Office
The office of the Financial Services Ombudsman was established in 2004.The Financial Services Ombudsman office has been merged with the Pensions Ombudsman.
It may hear and adjudicate on complaints against a very wide range of financial institutions. This includes, for example, banks, insurance companies, building societies, health insurers, mortgage insurance and credit intermediaries, moneylenders and stockbrokers.
The office is to investigate a complaint if it is within its jurisdiction. The complaint must be made within six years of the relevant subject matter of the complaint arising. It may not investigate, frivolous, trivial, bad faith, complaints or if there is an alternative medium of address.
It is a precondition to use of the Financials Ombudsman’s office that the financial institutions’ prior internal dispute resolution mechanism be exhausted first.
A determination by the Ombudsman’s office is binding, subject to the possibility of an appeal to the High Court. Once determined by the Financial Services Ombudsman, the subject matter of the complaint may not be the subject of litigation.
The scope of complaints includes the conduct of financial service providers. This includes the manner in which services or provision but also the refusal of a financial service.
Pre-Conditions to Complaint
A complaint should be preceded by a letter of complaint to the financial services provider itself. That ombudsman may refuse a complaint if
- the complaint is frivolous or vexatious
- not made in good faith,
- trivial
- too removed in time to justify an investigation,
- an alternative means of redress exists
- the complainant has no interest or insufficient interest in the matter
It is a matter for the Ombudsman to determine whether a matter falls within its jurisdiction. The courts will only interfere if there is a patent error.
Mediation
The office seeks to deal with complaints by way of mediation where possible. Generally, it must act in an informal matter, and in accordance with equity, good conscience and the substantive merits of the complaint, without regard to a technicality or legal form. It is to act in an informal and expeditious manner.
The Ombudsman is obliged to consider dealing with the complaint by mediation in the first instance. The Ombudsman must at least offer the possibility of mediation. Such mediation is voluntary and the party may withdraw at any time. Evidence of anything said or done in the course of mediation is not admissible in subsequent proceedings before the Ombudsman or in a court.
It is obliged by statute to seek to resolve the complaint by mediation. In practice, many financial institutions have been unwilling to engage in mediation following exhaustion of their own internal remedies. In many such cases, they feel there is nothing further to engage in, and they have determined their position.
Under the new dispute resolution model, the office seeks to engage by way of understanding the matters in dispute, holding conferences, holding of mediation where possible and investigation.
It makes a preliminary finding. This is undertaken by a dispute resolution officer supported by technical specialists. Where possible, a legally binding finding is made with the possibility of an oral hearing.
Mediation is voluntary and confidential. It may permit a more flexible and innovative resolution of the dispute. It can assist in maintaining relationships and generally save money and conflict.
Adjudication
In practice, the office has been somewhat less speedy and more formal and legalistic than intended. To a significant extent, this is the result of High Court cases on due process and constitutional justice.
Adjudication is made on the basis set out in the legislation. This includes, not only that the conduct was contrary to law, but also that it was unreasonable, unjust, oppressive and improperly discriminatory; notwithstanding that the practice was in accordance with law, or an established practice, that the practice of law or standard is unreasonable, unjust, oppressive, improperly discriminatory in its application to the complainant.
Procedure
The Ombudsman must investigate in accordance with constitutional justice and fair procedures. This may require an oral hearing in some cases, with the right to challenge witnesses by cross-examination where the constitutional justice so requires. See the sections on constitutional justice/administrative law.
Oral hearings are undertaken where there are issues of fact in dispute, which cannot be resolved fairly on the basis of the documents presented.
At an oral hearing, both parties may make submissions or be represented. They may offer evidence, cross-examine others and question their witnesses and documentation.
Originally, the courts held that the matter of holding an oral hearing was one for the Ombudsman and that it was appropriate to protect the informality and simplicity of procedures. However, the courts in the exercise of the general functions of judicial review, have held that the office as an agent of the State must uphold the constitutional right of fair procedure. This may require an oral hearing in appropriate cases.
The courts should not easily interfere with the decision of the Ombudsman. However, where matters of external disputed fact arise, it may be that an oral hearing is required.
Remedy
The Ombudsman has jurisdiction to decide the appropriate remedy. The courts will only interfere in the case of clear error.
The office may make an award of up to €250,000. It may require rectification of the matter concerned. It may make a report to the Central Bank. It may require changes in the relevant practice. The adjudication process seeks to rely on submissions of the parties but also, the offices’ investigation. Adjudication seeks to take account of what the office considers fair and reasonable in the circumstances. Emphasis is placed on customer information.
Appeals to High Court
There is a right of appeal to the decision of Ombudsman to the High Court. This is not a rehearing. The Ombudsman’s exercise of powers may be reviewed in terms of conformity with criteria of legal standards, reasonableness,proper considerations etc, much as in a judicial review challenge. On an appeal, the High Court may make such orders it appears appropriate including an order remitting the matter for review to the Ombudsman.
There have been a number of cases which have considered the role of the courts in appeals from the Financial Services Ombudsman. The appeal does not involve a full investigation and rehearing. The court lacks the requisite investigatory powers. Instead, it reviews the decision taking account of the entire process and considers whether the decision was invalidated by a serious or significant errors
The appeal will proceed on the basis of materials before the Ombudsman. Further evidence may be allowed where this is in the interest of the justice.