Ombudsman – definition and meaning

An ombudsman is an official in charge of settling disputes between individuals and companies. The disputes may also be between a taxpayer and the government. In fact, there are dozens of types of disputes where an ombudsman may be necessary. We may also refer to this person as an ombuds or public advocate.

Somebody may, for example, contract or hire an ombudsman against an insurance company. Perhaps that person felt that the insurance firm had not respected their rights.

People choose ombudsmen because they are impartial, fair, credible, confidential, and independent.

While some ombudsmen provide their service free of charge, others may receive payment.

Ombudsmen will first try to resolve the issue between the two disputing parties. The aim, initially, is to prevent having to resort to a formal investigation. In other words, they will try to conclude there and then.

According to the Ombudsman Association:

“Ombudsmen exist to deal with complaints from ordinary citizens and consumers about most public bodies and some services in the private sector.”

Ombudsman - image with definition and example
Ombudsmen try to solve disputes between individuals and companies or government departments.

An ombudsman are similar to an arbitrator. However, arbitration resembles litigation, but in an informal and flexible process. The ombudsman is an independent, neutral, in-house professional.

Ombudsman is impartial

The ombudsman’s job involves comprehensively investigating and considering both parties’ arguments. This is necessary to achieve a fair solution. They will consider all circumstances and any relevant regulations.

Above all, ombudsmen must be thorough, fair, and impartial.

The ombudsman’s office will strive to solve each case. However, if they encounter systemic failures, they will seek change within the organization. A systemic failure affects the whole of an organization, rather than just parts of it.

If they encounter several similar or identical disputes, they will start a collective case to avoid excessive costs.

Nowadays, ombudsmen exist in the public and private sector. In the public sector, they handle complaints against government departments, local authorities, the health service, or any public body. In other words, any public body that is directly or indirectly subject to democratic accountability.

Ombudsman – the private sector

Ombudsmen deal with disputes against businesses. However, in these cases, the businesses are not subject to democratic accountability. They may issue decisions that force changes beneficial for all parties.

Ombudsmen work to help improve effectiveness and efficiency. Their decisions, they hope, help improve the quality of service of government departments and companies.

The UK’s Ombudsman Association says that there are three schemes for dealing with complaints in the private sector:

Statutory: in other words, established by statute. This gives ombudsmen a compulsory jurisdiction over specific types of businesses. For example, there are financial ombudsmen, legal ombudsmen, etc.

Underpinned by State: certain types of businesses must have an ombudsman scheme. The scheme has to meet certain minimum criteria.

Voluntary: people set up this type of scheme voluntarily. In fact, many of them emerge as a result of consumer or government pressure.

Video – What is an ombudsman?

In this Financial Ombudsman Service video, CEO Caroline Wayman explains what ombudsmen do. Their job in a dispute is to try to put things right, she explains.