1. Procedural Fairness: Striking the Balance Elisabeth Wentworth Banking and Financial Services Ombudsman Ltd National Consumer Congress March 2007

2. 2 Aim Better understanding of the components and psychology of fairness Some tips for self-testing Outline of a training program that can be used in different contexts

3. 3 Overview Procedural fairness – what is it? Who is it an obligation for? Why is it important? Drilling down into the practicalities Understanding bias Some tips Fair hearing Training decision-makers in fairness

4. 4 What is it? A legal rule of decision-making in courts and tribunals An obligation on other decision-makers whose decisions significantly affect the interests of the parties A stated criteria for IDR and EDR processes A human expectation in the resolution of conflict Two main components: No bias, real or apparent; and a fair hearing

5. 5 Who needs to know about it? Embedded in the dispute resolution framework for consumer protection Internal dispute resolution: Australian standards for complaint handling AS 4269 [fairness] and AS ISO 10002 [objectivity] External dispute resolution systems DIST Benchmarks; ASIC Policy Statement 139 (financial services) Industry participants: codes Government agencies

6. 6 AS ISO 10002: complaint handling Replaces ‘fairness’ with ‘objectivity’ Useful definition: ‘equitable, objective and unbiased’ Components include: –Openness – clear & well publicized processes –Impartiality – avoiding bias –Accessibility – access & information –Completeness – talk to both sides –Equitability – equal treatment

7. 7 Why is it important? Risk management May be a legal obligation Enhances reputation and trust Fair processes and communications are more efficient Not confined to the giving of a formal decision - every interaction with the parties counts

8. 8 Understanding Bias The psychology of bias is a rich field of research Decision-making bias includes identified categories such as: –Confirmation bias –Disconfirmation bias –Bias blind-spot

9. 9 ‘I’m not biased’ – tricks the mind plays Human brain can play many tricks in order to drive us to the conclusion we favour The example of the bathroom scales Underestimating our own biases, overestimating other people’s biases Unconscious attitudes and beliefs v expressed attitudes

10. 10 The practicalities: No Bias Indications of apparent bias –Premature expression of hostility –Labelling of one of the parties –Putting one party ‘through the hoop’ on proof v uncritical acceptance of other party’s claims –Using different forms of address, different levels of familiarity –Listening differently

11. 11 Some Tips Don’t react prematurely: wait until you hear both sides Be aware of feeling cross or irritated Do a mental check – favourable picture of one party v unfavourable picture of the other? Check that your questioning of the parties is balanced

12. 12 Some tips (cont) Check that the tone of your conversation is the same with both parties and is not mirroring the tone and language of one Check your listening – are you going through the motions with one party? In written communications trust your doubts about a word or a phrase, check with a colleague, take it out

13. 13 Components: fair hearing Reasonable opportunity to be heard –sufficient opportunity to present case - may include an extension of time or adjournment where appropriate, –notice of other side’s submissions and the evidence and the opportunity to respond –evidence contradicting the evidence of a witness or leading to criticism must be put to the witness to give them an opportunity to respond,

14. 14 No evidence* Decision– must not ‘come out of the blue’ or be perverse Not mere speculation or suspicion unsupported by evidence Inferences may be drawn but must have some basis for drawing them Decision must not be so unreasonable that no reasonable person could have made that decision

15. 15 Avoiding an irrational decision Is the decision logical and cogently presented? Are the reasons for the finding clear? Has all relevant information been considered? Are the findings of fact based on, and consistent with, the objective information? Has the balance of probabilities test been applied correctly?

16. 16 Training in procedural fairness Identify the source and content of obligations Explain what the obligations mean in practice Use illustrations from a range of decision-making contexts Recognise the challenges

17. 17 Conclusion Fairness is a state of mind and a style of communication reflecting that state of mind Keep an open mind, maintain even-handed, courteous communication and avoid appearance of prejudgment Step back from the emotions and language of the parties Get into the habit of self-checking ‘Injustice is easy. Fairness takes hard work.’