Brian Galgut Ombudsman for Long Term Insurance

A Practical Perspective

I was appointed as Ombudsman with effect from 1 June 2007, and having now served as such for 9 months and 1 week I have come out of confinement, so to speak, and am in a position to share with you my impressions of the new experience. There are in particular two aspects that have struck me, both relating to the differences between the role of a Judge and that of an Ombudsman.

Public contact

In their working lives both a Judge on the bench and the Ombudsman must at all costs retain their objectivity and impartiality, and their image as such, and must therefore avoid publicity. Judges, therefore, have little or no formal contact with members of the community and the corporate world, contact in their day to day lives on the bench being limited essentially to the advocates and attorneys who appear before them. They therefore live relatively protected lives and, aside from what they hear in evidence in the cases before them, and from their considerable contact with people on a social level, they have limited direct exposure to what happens in other spheres of life. I do not thereby suggest that they are ignorant of those matters. On the contrary, Judges more than anyone else probably learn a great deal about other spheres of life, but in essence that experience does not come from direct or personal contact. It is instead derived indirectly.

The life of the Ombudsman, on the other hand, is in many ways a corporate existence, and as such requires active interaction with the outside world. Far from avoiding such contact the Ombudsman, as the representative of the office, takes part in corporate affairs, is in the public eye and is often involved in publicity. The office in fact thrives on such publicity as it is able to attract. The essential function of the Ombudsman’s office is to resolve disputes, but a substantial part of the role of the Ombudsman himself is to be the face of the office, which embraces attending meetings and conferences, addressing public bodies, interacting with stakeholders such as the FSOS Council and the FSB, making speeches and being interviewed. Virtually all of this has to do of course with the life insurance industry, and because in the last decade or more the needs of consumers have become so refined, and because as a result life policies are often also investment linked, the industry and its products are sometimes extremely complicated.

The adjudication process

The other is the difference between the adjudication process in court compared to that employed by the office. In court the process is formal, and is based on the evidence of every last relevant witness, each of whom is present to testify in person, and is therefore available to be cross-examined by the opposing side’s counsel and questioned by the Judge. All relevant documents are in addition available for use in this process.

The Ombudsman’s process, on the other hand, is entirely different. Evidence is not received on oath, and more often than not it is not in person that witnesses testify. On the contrary, the office must make its findings on information and documents, including contracts, contained in letters furnished by or on behalf of the two sides. Because the parties do not have the benefit of being able to subpoena witnesses or to secure the disclosure of documents in the possession of third parties, the information furnished to the office is of necessity limited in most cases to that emanating from the parties themselves and their employees or representatives.

The point, however, is that it is on the two sets of documentation as submitted by the parties, whether spontaneously or upon a request by the office, that the office has to make a finding. The adjudication is in other words based on paper rather than on oral evidence, which a Judge once described as a decision on whose typewriter has got it right.

Of necessity the Ombudsman’s office must at least sometimes rely, more often at any rate than a court would be permitted to do, on hearsay evidence, and because the witnesses concerned do not personally testify before the office, whether on oath or not, it does not have the benefit of expert cross-examination by legal representatives on either side or of being able to explore every last little nook in the structure of the facts.

Despite these differences, however, the remarkable thing that has become apparent to me is that in its rulings the office will come to a correct conclusion no less often than a court would do. I will in fact make bold and say that in many cases justice will be done more often than a court can achieve, firstly because disputes are dealt with within weeks or months of a complaint being lodged, when the memories of witnesses are still fresh and relevant documents available, whereas in court the ultimate hearings are delayed for up to two or more years after summons is issued; secondly because the office’s informal procedure entitles it to receive and evaluate evidence that would otherwise be unavailable to a court; and finally because, unlike in court, the office has an equity jurisdiction which helps achieve justice more often than the law alone will permit.

A final thought

I end by stressing that the services of the office favour both consumers and insurers. They favour consumers because the process is informal, expeditious and cost free to them, and because they are free to go to court even if a ruling is made against them; and they favour insurers because the process costs a fraction of what court proceedings would otherwise have cost them, and there is at the same time no waste of valuable man hours by their officers and employees having to sit around at court

Brian Galgut
Ombudsman for Long-term Insurance