Ombudsman
Historical Aspect

 
Definition

Several attempts have been made to arrive at an appropriate definition of the ombudsman.

In 1974, the International Bar Association agreed upon the following definition:-

"An office provided for by the constitution or by an action of the legislature or parliament and headed by an independent, high-level public official who is responsible to the legislature or parliament, who receives complaints from aggrieved persons, officials, and employees or who acts on his own motion, and has the power to investigate, recommend corrective action, and issue reports".

Evolution

The modern ombudsman owes its evolution to a variety of factors.

Apart from focus on good governance at state level, major factors in the popularity of ombudsmen include the relatively recent quest for human rights, higher public awareness and education, the public's participatory role in state governance, expanded bureaucracies, emergence of new democracies with inexperienced public servants and rising maladministration.

Surprisingly, until only about 20 years ago, the ombudsman role was largely restricted to entertaining grievances against departments of state only.

However, a shift from state to private enterprise, exceptional growth in the services sector globally and a rapidly expanding consumer base encouraged both the private sector and governments world wide to embrace and launch such schemes intra-industry.

As recourse to courts of law, although expensive and protracted, is always available, the newer schemes were largely restricted to small businesses and individuals where redressal could be obtained quickly and free of cost.

Perhaps the first industry to embrace the concept was the banking industry.

The UK banks association established a banking ombudsman in 1986. However, in 1999 a statutory UK Banking Ombudsman was established which incorporated the activities of eight private sector ombudsmen within the financial services sector. Today, banking ombudsmen or similar schemes exist in about 25 countries both within the public and private sectors. Costs of the schemes are invariably borne by the banks.

In India, a Banking Ombudsman was appointed in 1995. However, the Indian Ombudsman is established within the Central Bank, as it is in Trinidad and Spain.

Other private sector ombudsmen have been appointed in the fields of insurance, airlines, medicine, mass media, estate agents, legal services and, in a couple of countries, funeral services. In all about 25 sectors have such schemes in place.

The scope of ombudsman's jurisdiction varies across countries. The majority of schemes cater to individuals and small businesses. The Greek banking ombudsman, for example, is established within the private sector and accepts complaints from non-legal entities, i.e. individuals only.

Along with UK, the Australian scheme is considered an industry benchmark. Both apply to small businesses and individuals. The Australian scheme has an award limit of Australian Dollars 250,000 and the UK scheme an award limit of Pound Sterling 100,000.

Ombudsman schemes worldwide have been highly successful, not only in resolving disputes but also by improving service quality and efficiency levels. Whilst courts only serve to adjudicate on facts presented, ombudsmen may, during the dispute resolution process, identify systemic weaknesses and recommend improvements. Another compelling reason for the success of ombudsmen is on grounds of cost alone. Anecdotal evidence suggests that cost savings achieved by avoiding extended litigation far outweighs the cost incurred in funding the schemes. Also, compared to the arduous and lengthy legal process, the ombudsman process is informal, flexible and quick. Another important and beneficial aspect of the schemes is that complainants have nothing to lose because they always retain the right to seek legal redress later.
 
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