Being Fair in an Unfair System

Written by Trevor Slater

One of the biggest challenges of a dispute resolution service is balancing what is fair for both parties when considering a dispute. Financial Dispute Resolution Service is an approved dispute resolution scheme which helps resolve complaints between consumers and their financial service providers. Here are some of the challenges we face in the financial services industry.  

Fair and Fairness

Not everyone has the same understanding of fairness, though we often hear the term ‘fair’ being used. For example, ‘a fair and reasonable outcome’ is commonly used in alternative dispute resolution decision making. One of Rotary International’s Four Way Tests is, “Is it fair to all concerned?”

There are various meanings for the term fair or fairness including:

“Treating people equally without favouritism or discrimination.”

“Reasonable, right or just.”

Professor Arthur Dobrin on his Psychology Today website writes there are three areas that cover fairness.

  1. SAMENESS: There is the fairness where everything is equal. So everyone pays the same price for a theatre ticket, whether a child, an adult or a senior citizen.
  2. DESERVEDNESS: In this notion of fairness you get what you deserve. If you work hard, you succeed and keep all that you earn. Fairness means keeping what you deserve and deserving nothing if it isn’t earned. 
  3. NEED: The third idea of fairness is that those who have more to give should give a greater percentage of what they have to help others who are unable to contribute much, if anything at all.

In my view, if you asked the average person what fair or fairness means they would quite likely say to be treated equally.

The financial dispute resolution legislation

To become an approved external dispute resolution service under the Financial Service Providers’ (Registration and Dispute Resolution) Act 2008 there are a number of benchmarks that need to be met.  One of these is fairness.

However, many financial service providers would argue the way the dispute resolution schemes must operate is not fair because:

  • All financial service providers are compelled to be a member of a scheme. 
  • The cost at all stages is free to the consumer and all costs are covered by the financial service provider.
  • Any formal decision is binding on the financial service provider but not the consumer.
  • There is no right of appeal for the financial service provider.

This argument does in my view have some merit.  However, the financial dispute resolution schemes have no control over the legislation and must comply.

Providing fairness under restricted conditions

The challenge for a financial dispute resolution scheme is to provide a fair process within a strict set of guidelines. In my view there are several ways this is achieved. These include:

  • Building trust with the financial service providers. This is achieved by having a good knowledge of the financial industry, meeting and creating a relationship with key people in the industry, providing well explained and balanced formal decisions, being willing to listen to concerns and open to constructive criticism.

Above all the most important way to build trust with scheme members is to demonstrate a genuineness to help them and their clients resolve complaints and as early as possible.

  • Not pre-judging a complaint or the financial service provider. It can become very easy to judge a particular scheme member or class of member before either properly looking into a complaint or based solely on previous dealings. This is unfair of course and must be avoided.  Each complaint must genuinely be treated on its individual merits.
  • Transparency. Except in some parts of a mediation or conciliation, both the scheme member and the consumer must see all the information being considered during the scheme process including any views expressed by those working within the scheme. This means the process meets the natural justice requirements and shows there are no secret negotiations. It also shows the scheme to be independent and not an advocate for either party.
  • Ongoing review and improvements. Whilst a scheme must be independently reviewed every 5 years, users of the scheme’s process – both scheme members and consumers – should be asked for feedback. This should be assessed to see if the scheme processes can be improved.

It would be fair to say that often fairness is in the eye of the beholder. Someone who perceives they have ‘won’ their argument will far more likely say the process was fair than the person who ‘lost’. However, providing a process that is fair within the legislative requirements will go a long way to increasing user satisfaction.

About the author

Trevor is Client Director of Financial Dispute Resolution Service, an approved dispute resolution scheme for financial service providers in New Zealand.

Trevor is a highly-experienced dispute resolution practitioner specialising in the financial sector.  He holds a Masters Degree in Conflict Resolution from La Trobe University, a Diploma of Business – Frontline Management from the Australian Institute of Management and is an accredited mediator. Trevor also has qualifications in accounting and adviser compliance.

If you would like to get in touch with Trevor, please contact him by email at