In June 2016, FOS introduced a pilot to test using conciliation as a required step within our dispute resolution process. The aim was to increase the number of conciliations we conduct, as well as offer a more efficient service and increase the satisfaction of all parties to a dispute. We have a long history of using conciliation to effectively resolve disputes and we were keen to explore how we could expand the use of conciliation.
“We are passionate about increasing the volume of conciliations and using conciliation as a tool to resolve disputes. We believe in the benefits of using a variety of techniques to resolve disputes and in particular interest based models such as conciliation. We tested the process through the pilot and know that it works,” said Michelle Kumarich (pictured), Senior Manager, Support & Allocation, who oversaw the pilot.
An interest-based technique means we can explore the underlying interest and motivation of both parties, helping to resolve the dispute. The pilot was conducted over a year and we recently reviewed the data. A significantly higher number of disputes in the pilot closed early and did not have to be referred to the preliminary view and decision stages in our process.
“Both parties to a dispute – the applicant and the financial services provider (FSP) – experienced benefits as a result of having conciliation used in our process. We have seen earlier closure of disputes, leading to increased satisfaction for both parties and decreased case costs,” explained Michelle.
“We also found that even if a dispute does not resolve at conciliation, the conciliation still increases the likelihood of a negotiated resolution at a later stage. A conciliation helps to narrow the issues at hand, even providing a smoother transition to a determination.”
After every conciliation, both parties are surveyed for their feedback on the experience. Eighty percent of applicants taking part in the pilot indicated that they have had a positive experience. Eighty-seven percent thought the process and conciliator were fair.
FSPs shared their feedback with us; with an FSP commenting that there is a strong psychological element to conciliation where people are more likely to feel they have been heard and have had an opportunity to voice their issues.
“We also noticed that the process works better with FSPs who are highly engaged and supportive of the conciliation process. Parties to a conciliation need to be open to all possibilities. This positive approach will benefit both parties. It is worthwhile investing time and other resources into conciliation because it really helps people,” Michelle added.
FSPs have relayed positive feedback that “cases that wouldn’t have normally been resolved have been closed a lot quicker”. This is a direct result of the pilot’s requirement to carry out conciliation for all cases, not just cases that meet certain prerequisites.
Conciliation as a required step for FSPs may put a strain on their internal resourcing with additional time required for disputes leading to increased workloads. However, this has caused some FSPs to focus on strengthening their internal dispute resolution (IDR) function, due to having a decreased need for staff involvement in the recommendation and determination function. One FSP commented: “This has yielded positive outcomes in our IDR process as we are able to dedicate more time to those crucial early stages of a dispute.”
Overall, taking the data collected into account, introducing conciliation early on in the dispute resolution process increases the timeliness and efficiency of dispute resolution.
We will be continuing to expand the use of conciliation and encourage parties to participate. We will also build on our own conciliation capacity, with additional case workers being trained in conciliation.
We would like to thank all the FSPs who participated in the pilot. We appreciate the willingness of the FSP case workers who were involved. We recognise that there are some challenges in managing resources, but we are confident from the results of this pilot that there are significant benefits to be gained from all stakeholders when conciliation is used to resolve the dispute.
FOS members who are interested in increasing the number of conciliations can contact Michelle Kumarich, Senior Manager, Support & Allocation, for more information.