knowingly and intentionally committed by him ...". After the Ombudsman had made his determination, the Court of Appeal in [1997] 2 All ER 705 confirmed that exoneration clauses which exclude liability for everything except "wilful default" mean that a trustee will only be liable if he is conscious that what he is doing or omitting to do is a breach of his duty, or he is recklessly careless whether it is a breach of his duty. Therefore the ability of the two trustees to enjoy the protection of their exoneration clause depended very much on their state of knowledge. The Ombudsman had not, in the view of Blackburne J, sufficiently explored this evidential point.
Therefore in cases involving the alleged bad faith of trustees, oral hearings may be particularly appropriate.
The same approach was taken by Carnwath J in where he commented (at p156) that:
"... I find it surprising that on a matter involving such serious criticisms of Mr Duffield, and against a background where, unlike the other trustees, he had shown himself fully cooperative, the Ombudsman did not think it necessary to interview him personally."
This again highlights how judges have criticised the Ombudsman for not doing what a judge would have done if the case had been dealt with by a court.
In [2001] 18 PBLR, the trustees gave oral evidence to the Ombudsman as they had been accused of maladministration in making loans to the company. However, the Ombudsman stated that he did not accept the oral evidence they had given.
However the European Convention on Human Rights could, at least in theory, lead to oral hearings becoming more common. Article 6(1) of the Convention provides:
"In the determination of his civil rights and obligations of or 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 the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice."
The concept of a "fair and public hearing" is far removed from the predominantly paper-based method so far used by the Ombudsman. The Convention has now been incorporated into domestic law in the Human Rights Act 1998. The Ombudsman has apparently for some time now treated himself as subject to those principles but in practice very few parties have availed themselves of the right to demand a hearing. In some circumstances it may be in a respondent's interests to seek a hearing in order to establish the credibility of his evidence, especially in the absence of paperwork which corroborates his side of the story.
In a recent development, David Laverick has begun having meetings with parties where it is appropriate and convenient. He does not believe it is a breach of natural justice/Human Rights Act if only one party is present at such a meeting, because he will raise any points of relevance afterwards with the other party or parties.
