The Financial Services Authority (FSA) and the Financial Ombudsman Service have today published a Feedback Statement describing responses to the discussion initiated last year about how the costs of funding the ombudsman service’s compulsory jurisdiction (CJ) could be shared among firms in future. The responses have indicated that there is broad support for increasing the importance of the case fee – as opposed to the levy - in financing the Financial Ombudsman Service. At the same time, there was support for increasing the number of cases (currently two) which can be considered by the ombudsman service before a firm starts paying case fees.
The FSA and the ombudsman will see what scope exists for moving in this direction when agreeing the ombudsman service’s budget for 2008-09, towards the end of 2007.
In deciding not to make any changes immediately, the FSA and ombudsman have taken account of current budget and caseload uncertainties affecting the ombudsman service. Given these uncertainties, the ombudsman service believes it is particularly difficult to model with any degree of precision how significant changes at this stage would affect either its financial stability or the size of the levy and case fees.
Funding for the CJ is paid by FSA-regulated firms through a combination of an annual levy and case fees, and an FSA/ombudsman joint Discussion Paper (06/2) last May canvassed a range of possible options for reforming future CJ funding based on options around the balance between annual levies and case fees.
