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Ombudsman and Dispute Resolution

Updated: Aug 8




As a mediator, I have noticed that my conversation with individuals and small businesses in conflict often covers the possible Ombudsman processes available to disputing parties. There is quite a bit of misunderstanding as to what an Ombudsman can do, the scope of their role, and how an Ombudsman office can help in a particular complaint context. For this reason, I have written article for individuals and businesses contemplating the right dispute resolution process for them.


Having now trained staff from a range of Ombudsman organisations including the Energy and Water Ombudsman, Transport Ombudsman, Telecommunication Industry Ombudsman, Ombudsman South Australia and the Victorian Ombudsman, I have a good idea of both the range of different processes offered by Ombudsman organisations, as well as the limits of how they can assist in particular disputes.


Ombudsman organisations are the most utilised complaint-handling mechanism in the

Australian government, receiving over 60,0000 complaints annually, signifying high public

trust in Ombudsmen as independent agencies. 1 Their primary purpose is to provide an

impartial platform for citizens and consumers to address complaints or grievances against

government agencies, departments, or private sector service providers. 2 This reinforces

government accountability. 3


Many of us will have engaged or at least heard of an Ombudsman service in the context of a dispute or conflict we are having with a government agency or large corporation. In this article, I provide more information about what an Ombudsman office does with a specific focus on dispute resolution processes.


Ombudsman & Dispute Resolution Brisbane

Ombudsmen improve accountability and governance by:

1. Resolving individual disputes 

2. Investigating systematic problems 

3. Improved Sector Performance 4


Where a complaint is justified, Ombudsmen conduct inquiries into ‘individual or systematic

cases’, seeking redress through alternative dispute resolution processes like mediation or

conciliation. 5


There are two main types of Ombudsmen: Parliamentary Ombudsman, appointed and funded

by the government to investigate complaints against governmental entities, and Industry-

based Ombudsmen, where providers within specific industries (e.g., telecommunications,

energy, and water) are mandated to be members of independent dispute resolution schemes. 6

Irrespective of type, Ombudsmen conduct thorough investigations at no cost, striving for 'fair

and reasonable' resolutions. The public is entitled to expect six essential criteria from any

Ombudsman office: independence, jurisdiction, powers, accessibility, procedural fairness, and

accountability. 7


Why is an Ombudsman office important for ensuring industry excellence?

Industry providers, such as telecommunications, energy, and water, or insurance, must belong

to an independent dispute resolution scheme - typically an industry-funded Ombudsman. 8

These Ombudsman offices are overseen by a Board or Council comprising industry and

consumer representatives, as well as an Independent Chair. 9  

Industry-based Ombudsmen are crucial for maintaining industry integrity and standards of

excellence. They provide a free, impartial, informal, and swift alternative to the often lengthy and costly legal avenues. 10 Their responsibilities include independent investigations of

consumer complaints against the industry, often highlighting systematic issues within

industry processes. 11


Industry Ombudsman improve service and administration by:

  • Providing an alternative to court-based dispute resolution by using non-adversarial methods like mediation or conciliation however, Ombudsman do not replace the pursuit and enforcement of rights through the courts. 12

  • Conducting industry-specific dispute resolution with specialized expertise and provides independent expert information. 13

  • Resolving complaints based on legal principles, fairness, and good industry practice.14

  • Offering free and readily available dispute resolution services for vulnerable citizens to seek resources on matters of maladministration or misconduct, without penalties for unsuccessful complainants. 15

  • Promoting accountable, lawful, fair, and responsible public administration. 16

  • Developing industry and accountability policies and principles. 17

  • Supporting both consumers and industry without acting as a consumer advocacy scheme. 18

  • Prompting government action for beneficial legislative changes. 19


How do Ombudsman teams resolve disputes?

There is no uniform model for dispute resolution in Ombudsman organisations 20 Generally,

Ombudsman services require complainants to attempt resolving issues with the organisation

before initiating an investigation. 21 If the issue remains unresolved, the Ombudsman may

investigate. Industry-based Ombudsman services accept complaints via phone, letter, fax,

email, or online, while Government Ombudsman usually require written complaints. 22


The Ombudsman contacts the organisation, presents the complaint, requests a response, and

offers possible solutions. 23 Staff assist both parties in resolving the complaint, typically

through mediation or conciliation. 24 Complaints are generally resolved within 2 to 4 weeks;

however, complex issues may take several months. 25 If negotiation fails, Parliamentary

Ombudsman can make recommendations to agencies, while Industry Ombudsman can issue

binding decisions on the scheme member, but not the complainant. 26


For example, the Commonwealth Ombudsman, in their role as the Private Health Insurance

Ombudsman (‘PHIO’), has legislative authority to summon health insurers and healthcare

providers to mediation. 27 This process mitigates disputes impacting consumer rights and

benefits under private health insurance policies. 28


The mediation process involves both voluntary and compulsory aspects. Upon notification of

a complaint, voluntary mediation initiates with the PHIO engaging with the complainant,

assessing the necessity for mediation, and ensuring consumer interests are protected. 29

Following a written submission of disputed issues, the PHIO seeks information from the

opposing party and may convene mediation sessions if both parties agree. 30 Conversely,

compulsory mediation may be initiated by the PHIO under specific circumstances, mandating

participation and requirements of ‘good faith’ efforts towards resolution. 31 Non-compliance

with mediation directives constitutes an offense under section 20Y (4) of the Act. 32


Mediation involves the Ombudsman or an appointment third-party mediation, with associated

costs covered by the PHIO. 33 Throughout the process, agreements between insurers and

healthcare provides remain effective until the termination of mediation, ensuring consumer

protection. 34 Following mediation, reports detailing settlement terms are submitted to the

PHIO, who oversees compliance and may make recommendations to relevant authorities in

cases of non-compliance. 35 Within this process, the PHIO prioritises complaints and expects

prompt responses from involved parties. 36


List of Ombudsman Organisations in Australia: 37

Ombudsman and Dispute Resolution

Ombudsman & Dispute Resolution with Shiv Martin


References


1 John McMillan, ‘The Ombudsman and the Rule of Law’ (Discussion Paper, No 44, AIAL Forum, 6 November

2004) 3.

2 Australian and New Zealand Ombudsman Association (‘ANOZA’), Ombudsman Services in Australia

(Report), 1-2 <https://www.ewon.com.au/content/Document/ombudsman_fact_sheet.pdf>.

3 McMillan (n 1).

4 Colin Neave, ‘Exploring the Role of the Commonwealth Ombudsman in Relation to Parliament’, Parliament of

Australia (Papers on Parliament No 63, July 2015) <

5 Anita Stuhmcke, ‘Australian Ombudsmen: Drafting a Blueprint for Reform’ (2017) 24(1) Australian Journal

of Administrative Law 43, 47.

6 ANOZA (n 2) 1.

7 Australian and New Zealand Ombudsman Association (‘ANOZA’), ‘Essential Criteria For Describing A Body

As An Ombudsman’, Use of the Name (Policy Statement, February 2010) <https://anzoa.com.au/ws/media-

library/e496946f33294277ad3974c7d27da483/2010_anzoa_policy-statement_essential-criteria-for-describing-a-

body-as-an-ombudsman.pdf>.

8 ANOZA (n 2) 1.

9 Ibid.

10 Anita Stuhmcke, ‘The Relevance of Industry Ombudsmen’ (2002) 40(2) Law Society Journal 73, 74.

11 Ibid.

12 Ibid.

13 Ibid.

14 Ibid.

15 Ibid; Neave (n 4).

16 ANOZA (n 7).

17 Ibid.

18 Stuhmcke (n 10) 76.

19 McMillan (n 1).

20 Anita Stuhmcke, ‘Australian Ombudsmen: A Call to Take Care’ (2016) 44(3) Federal Law Review 531, 531.

21 ANOZA (n 2) 2.

22 Ibid.

23 Ibid.

24 Ibid.

25 ANOZA (n 2) 2.

26 Ibid.

27 Commonwealth Ombudsman, ‘Mediation Guidelines’, Private Health Complaints Industry Resources

Mediation-Guidelines-May-2020.pdf; Ombudsman Act 1976 (Cth) Part IID, Division 5.

28 Commonwealth Ombudsman (n 27) 2.

29 Ibid.

30 Ibid.

31 Ibid.

32 Ibid; Ombudsman Act 1976 (Cth) s 20Y (4).

33 Commonwealth Ombudsman (n 27) 3.

34 Ibid.

35 Ibid.

36 Ibid 4.

37 Productivity Commission, ‘Access to Justice Arrangements: Appendices D List of Tribunals and Ombudsmen’

(Inquiry Report No. 72, 5 September 2014) <https://www.pc.gov.au/inquiries/completed/access-

justice/report/access-justice-appendixd.pdf>.



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