FSO Legal Challenges William Prasifka Financial Services Ombudsman, Ireland Ombudsman Association, Burleigh Court Conference Centre, Loughborough 16 May 2013

FSO Role “Independent adjudication on unresolved disputes between Complainants and Financial Service Providers thereby enhancing the financial services environment for all sectors”

Power of the FSO Investigate /Adjudicate complaints Award compensation up to €250k Direct Rectification Findings - legally binding, appealable only to the High Court Accessible & Free Service to the Consumer

Complaint Trends

Complaint Trends – Context

Complaints Received Jan – April 2012 v 2013

Legal Challenges

Findings Can be Appealed to High Court Since 2005 – over 10,000 Findings issued Approx 200 Findings appealed to High Court Findings appealed by Complainants and Financial Institutions Currently 40 HC appeals outstanding 3 Supreme Court Appeals Legal Costs: 20% of total budget

Standard of Review - Oral Hearing Traditional Position J&E Davy Vs FSO, 2008 “The power to order procedures is expressly conferred upon the [FSO] by the Act. It is within his decision as to whether an oral hearing is necessary; as to whether a complaint should be dismissed because of a lack of co-operation from a complainant. All of these matters are decisions which he can make within his jurisdiction. In reviewing those decisions, therefore, judicial review is available only if there is such a want of fairness in the procedures adopted as to amount to a denial of constitutional justice.”

Standard of Review - Oral Hearing Traditional Position IL&P Vs FSO, 2011 “The informality of the Ombudsman’s procedures, allows him to make those decisions based on any written material available to him, or if he so wishes he has power to have the relevant parties give sworn evidence. The Court is of the view that the decision to call oral evidence is a matter entirely for the Ombudsman, and is not a matter appropriate for this Court to comment on.”

Standard of Review - Oral Hearing Alternative Position Lyons Vs FSO, 2011 “Once [FSO] proceeds to adjudication, a legal Rubicon is … crossed. As agent of the State, [FSO] is thereby bound to uphold the constitutional right to fair procedures…This has further consequences, for…the resolution of the question of whether there should be an oral hearing is not a matter which goes directly to the specialist expertise of the [FSO] so that the deference to that expertise as enunciated by Finnegan P. [Ulster Bank Case] is simply not applicable in this case.”

Standard of Review - Oral Hearing Alternative Position Murphy Vs FSO “In so far as curial deference has been referred to on this application, it is of course the case that a Court should not easily interfere with a decision of the Ombudsman where he arrives at such decision in reliance upon his own particular expertise. However, in the present case, it cannot be said that his expertise lies in the area of alarm installation. That is outside his expertise as [FSO], and it is obvious therefore that where two electrical / alarm experts disagree he cannot call upon any expertise of his own in order to resolve the disagreement without hearing each, including any cross-examination which may occur.”

Future of FSO Legal Challenges – go to heart of FSO mission “Conflict of Material Fact” “Can be established by Oral Assertion” Right to Cross Examination by Counsel deemed Paramount Consequences?

UK Case Law Heather Moore and Edgecomb, 2008 “...the availability of a contemporaneous written record would normally make a hearing unnecessary...the Ombudsman, sensibly in my view, considered that the written report provided by HME to Mr. Lodge carried greater weight than information provided orally” “...The respondents acknowledge that it is not enough to persuade the court that some procedure other than the one adopted by the decision-maker would be better or more fair. Rather, they must show that the procedure is unfair. The court must constantly bear in mind that it is to the decision maker, not the court, that Parliament had entrusted not only the making of the decision but also the choice as to how the decision is made” Lord Mustill in R v Secretary of State for the Home Department ex p Doody 1994(cited by Stanley Burnton LJ in HME)

HME, European Court of Human Rights, 2011 “...It is open to a firm to seek judicial review of an Ombudsman’s decision in a particular case. In the present case, this led to oral argument in the Court of Appeal over three days, and resulted in a lengthy judgment that considered, inter alia, whether the circumstances of this case called for an oral hearing before the Ombudsman” “The fact that proceedings are of considerable significance for an applicant, as is the case here, is not decisive for the necessity of a hearing. The applicant was afforded ample opportunities to present its case and to know and respond to the arguments put forward by L, and to make final representations on the basis of the Ombudsman’s provisional decision. The Court therefore accepts the Government’s argument that the relevant issues of fact and law could be adequately addressed in, and decided on the basis of, written submissions. It finds that the requirements of fairness were complied with and did not necessitate an oral hearing before the Ombudsman”

Return to Principles / FSO Purpose Independent, Fair, Expeditious, Effective, Alternative Dispute Resolution Process Level the playing field re legal costs Ombudsman Expertise: Dealing with Complaints; early resolution; call centre; outreach Unique ability to provide direct, consistent and timely feedback to stakeholders; issue reports; trends analysis; information on website Can be Faster, Cheaper and Better…

Thank You Any Questions?