New Homes Ombudsman should be set up – An APPG Inquiry Recommendation

In his speech at the JCT Parliamentary Reception on 17 May 2016, APPG EBE chair Oliver Colvile MP highlighted the main findings of the Inquiry and some of the main recommendations, in particular that a New Homes Ombudsman “should be set up.” stating “this would mediate disputes between consumers and their builders or warranty providers to offer a quick resolution.”

It is to be hoped that this and all the recommendations in the Inquiry Report, due for publication at the beginning of June 2016, will be taken forward and fully implemented by Government at the earliest possible opportunity.

Official Ombudsman

Houses of ParliamentAn Ombudsman is usually appointed by the government or by parliament, but with a significant degree of independence. They are charged with representing the interests of the public investigating and addressing complaints against public bodies, private companies, organisations and sometimes entire industries. An ombudsman should be a totally independent body capable of investigating complaints of malpractice, maladministration or a violation of rights, both fairly and impartially.

Now that the need of a New Homes Ombudsman has been clearly identified by a government all party inquiry, one must be appointed by the Government or parliament. The house building industry cannot be afforded any opportunity to dilute the powers, effectiveness or independence of the New Homes Ombudsman. I believe the New Homes Ombudsman should be set up, funded and operated in a similar way to the Financial Ombudsman Service, giving new home buyers access to impartial dispute resolution.

Fair – Free – For Everything

Government appointed Ombudsman services include:

However, official government-appointed Ombudsman should not (but could) be confused with organisations offering “independent ombudsman services” that various companies and trade bodies prefer to use. Most describe themselves as: “Approved by the government under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015. We are an independent not-for-profit organisation which specialises in providing Alternative Dispute Resolution services for consumers and businesses in the (area or trading) sector(s).

In reality they are little more than an outsourced dispute resolution service, paid for by an industry, masquerading as an independent ombudsman. The Ombudsman Service Ltd ( is a company limited by guarantee; a not-for-profit organisation that operates alternative dispute resolution schemes across a range of sectors dealing with complaints regarding: Aviation * ABFA * Communications * Consumer Goods or services * Copyright * Energy * Glazing * Green Deal * Home Improvement. Ombudsman * Parking * Property.

Are these Ombudsmen truly independent and government appointed?

The Ombudsman Service Ltd states: “we are good for consumers and good for business”. Ombudsman Services was founded in 2002 to provide independent dispute resolution. We provide an independent, impartial and cost effective means of resolving disputes outside the courts. We are experts in dispute resolution; here to sort out complaints about the companies which have joined us. We are funded by those whose complaints we handle through a combination of subscription and case fees.”

Whilst better than nothing, as is the case with the currently unaccredited Consumer Code for Home Builders Adjudication Scheme, these “Ombudsmen” are not always promoted by the companies or organisations that join. It is also open to question whether any ombudsman service, voluntarily funded by the member companies and/or their trade organisations, specifically to operate a dispute resolution service, can ever be fully impartial.

As the Consumer Code for Home Builders state in their FAQ: “Home Builders benefit from having self regulation rather than Government imposed regulation and a levy to pay for it. There will be a speedy, low-cost resolution of disputes which might otherwise result in expensive litigation.”

Well self-regulation hasn’t and isn’t working. But for the New Homes Ombudsman to be effective, it must be fully independent and government appointed, not a sub-contracted dispute resolution service company either set up or chosen by house builders, to protect their own interests.

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