Balancing Confidentiality and Transparency in an Ombudsman Mediation Service - Research Submission by: Kennedy Institute Workplace Mediation ...
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Balancing Confidentiality and Transparency
in an Ombudsman Mediation Service
Research Submission by:
Kennedy Institute Workplace Mediation Research Group
Sponsored by: The Financial Services Ombudsman
Balancing Confidentiality and Transparency – Research Report
Authors & Acknowledgements
We wish to gratefully acknowledge the support and input of the individuals and organisations who engaged with
us in this research including:
David Borenstein, Manager, Investigations, OBSI Canada
Debbie Enever, Head of External Relations, FOS UK
Janette Fogarty, Head of Dispute Resolution Services, RTB, Ire
Penny Holloway, Director Conciliation and Arbitration, LRA NI
Karen Stevens, Insurance and Financial Services Ombudsman, NZ
Susan Taylor, Chief Executive Officer, FSCL NZ
Anna Perry, Director of Conciliation, Facilitation and Mediation Service WRC
This research project was conducted by seven members of the broader
Kennedy Institute Workplace Mediation Research Group (KIWMRG). They are as follows:
Margaret Bouchier, MSSc, M.MII, Advanced Working Solutions Limited (Joint Project Leader)
Alec Coakley, M.Sc., M.MII, HR Evolution Ltd
Deirdre Curran, PhD, National University of Ireland Galway (Joint Project Leader)
David Dalton, David J. Dalton Associates, M.MII
Cyril Joyce, Dip in IR/FL ICM, M.MII
Oksana Kokaylo, M.A. in Dispute Resolution, M.MII
Louisa Meehan, MBS, Woodview HRM
For further information on the work of the Research Group see www.kiwmrg.ie.
©KIWMRG 2017
Balancing Confidentiality and Transparency – Research Report
Financial Services Ombudsman
Research Report
21st October 2017
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Balancing Confidentiality and Transparency – Research Report
Table of Contents
LIST OF TABLES ............................................................................................................................................................. V
1. PROJECT OVERVIEW AND METHODOLOGY.........................................................................................................1
2. PRELIMINARY REPORT SUMMARY ......................................................................................................................3
2.1 INITIAL THEMES EMERGING FROM THE THEORY ............................................................................................................ 4
2.2 INITIAL THEMES EMERGING FROM THE ORGANISATION REVIEWS .................................................................................... 5
3. THIS REPORT AND HOW IT BUILDS ON THE PRELIMINARY REPORT .................................................................. 7
4. EXPANDED LITERATURE REVIEW .........................................................................................................................7
4.1 DEFINING THE ROLE OF THE OMBUDSMAN .................................................................................................................. 8
4.2 DISPUTE RESOLUTION PROCESSES COMMONLY ADOPTED BY OMBUDSMEN ...................................................................... 9
4.3 DEFINING THE CORE CONCEPTS OF CONFIDENTIALITY AND TRANSPARENCY..................................................................... 10
4.4 BALANCING CONFIDENTIALITY AND TRANSPARENCY.................................................................................................... 12
4.5 THREATS TO CONFIDENTIALITY ................................................................................................................................ 14
4.6 ESTABLISHING THE BOUNDARIES OF CONFIDENTIALITY IN MEDIATION............................................................................ 16
4.7 THEMES EMERGING FROM THE LITERATURE .............................................................................................................. 19
5. THE ORGANISATION REVIEWS...........................................................................................................................20
5.1 OVERVIEW OF THE SAMPLE ORGANISATIONS AND THEIR MEDIATION SERVICES ............................................................... 20
5.2 KEY FACTORS IN THE OMBUDSMAN APPROACH TO DISPUTE RESOLUTION ....................................................................... 22
5.3 THE PARAMETERS OF CONFIDENTIALITY IN THE OMBUDSMAN SERVICE .......................................................................... 25
5.4 MANAGING CONFIDENTIALITY AND TRANSPARENCY ................................................................................................... 28
5.5 REPORTING OF CASE DATA AND OMBUDSMAN DECISIONS ........................................................................................... 31
5.6 THEMES EMERGING FROM THE ORGANISATION REVIEWS............................................................................................. 32
6. DISCUSSION AND IMPLICATIONS FOR THE FSO ................................................................................................33
6.1 DISCUSSION ......................................................................................................................................................... 33
6.2 IMPLICATIONS FOR THE FSO ................................................................................................................................... 34
REFERENCES LITERATURE REVIEW .............................................................................................................................36
REFERENCES ORGANISATION REVIEWS .....................................................................................................................39
APPENDIX 1: TEMPLATE FOR REVIEWING OF ARTICLES........................................................................................42
APPENDIX 2: TEMPLATE FOR DESK REVIEW OF ORGANISATIONS........................................................................43
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APPENDIX 3: LIST OF ORGANISATIONS SUBJECT TO DIRECT ENGAGEMENT .......................................................44
APPENDIX 4: ORGANISATION REVIEW QUESTIONNAIRE (A), COVER PAGE .........................................................45
List of Tables
Table 1: Overview of cases entering the respective ADR/ mediation services ............................................... 21
Table 2: Explicit exclusions to confidentiality ................................................................................................... 26
Table 3: Types of information gathered ............................................................................................................. 29
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Financial Services Ombudsman – Research Report
1. Project Overview and Methodology
This report presents the findings of a research project conducted by the Kennedy Institute Workplace
Mediation Research Group (KIWMRG) on behalf of the Financial Services Ombudsman (FSO).
The Financial Services Ombudsman (FSO) is a statutory officer who deals independently with unresolved
complaints from consumers arising from their individual dealings with financial service providers. Where
a complaint about a financial service provider cannot be resolved through the provider’s own
complaints process, the complainant may submit a complaint to the Financial Services Ombudsman
(FSO) which will seek to resolve the issue by facilitating or mediating agreement between the parties or,
where this is not possible, will investigate and adjudicate the complaint and issue a legally binding
finding.
For a number of reasons, including a perception that engagement in mediation may constitute a show of
weakness or create an expectation of payment, there was an initial strong reluctance on the part of financial
services providers to engage in mediation. However, the introduction of a dedicated Dispute Resolution
Service within the FSO in 2016 marked the beginning of a significant increase in the use of mediation in
resolving complaints. This deliberate shift in focus to ‘implement the simplest, most efficient, proportionate
and effective complaint resolution processes’, resulted in 2,500 cases being mediated by the FSO in 2016,
representing 62.5% of the FSO total case load closed for that year.
The presenting issue for this research project was the challenge faced by the FSO in balancing the
requirements for confidentiality and transparency in its mediation service. Confidentiality is a core
principle of mediation and is viewed in the literature as critical to the effectiveness of the process (Deason,
2001; Freedman and Prigoffs, 1986; Rasnic, 2004). However, the FSO, as a public body, must ensure
appropriate transparency of its mediation policies and practices in order to:
Identify patterns emerging, for example, in relation to particular products or practices.
Raise awareness: while mediation is confidential, the FSO needs to ensure that it can draw out
appropriate information. While mediated discussions are confidential, aggregate figures over a
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period of time or in relation to a particular type of issue and/or anonymised case studies may be
useful for attracting positive media interest.
Build confidence in the service.
Ensure against an imbalance of information in favour of organisations that have repeat cases in
the FSO.
Allow for learning – for the FSO service, the industry and consumers.
Provide information to Public Service Representative bodies e.g. public interest and governance
requirements and/or budget apportionment considerations.
The purpose of this research project was to explore how this tension between confidentiality and
transparency could be resolved by drawing on both the theory presented in international literature, and
the practices adopted by comparable institutions around the world. The intention is that the outcomes
of this project will inform the strategic and operational approach to mediation by the FSO.
This project was conducted over a period of 7 months in 2017, by a team of researchers from the Kennedy
Institute Workplace Mediation Research Group (www.kiwmrg.ie). The KIWMRG is a national group of
academics and mediation practitioners attached to the Kennedy Institute of Conflict Resolution at
Maynooth University, Ireland. The Group is committed to conducting and disseminating applied research
that will inform mediation practice both in Ireland and abroad. Bingham (2015) stresses the importance
of research in informing Ombudsman practice. Having lamented the dearth of empirical research in this
area, she makes a case for research evidence as one of three elements informing ombudsman services
(the others being ‘professional expertise’, and ‘preferences/values of the service’) (2015:24).
The Research Group was approached by the Financial Services Ombudsman (FSO) and invited to submit
a proposal that would address the practical dilemma faced by the FSO in balancing the requirements for
confidentiality and transparency in its mediation service. Once the proposal was agreed, a team of six
researchers from the Group embarked on the project.
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The project consisted of two phases. Phase 1 involved a systematic review of the relevant literature
from an extensive range of international sources using a tailored template focusing on the core concepts
relevant to the project. Phase 2 involved a review of a range of organisational comparators using a tailored
template and interview schedule to draw out the required data. Comparator organisations were
identified by the Research Team via an online search, with additional relevant organisations identified
by the FSO. Data collected from the organisation reviews was subjected to thematic analysis.
This report represents the final submission of the Research Group (KIWMRG) to the Financial Services
Ombudsman (FSO) and is structured as follows. In Section 2 we present a summary of the findings in the
research project’s ‘Preliminary Report’, which set the scene for a more detailed analysis of theory and
practice. Section 3 explains how this report builds on that initial report. Section 4 presents the relevant
theory in an expanded literature review. Section 5 presents the findings from the organisation reviews.
Finally, Section 6 will close the report by discussing the findings as they relate to the theory and
considering the possible implications for the FSO
2. Preliminary Report Summary
The Preliminary Report set out the interim findings of the project to the FSO. As outlined in Section 1
above, the focus of this research project has been to address the challenge faced by the FSO in balancing
the requirements for confidentiality and transparency in its mediation service by drawing on both the
theory presented in international literature, and the practices adopted by comparable i n s t i t u t i o n s
around the world.
International literature addressing the confidentiality/transparency debate was sourced and reviewed in
order to identify the key themes emerging. That literature sourcing was subsequently expanded and the
detailed literature review is presented in Section 4 of this report.
In parallel, a selection of organisations across different jurisdictions, were identified as relevant
comparators to the FSO. The Preliminary Report outlined the findings from an initial desk-based review
of the web sites of these organisations. This was followed by direct engagement with a sample of these
organisations using a combination of in-depth survey and semi-structured interviews, as will be outlined
in Section 5 below.
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2.1 Initial themes emerging from the theory
The preliminary review of the literature focused on the core concepts of confidentiality and
transparency, and the somewhat inevitable tension that arises between them.
It was revealed that confidentiality is commonly understood to mean that the detail of communications
between the parties, and between the parties and the mediator, will not be revealed by any of the
participants. Whilst considered a core tenet of mediation, it was revealed that the term itself is clouded
in ambiguity and that the boundaries of confidentiality are difficult to decipher.
The second, somewhat conflicting core concept is transparency. According to Flyverbom (2016:110),
transparency is understood as ‘a process of ensuring accountability through the timely and public
disclosure of information’ with the core objective of ‘making processes knowable and governable’. Such
disclosure provides openness, accountability and trust.
The literature reveals a tension between confidentiality and transparency. Freedman and Prigoffs
(1986:43) argue that ‘a confidentiality provision can be crafted with appropriate exceptions and
flexibility’ in order to address this tension.
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Public bodies have a duty to be transparent. Mediation requires confidentiality. Clarity is required on
exactly what is confidential, why, and from whom. There may be acceptable exceptions that can be agreed
in advance. Confidentiality agreements can be crafted to facilitate some degree of transparency.
One can conclude from the literature that policy and practice can and should be informed by research.
2.2 Initial themes emerging from the organisation reviews
The initial desktop review involved an examination of codes of practice, standards documents, and other
relevant information available online in relation to a sample of comparator organisations. Particular
focus was paid to documentation related to the issue of confidentiality and the conditions and
parameters governing confidentiality. Several exceptions to confidentiality were identified during this
initial review for example, the use of non-identifying information for research or education purposes (ADR
Code (Ca); AMA Code (Au); EMIN Code (Int.); MSMC Code (US).
Most of the Codes of Practice reviewed allow for the disclosure of information in connection to the
mediation where agreed, in advance, by the parties involved. Organisations with a public service remit
can draft specific confidentiality provisions to enable them to manage the t e n s i o n b e t w e e n
confidentiality and the challenges associated with gathering and storing required information.
Whereas in the normal course of mediation, the mediator has no proprietary rights to the substantive
information, the public interest and governance requirements of a statutory dispute resolution service
requires that the service gather, store, and use certain information. This presents a challenge in developing a
transparent and measured approach to the handling of information in accordance with the core principles of
mediation.
In the context of financial service disputes, disclosure of certain types of information can provide for
learning and constructive feedback, both to consumers and financial service providers (Gill et al.,
2014:25). The initial organisation review indicated a proactive approach by some ombudsman services
to the gathering of information in relation to trends and public interest issues.
The initial review also identified a wide variety of information being collected and reported in relation to
public service mediation schemes including: the type of disputes and issues addressed; terms used;
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general statistics; and specific information regarding emerging trends. The materials available a l s o
suggest a transparent approach by ombudsman services to the handling of information.
While the initial review of available online information provided some interesting insights into the
approaches of different organisations, there were limits to the detail publically available. Consequently,
the research team progressed to a more comprehensive review using tailored questionnaires and
interview. The findings are presented in Section 5 of this report.
The preliminary review of comparator organisations highlighted 4 key issues:
A broad range of exclusions to confidentiality exist in practice.
Mediation service providers gather and use non-identifying information for necessary
administrative and appropriate educational and learning purposes.
Organisations with a public service remit are cognisant of their responsibility to disclose issues
of public interest and to ensure that their processes are not cynically used to hide transgressions
from the public eye.
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In line with the increased reach of Freedom of Information, there is evidence of a high level of
accessibility to personal information and information about ombudsman service processes and
functions
3. This Report and how it Builds on the Preliminary Report
As agreed in the initial research proposal, the purpose of the preliminary report was to present a ‘first look’
at the literature and at a sample of comparator organisations in relation to the project brief. Findings were
then submitted in a draft report to the FSO, with a follow up meeting between the research team leaders and
FSO management to ensure that the project was targeted to the brief and to agree the parameters for this
final submission.
FSO reception to the draft report was positive – both in terms of approach and substance – and
suggested changes were relatively minor and constructive. The proposed approach f o r the final stage o f
t h e p r o j e c t w a s d i s c u s s e d a n d a g r e e d , w i t h t h e inclusion of a d d i t i o n a l organisations
identified by the FSO as valid comparators for the direct engagement stage. Timelines for completion were
set.
The purpose of the final submission (i.e. this report) is to build on the Preliminary Report by (a) sourcing
and reviewing additional literature that will inform the project brief, and (b) conducting an in-depth
exploration of a sample of comparator organisations to determine what lessons-from-practice might be
considered by the FSO.
4. Expanded Literature Review
This section of the report explores an expanded range of literature deemed relevant to the research
project brief in order to establish the academic foundations for the core concepts.
This section is structured as follows. We begin by defining the role of the ombudsman, as defined in the
literature, and the core principles and regulations associated with the role of ombudsman. We then explore
the dispute resolution processes commonly adopted by ombudsmen in the course of their duties, with
a particular focus on mediation (as the preferred process of the FSO). The core concepts of
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confidentiality and transparency are then set out, particularly in the context of the ombudsman role and
the mediation process. Threats to confidentiality and the boundaries of confidentiality receive particular
attention in light of their potential to inform the project brief. Key themes emerging from the literature
are highlighted at the end this section.
4.1 Defining the role of the ombudsman
The word Ombudsman originated in Sweden and derives from the Norse word ‘umboosmaor’, meaning
‘representative’ (www.ombudsman.org.mt). According to Stieber (2000) the ombudsman role has been
embedded in the Swedish constitution since 1809 to allow citizens to turn in confidence to an official in
pursuit of justice and fair treatment. The ombudsman role now exists in most countries around the globe
and in both public and private sector organisations. While the location and context differs, there is a
common understanding of the role of the ombudsman.
‘The term [ombudsman] is gender-neutral in origin and is used by the International Ombudsman
Association (IOA) to communicate to the widest possible community. Variations of the term exist (i.e.
ombuds, ombudsperson) and are common among those practicing in the ombudsman field.’
http://www.ombudsassociation.org/Resources/Frequently-Asked-Questions.aspx
A modern ombudsman may be described as an objective, impartial person, usually in a position of
authority, whom people can approach in strict confidence – and therefore, safely – with complaints of
unfair or improper treatment, a request for an independent perspective, or enquiry into bureaucratic
practices or policies (The Oxford Encyclopedia of Peace, 2010).
According to a report on the history of the European Ombudsman, ombudsmen had been established in
every continent by the end of the 20th century with the role being adapted to suit the exigencies of the
context:
Great variety can be observed with regard to the way the ombudsman is appointed, to the powers of
the ombudsman institutions, to the scope of the ombudsman’s investigations and sanctions, to the
legal basis of the institution and to its position in society.
The European Ombudsman 2005:23
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The classic national ombudsman, who monitors public administration at the level of government, has been
supplemented with ombudsman arrangements in specialised areas. In Ireland, examples include: the
Children’s Ombudsman; the Press Ombudsman; the Pensions Ombudsman; the Garda Ombudsman; and the
Financial Services Ombudsman (the subject of this study). Private companies have established internal
ombudsmen to ensure that customers, staff and users have access to justice if treated unfairly. The
organisational ombudsman is listed by Teague et al. as one of the conflict management innovations for
dealing with individual grievances in organisations in Ireland (Teague et al. 2015:12). However innovation
appears slow and, despite evidence of its effectiveness, a survey of 83 non-unionised, multi-national
companies (MNC) based in Ireland revealed that only 4 used an organisational ombudsman as part of
their conflict management system (Doherty and Teague 2016).
Regarding the regulation of ombudsman services, some ombudsmen operate under a legal framework
or a single Act, while others operate non-statutory schemes, guided by the general concept of
‘reasonableness’. Others still, base their assessments on the specific ombudsman principle of ‘good
administrative practice’ (Gammeltoft-Hansen, 2005:25). The FSO is a statutory-based organisation, governed
by the Central Bank and Financial Services Authority of Ireland Act (2004). This Act is set to be repealed by
the (at time of publishing, un-commenced) Financial Services and Pensions Ombudsman Act 2017.
Regardless of context, core tenets are identified as informing the ombudsman role. Mary Rowe,
Massachusetts Institute of Technology (MIT), has published extensively on this and she identifies these
core tenets as independence, confidentiality and neutrality (see Rowe and Gadlin, 2014 for example).
4.2 Dispute resolution processes commonly adopted by ombudsmen
The primary purpose of the ombudsman is to address complaints in relation to perceived mishandling or
unfair treatment. Examples may include unreasonable delay, failure to follow proper procedures, knowingly
giving advice that is misleading or inadequate, unreasonable conduct, and refusing to answer reasonable
questions. An ombudsman can find in favour of ‘the complainant’ or ‘the defendant’ and usually
recommends redress: i.e. some sort of compensation for what has gone wrong
(www.ombudsmanassociation.org). As we will see from the empirical dimension of this report, how the
ombudsman goes about addressing complaints varies from person to person and context to context.
The dispute resolution processes that lend themselves most readily to the role of the ombudsman appear
to be mediation (or conciliation) and investigation (linked to adjudication), and generally in that order.
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If the complaint is not resolved in mediation, the ombudsman may investigate – taking an active role
in reviewing the evidence and recommending an outcome (adjudicate). In the majority of cases, both
parties accept the recommendation.
www.ombudsmanassociation.org
It is important to note however that in the case of the FSO the findings are legally binding.
More detail on the processes adopted by ombudsmen will be revealed in Section 5 of this report. We
will see that mediation, the process of choice of the FSO, frequently features in ombudsman processes.
Mediation can be defined as:
…. a confidential and voluntary process whereby an independent mediator assists two or more
individuals experiencing conflict to identify their issues, and explore how those issues can be
addressed with a view to reaching agreement.
Adapted from Kenny 2014
Mediation has been promoted as the exemplary resolution-focused method, with the p o t e n t i a l t o
replace any other dispute resolution mechanism (Bondy and Le Seuer, 2012). The challenge is how to
balance the confidentiality principle of mediation with the requirement on Ombudsman Schemes to be
transparent in the performance of their duties, particularly within a publicly funded service.
The next section will explore the theoretical depiction of the core concepts of confidentiality and
transparency in the literature.
4.3 Defining the core concepts of confidentiality and transparency
Mediation is increasingly proffered as the process of choice in dispute resolution, largely because of its
perceived advantages over other dispute resolution practices, not least its settlement rate. According to
Rasnic (2004:22), for example, some ‘85% of all employment disputes submitted to this ADR process in
the U.S.A. are reportedly successfully settled’.
The core concepts most relevant to this research project are confidentiality and transparency, and the
somewhat inevitable tension that arises between them.
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Confidentiality is identified as a core principle of mediation, and a review of the literature reveals ‘an
almost universal agreement that confidentiality is necessary to the survival of mediation as a viable form
of alternative dispute resolution’ (Brown, 1991:307).
This principle, by its very nature, restricts the types of quality control metric gathering and reporting
that can increase stakeholder confidence and develop best practices. The types of challenges mediation
providers can encounter in this regard include:
Ensuring balanced and ethical information-gathering and retention processes
Ensuring stringent guidelines around the use of anonymised case data to support statistical
findings of effectiveness
Using this learning to review and improve service reliability and stakeholder confidence
Confidentiality is commonly understood to mean that the detail of communications b e t w e e n t h e
parties, and between the parties and the mediator, will not be revealed by any of the participants, and is
usually ‘based in the notion of contract’ (barristers.com.au: p4).
According to the Law Reform Commission (2010) ‘there is a consensus that some degree of
confidentiality in the process is appropriate, but commentators do not agree on how strong the
protection should be’ (33:3.14). ‘The Commission acknowledges that the principle of confidentiality in
mediation is extremely complex. Each relationship and circumstance needs to be deconstructed and
rules devised to deal with each different aspect’ (33:3.15).
Confidentiality has been described as the sine qua non of mediation and a strong case will be made in
this paper regarding the importance of the concept to the process of mediation. And yet, as identified in
the literature, the boundaries of confidentiality are difficult to decipher and the term itself is clouded in
ambiguity.
What does confidentiality really mean? Is the confidentiality clause in the mediation agreement
enforceable? In what circumstances will the Court treat the communications at (or documents
created by a party for) a mediation as admissible? There are no easy answers to these critical
questions.
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www.barristers.com.au: p1
Rueben (2006) argues that confidentiality is largely a myth and that, in the US at least; the legal
framework underpinning mediation communications needs to be clarified and consistently applied. He
argues that there is currently little legal support for the notion ‘what happens in the room stays in the
room’:
Confidentiality has long been part of the mythology of alternative dispute resolution (ADR). This
aspect of the mythology has come under more scrutiny in recent years, particularly in the mediation
context. This is not surprising considering the popularity of mediation and the centrality of
confidentiality to the mediation process.
Rueben, 2006:1255
In the Irish context, commitment to confidentiality is often captured in an Agreement to Mediate, which
may or may not be signed by the parties. However, until the enactment of the Mediation Bill (scheduled
for 2017), confidentiality in mediation has no statutory footing in Ireland. The FSO Act however does cover
non-admissibility of mediation proceedings.
A separate and somewhat conflicting concept is transparency. According to Flyverbom (2016:110)
transparency is understood as ‘a process of ensuring accountability through the timely and public
disclosure of information’ with the core objective of ‘making processes knowable and governable’.
Such disclosure enables openness, accountability and trust. The perceived, positive e f f e c t s o f
transparency are related to the belief that ‘sunlight is said to be the best of disinfectants; electric light
the most efficient policeman’ (Brandeis, 2014:92). Applied to mediation, transparency allows interested
parties to gain access to details of the process as well as its outcomes. In cases of publicly funded
mediation, such interested parties would include state bodies, the media, the general public and law
enforcement agencies. But how does transparency sit with the inherent need for confidentiality in
mediation?
4.4 Balancing confidentiality and transparency
Bingham (2015) refers to ‘Relational Dialectics Theory’ which she argues helps us to make sense of
naturally occurring ‘oppositional poles’. Applied to this project the confidentiality-transparency dilemma
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represents a ‘dialectic tension’ similar to other such tensions generated in conflict management
processes e.g. balancing neutrality and advocacy, participant autonomy and formal control. These
tensions are inevitable. The challenge is to recognise and appropriately manage them:
The theory encourages us to ask what the two poles mean to us, how ombuds experience the tension
and communicatively manage it, and with what consequences.
2015:28
This theory informs the current project in that we explore; what the oppositional poles of confidentiality
and transparency mean, how ombudsman services experience and manage this tension and the
implications for choices made in this regard.
In mediation, a qualified, privileged relationship exists between the m e d i a t o r a n d d i s p u t a n t s
(comparable to priest/penitent, doctor/patient relationships). This privilege is c h a l l e n g e d w h e n
obligations for transparency arise. Freedman and Prigoffs (1986:43) refer to this tension between
confidentiality in mediation and requirements for transparency and argue that ‘a confidentiality
provision can be crafted with appropriate exceptions and flexibility to mitigate the disutilities of a
blanket privilege.’ Exceptions to a general provision of confidentiality can also help ‘alleviate any aura of
suspicion regarding mediation’ and go some way towards meeting the demands and obligations for
transparency. Freedman and Prigoffs acknowledge however that any such exceptions should be informed
by solid research and by the inputs of all of the relevant stakeholders (1986:44).
Rogers (2006) considers the conceptual meaning of the term ‘transparency’ as distinguished from
interrelated terms of ‘public access’ and ‘disclosure’. Public access refers to an individual’s right to
attend or access proceedings and, while it is a mechanism for promoting transparency, it is not a feature
of transparency. Disclosure obligations refer to substantive information that must be revealed because
of its beneficial value to those receiving the information (2006:1303-1312):
Public access and transparency seek to ensure scrutiny and evaluation of decision-making processes,
consequently promoting their legitimacy. As such, they are principally means by which to control or
alter decision makers' behavior. Disclosure obligations, by contrast, are principally directed at
substantive information and are designed to benefit those receiving the relevant information.
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Disclosed information may incidentally constrain the entities making disclosures, but its primary
purpose is to enable recipients of the information to make strategic choices.
Rogers, 2006:1309-1310
Although his writing focuses on commercial arbitration in the US, Rogers (2006:1335) argues that
‘increased transparency is the cure for genuine inequities, perceived inequities or inaccurate claims of
inequity’. Arguably, the same applies to mediation, particularly in the context of an ombudsman service.
In the US, public outcries around inequities of arbitration decisions a n d c o n ce r n s a b ou t b a l a n c i n g
private rights against public justice prompted legislative change to make rulings/outcomes more
transparent, by ensuring public access and participation.
Also referring to arbitral transparency, Schmitz (2006:1240) proposes a two-prong reform: (1) increase
transparency by requiring published awards and reports in cases affecting public rights and interests;
and (2) decrease transparency by requiring confidentiality of individuals' personal information revealed
during arbitration.
4.5 Threats to confidentiality
Traditionally the main threats to confidentiality in Ombudsman services were legal action or public
scandal (Howard, 2011). Howard provides practical advice to ombudsmen in cases where confidentiality
is threatened, in particular, preventative actions. Key elements of his advice include having
documentation in place outlining principles and practices in relation to confidentiality and having clear
policies on the retention, storage and destruction of records.
…the ombudsman office should at all times take seriously the admonition to maintain as few records
as possible and that document retention and destruction policies be rigorously complied with.
Howard, 2011: 2011:14
There are eight elements of the International Ombudsman Association (IOA) Standards of Practice that
refer to confidentiality. The only exception is a judgment by the ombudsman that there is ‘an imminent
risk of serious harm’ (IOA Practice Report 2015).
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Butenski maintains that the more dire cases of imminent risk ‘are few and far between and fairly
straightforward’, and argues that alternatives to breaching confidentiality can o f t e n b e f o u n d a n d
should always be considered (2011:45):
It is our job and obligation as Ombudsmen to be as creative and knowledgeable to come up with
options to discuss reasonable alternatives.
Butenski: 2011:45
Apart from considering alternatives, his advice to ombudsmen is that the determination of the
exception for imminent risk should be clearly documented in advance, and a process put in place to
address such circumstances.
There is some consideration in relation to record-keeping and confidentiality in the literature. Rowe et
al. (1993:332) argue that a ‘purist [ombudsman] practitioner’ would ‘offer nearly complete
confidentiality’ and would not keep detailed records of cases. In their view the exceptional case of
imminent risk to life, or dangerous/unlawful conduct should be anticipated in advance and robust
practice codes devised and adhered to.
The ombudsman would only keep aggregated records and records that followed a certain location or
type of problem… The (minimal) case notes required to address any case would be destroyed
regularly as a matter of customary practice.
Rowe et al., 1993:332
Rowe et al. (1993) suggest that, while it is appropriate for a database including demographics of clients
and complaints be maintained in order to satisfy a transparency requirement and/or monitor patterns
of complaints, no information should be retained that allows individuals to be identified.
Biala (2012:65) identifies seven types of information that can be retained in relation to complaints in
order to satisfy the requirement for transparency, without jeopardizing confidentiality. These include:
Loss of productivity due to pervasive conflict
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Unwarranted staff attrition/transfer
Negative publicity
Significant violation of policy/CoP
Potential internal/external grievance
Litigation potential
High-risk, safety issues
Biala’s focus is on categorizing issues presenting to the organizational ombudsman. An ombudsman
could tailor the categories based on their experience, thus allowing them to demonstrate their activity
and value.
4.6 Establishing the boundaries of confidentiality in mediation
It is argued that effective mediation relies on confidentiality, which is widely accepted as a core principle
of the process, essential to facilitating open and honest communication between the parties:
Without confidentiality, the mediation process becomes a house of cards subject to complete
disarray by a variety of potential disruptions.
Freedman and Prigoffs 1986:44
Confidentiality provides an incentive to the parties to engage, and fear of their words being disclosed in
another context would place an unacceptable restriction on the process, and prove a disincentive to
engagement. Only if parties are precluded from using mediation communications in subsequent
proceedings, the argument goes, will they be sufficiently candid during mediation so that the parties'
overlapping bargaining ranges can be discovered and the case settled. (Cole, 2006:1419) The mediator
also must have confidence that their part in the process will not be exposed to scrutiny or question, and
that their neutrality will not be undermined by being called to give evidence in any subsequent judicial
processes which would effectively ‘destroy their efficacy as an impartial broker’ (Freedman and Prigoffs,
1986:38)
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When a mediated dispute proceeds to an adjudicative process ‘confidentiality provisions perform an
important role by keeping the judging function separate from the mediation function’ (Deason,
2001:83):
The positive influence of confidentiality is lost if, during the mediation, the parties and their lawyers
do not have confidence in their ability to protect communications from future disclosure and in the
system's protection for mediator and judicial neutrality.
Deason, 2001:84-85
However, confidentiality clearly has its limitations as illustrated by Dore (2006). The process, outcomes
and the role played by the mediator are hidden from scrutiny. This becomes an issue when disclosure is
desirable or required to ensure accountability and protection of the public good. The issue dealt with in
mediation may need to be exposed (e.g. discrimination), the mediator’s role may be in question, the
opaqueness of the process may protect repeat offenders and/or mitigate against collective action,
effective use of public funds cannot be established and ultimately public interest may not be best
served. However, Rogers (2006:1309) makes the point that who, when and how public interest is
determined can be problematic. Dore’s limitations of confidentiality bear particular significance in the
context of the ombudsman role as he argues that there are circumstances where the privilege afforded
to mediation ‘should be permitted to yield’ (p512):
Increased transparency and accessibility to at least some aspects of ADR in at least some cases
would disclose information important to other potential claimants, facilitate accountability and
deterrence, and encourage public confidence in ADR.
Dore, 2006:520
The dilemma presented in this research is the challenge of balancing the confidentiality assurance in
mediation with the transparency requirement of a publicly funded agency. A key question therefore is;
how do we preserve the confidentiality principle that contributes to the attractiveness and effectiveness
of mediation, and still provide appropriate data on the workings and contribution of an ombudsman service?
The answer to this question points to the need to place limits on confidentiality in order to facilitate
transparency. But what should determine such limits?
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Kentra (1997) presents two forms of standard guidance for determining what should be considered
confidential:
A. Model Standards
A mediator shall maintain the reasonable expectations of the parties with regard to what is
confidential. A mediator shall not disclose any matter that a party expects to be confidential unless
given permission by the parties.
B. The ‘Wigmore Balancing Test’
This test can be used for determining a claim of privilege and is based on four questions:
i. Did the communication originate in confidence with an assurance that it would not be
disclosed?
ii. Is confidentiality essential to the full and satisfactory maintenance of the relationship
between the parties?
iii. Is the relationship between the parties one which, in the opinion of the relevant community,
ought to be carefully preserved?
iv. Is the damage caused by disclosure greater than the benefit gained?
Cole (2006) argues that, in the US context, mediation confidentiality is often breached intentionally in
the courts and the sanctions provide an insufficient deterrent despite ‘clear legislative guidance i n
relation to what is sanctionable behaviour’.
Misuse of mediation communications threatens the integrity ... of mediation as an effective dispute
resolution mechanism.
Cole, 2006:1444
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Cole argues that because the mediator promises confidentiality to the parties, failure to sanction abuse
of that confidentiality in the courts is ‘harmful to the integrity of the mediation process’ (Cole,
2006:1450). While a clear legal framework may protect against the intentional misuse of mediation
communications, Rogers (2006:1325) argues that refinement of disclosure obligations is a more
effective and practical mechanism than legally enforced, transparency reforms.
In balancing confidentiality and transparency, it is incumbent on public bodies such as the FSO to
develop a clear policy which seeks to balance and accommodate these competing interests, while
ultimately allowing dispute resolutions innovations, such as mediation, to flourish.
4.7 Themes emerging from the literature
There are several themes emerging from this review of the literature that are pertinent to the project
brief.
It is clearly established that the ombudsman role features strongly in international dispute handling
systems and the core principles of independence, confidentiality and neutrality appear to be universally
accepted. In the course of their duties the common processes adopted by ombudsmen are mediation
and investigation, generally in that order, with mediation being increasingly considered as the process of
choice. The empirical data presented later in this report provides substance to this statement.
Balancing confidentiality and transparency represents what Bingham (2015) refers to as a ‘dialectic
tension’, and much of the challenge emerges from the fact that the boundaries of these concepts
remain unclear. Where does a commitment to confidentiality or transparency begin and end? There
appears to be considerable scope for the individual ombudsman to determine the boundaries that suit
their context within broader parameters. Two key questions emerge from a review of the literature in
this regard: (1) What does the ombudsman need to be transparent about and why? (2) What
information pertaining to the ombudsman service needs to remain confidential and why?
In establishing the boundaries of confidentiality an agent/agency should address the two questions
above and develop a clear policy based on context. The parameters of confidentiality can then be
tailored to the circumstances of the agent/agency and parties to the service will have the choice to sign
up to (or not) the boundaries offered by confidentiality in that context.
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The key threats to confidentiality identified in the literature are: legal action, public scandal and
imminent risk of harm, with the latter considered most serious. General wisdom seems to be that
breaching confidentiality should be treated as an absolute last resort. Contingency plans should be in
place to address these threats if realised, and all available options should be considered before
confidentiality is breached.
5. The Organisation Reviews
The purpose of the organisation reviews was to gain an insight into the current practices of ombudsman
services to the gathering and reporting of information from their mediation / ADR services, and the drivers
of these practices.
This section is structured as follows:
Section 5.1 provides an overview of the sample organisations and their mediation services
Section 5.2 considers key factors in the ombudsman approach to dispute resolution
Section 5.3 examines the stated role and parameters of confidentiality in the ombudsman service
Section 5.4 considers the respective organisational approaches to information gathering and
reporting
Section 5.5 identifies themes emerging from the organisation reviews
5.1 Overview of the sample organisations and their mediation services
Direct engagement was sought with a total of nine organisations, including six ombudsman services in
the UK, Canada and New Zealand, and three statutory-based organisations in Ireland and Northern
Ireland that provide a mediation service and, as such, were deemed relevant. Seven of these
organisations engaged directly with this project, including: Financial Ombudsman Service, United
Kingdom (FOS UK); Financial Services Complaints Limited Scheme, New Zealand (FSCL NZ); General
Insurance OmbudsService, Canada (GIO); Insurance and Financial Services Ombudsman, New Zealand
(IFSO NZ); Ombudsman for Banking Services and Investments, Canada (OBSI); the Residency Tenancy
Board, Ireland (RTB); the Workplace Relations Commission, Ireland (WRC); and the Labour Relations
Agency, Northern Ireland (LRA).
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The ADR/mediation services of the sample organisations varied significantly in terms of number of cases
commencing ADR/mediation. Table 1 below gives an overview of cases received by the d i f f e r e n t
services. Some organisations gather information in relation to the number of cases commenced and
resolved through their ADR/mediation service (OBSI, GIO, IFSO NZ, WRC) while others identify the
number of cases that commenced ADR and the number of cases that progressed to Ombudsman
decision (FOS UK) – the balance of cases representing those resolved and those withdrawn from the
ADR service.
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Note:
*This GIO figure represents face-to-face mediation. However, it should be noted that 2,377
cases of ‘call resolution’ through telephone assistance/support were reported for 2016 and GIO
call handling may include conciliation which involves GIO discussing the case directly with the
company ombudsman.
**This figure of 642 (70%) represents number of cases in which agreement was reached or the
complainant withdrew their complaint.
***This figure represents the number of cases entering the LRA, face-to-face mediation service.
Employment and workplace rights complaints are dealt with via their conciliation service and
only relationship issues are dealt with in their mediation service.
5.2 Key factors in the ombudsman approach to dispute resolution
The stated role of the financial services ombudsman is to resolve disputes between individuals and
financial service providers through the provision of an independent and fair service.
Each of the sample ombudsman organisations provide a selection of services to manage these disputes,
ranging from the informal – mediation/conciliation/facilitation – to the formal – adjudication/
investigation/tribunal/formal decision.
While the official role of the ombudsman is to ‘impartially investigate complaints’, and some of the
ombudsman services reviewed have the authority to impose binding agreement on the provider (FOS UK,
OBSI), there is a strong emphasis throughout the sample organisations on the informal resolution of
disputes.
As explained by Janette Fogarty, RTB, mediation allows for a faster and more convenient process than
adjudication and has ‘huge benefits in terms of processing times’. Likewise, Debbie Enever, FOS UK,
observes that this focus on an informal approach is a pragmatic response to resolve complaints quickly
and informally, and the majority of FOS UK cases are resolved through the informal process.
While different terms are used for the informal processes, all of the sample organisations confirm their
use of mediation or a mediative-type process, in which the mediator or dispute resolution officer (DRO)
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uses mediation techniques to enable both sides to openly discuss and identify the relevant issues and
move towards resolution in a cooperative, efficient and timely manner.
And while different terms are used for the officers managing these processes – mediator, ADR officer,
case manager, conciliation officer, investigator and ombudsman – all of the organisations confirm that
their DROs are subject to standards and codes of practice specific to the organisations in their delivery
of these roles and, in some cases, to a code of practice of an external ADR accrediting bodies (FSCL NZ;
GIO; IFSO NZ).
This emphasis on a non-legalistic approach that, in the first instance, seeks to provide an informal
process based on cooperation and fairness is strongly emphasised throughout the organisational
literature and reflected in the underlying principle of confidentiality at the informal stage, as specified
by all of the sample organisations. As explained by Karen Stevens, IFSO NZ, the parties have already
reached deadlock and exhausted the complaints processes of the provider, and so an alternative
approach is required:
If they [the provider] have already come to a position where they have reached deadlock in their own
process and they cannot get a resolution or an outcome, then it’s for us to try and do better for them
and for the customer. We could not do that, I believe whole-heartedly, if it was a process like the
court process. That’s why they choose ADR.
Karen Stevens, Insurance and Financial Services Ombudsman, NZ
However, rather than ‘pure mediation’, the ombudsman services describe a common, pragmatic
approach that is both inquisitorial and consensus-based and focused on producing a mutually
acceptable outcome that is fair, and with an option to proceed to recommendation or formal
determination, in the event that the issues cannot be resolved informally:
We do use mediation techniques and diplomacy to work towards a fair resolution but we don’t do
pure mediation. We provide an opinion and use ADR techniques to attempt to bring the parties to an
agreement... The role of the department is to investigate… In cases, for example non-financial losses
we will propose a range for compensation and work with the parties to agree an amount leaving
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time to go back and forth. In that regard it is something more like mediation, but with an
understanding of what OBSI believes is reasonable.
David Borenstein, Manager, Investigations, OBSI Canada
…in terms of ‘official mediation’, that’s not the role that our service has, but in terms of informal
mediation – that is the way we resolve the majority of the complaints that we receive... it’s very
much that we will use whatever tools are most relevant to the parties, and particularly the
complaint, to try and resolve it…. most complaints would be results of a kind of variety of those
methods.
Debbie Enever, Head of External Relations, FOS UK
The requirement for ‘fair’ outcomes is an important aspect of the ombudsman s e r v i c e . GIO, f or
example, employs ‘impartial professionals’ with relevant industry experience – but without direct ties to
specific insurance companies – to ensure that solutions reached between individuals and their insurance
providers are fair. Also, generally if the complaint is not resolved in mediation, the DRO can make a
recommendation based on what they believe to be a fair outcome (GIO; FOS UK; IFSO NZ; OBSI) in an
effort to informally resolve the case. These recommendations may be non-binding on both parties (FOS
UK; GIO; OBSI), or in the case of the IFSO NZ, binding on the provider.
However, as explained by FOS UK, there is no set formula for fairness and for recommendations to ‘feel
fair’; the DRO needs to show that they understand what really matters to the individual’s involved (FOS
UK, 2016:10). Interestingly while ‘about 70%’ of FOS UK cases are resolved without a recommendation
for compensation, a significant number settle for the amount previously offered by the provider ‘if the
amount offered is considered fair or more than what we would recommend’ (OBSI).
While the role of the DRO is independent of both parties and the emphasis is on achieving a mutually
acceptable resolution to the dispute, the requirement of a ‘fair’ outcome requires that the role is not
neutral in terms of fairness. As explained by FSCL NZ Conciliation Guide: ‘A FSCL conciliator is trained in
conciliation/mediation and is independent of both parties. The conciliator ensures that any agreement
or resolution is reasonable and has been entered into by mutual agreement and free and informed
consent.’
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