The use of the term “ombudsman” is restricted – those who use it have needed to obtain approval from the Chief Ombudsman, since 1991. Only three cases have been approved.

FSCL entered into discussion with the Chief Ombudsman in the middle of last year but its application was declined

The dispute resolution scheme then sought a judicial review, saying it wants the “gravitas” of the term as it is in direct competition with the Insurance and Financial Services Ombudsman scheme. Both schemes represent insurers, financial advisers and other financial services industry participants.

Of the four external disputes resolution schemes operating in the financial services market, two are ombudsmen: The Insurance and Financial Services Ombudsman and the Banking Ombudsman. 

But in the High Court this month, Justice Simon France said he was not persuaded that FSCL required the use of the term "ombudsman" to be able to establish itself as having the necessary qualities displayed by other approved schemes. 

He said the scheme had not been disadvantaged in any material way by its inability to call itself an ombudsman so far,

France noted that former chief ombudsman Brian Elwood had concerns about the potential proliferation of the term "ombudsman" and the confusion he thought had arisen since IFSO and the Banking Ombudsman started using the name. He added a public interest criteria to be satisfied in decisions, from 2002. He said it should only be on rare occasions that the name was used outside parliamentary or public service.

France said, considering the likely impact on the public understanding and perception of using the name "ombudsman" for a scheme specifically established for the purpose of the FSPRDR Act, meant extending its use to FSCL was not only unnecessary but would probably "have similar detrimental effects to those previously experienced".

He said the decision not to allow the name was not unreasonable.  "Although it is legitimate to ask when a consent will ever be given under section 28A of the Act, the restrictive policy cannot be said at this point to have close the door to any successful application in future."

Susan Taylor, chief executive of FSCL, said her organisation had already filed an appeal with the Court of Appeal.