FBD challenges Ombudsman's ability to investigate a complaint which is before the High Court.

DARKMATTERS

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Just read in the business section of the Irish Independent today that FBD is challenging the FSPO’s ability to investigate a complaint against it’ as the same matter is before the High Court. Ger Deering stated that if FBD wins, it will seriously curtail the ability of the FSPO to investigate certain complaints. Does FBD have a case or are they just playing for time?
 
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Brendan Burgess

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It's a difficult one.

When making the AIB Prevailing Rate complaint to the Ombudsman, we were very concerned that a case would get to the High Court before the Ombudsman made a decision.

We had two worries -
1) That it would be poorly argued and that AIB would win
2) That AIB would do what FBD is doing and say, that as the issue is before the High Court, the Ombudsman should defer to the High Court. We thought that they might even try that after the Ombudsman issued a preliminary decision in our favour.

The Ombudsman has a much broader remit and so a consumer is more likely to get a favourable ruling from the Ombudsman than from the High Court.

It will be up to the High Court to determine if FBD's argument is valid. It's certainly an argument worth clarifying with a High Court decision.

Brendan
 

DARKMATTERS

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Brendan,

There is a High Court case that Justice Simmons remitted to the Court of Appeal on the 10th of this month (on an application by the FSPO) entitled Utmost PaneuropeDAC v Financial Services and Pension Ombudsman, that is worth a read.

It seems the matter that FBD are making is in relation to Section 50 of the FSPO Act (matter already before the court) and the interpretation of same. I thought the FSPO had the ability to make decisions regarding individual complaints to its office on specific non law matters, such as fairness, justness etc., as well as legal issues such as a breach of contract that are unique to each individual complaint, that an Irish court cannot.

I think it would be highly unfair for consumers, that once a matter is before the High Court that deals with the same issue, the FSPO is precluded from investigating or adjudicating on individual complaints. This is because the High Court cannot make legal determinations regarding non law issues. The Irish courts cannot determine matters of reasonableness etc Just my thoughts.
 

Brendan Burgess

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I think it would be highly unfair for consumers, that once a matter is before the High Court that deals with the same issue, the FSPO is precluded from investigating or adjudicating on individual complaints.

Against that, the legislation allows a consumer to go to either the Ombudsman or the High Court.

So I can see it from FBD's point of view. It would be a bizarre outcome if the High Court upheld a case and the Ombudsman rejected the same case, or vice versa.

But what I think doesn't matter. Let the High Court decide.

Brendan
 

DARKMATTERS

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Against that, the legislation allows a consumer to go to either the Ombudsman or the High Court.

So I can see it from FBD's point of view. It would be a bizarre outcome if the High Court upheld a case and the Ombudsman rejected the same case, or vice versa.

But what I think doesn't matter. Let the High Court decide.

Brendan

I see it from the consumers perspective, if I had a complaint lodged with the Ombudsman that was based on non law issues, the fact that the same matter is before a court (obviously on a legal issue) why should my complaint not be investigated or adjudicate upon by the FSPO?
 

Brendan Burgess

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Can you explain what you mean by a "non-law" issue?

In the AIB Prevailing Rate case, we asked the Ombudsman to rule on the interpretation of Clause 3.2.

If the same question was currently being considered by the High Court, I could see why AIB might ask the Ombudsman to defer a decision.

If someone had a "non-law" issue e.g. that AIB had maladministered their account, then that would not be affected.

Brendan
 

DARKMATTERS

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Can you explain what you mean by a "non-law" issue?

In the AIB Prevailing Rate case, we asked the Ombudsman to rule on the interpretation of Clause 3.2.

If the same question was currently being considered by the High Court, I could see why AIB might ask the Ombudsman to defer a decision.

If someone had a "non-law" issue e.g. that AIB had maladministered their account, then that would not be affected.

Brendan
Brendan,

The FSPO enjoys a “hybrid” jurisdiction, making decisions based on both contractual (purely legal) issues, and non-contractual (non-law) issues. Non-contractual issues include the conduct of the Financial Service Provider which, even if it is technically found not to be unlawful, may be considered unreasonable or unjust in some way. Examples of this would be unreasonable behavior, non-transparency, issues of fairness, and conduct that would not be considered just and equitable given the full circumstances of the individual complaint.

Another question that must also be asked is; what happens if your complaint to the Ombudsman has both legal and non-legal issues, like breach of contract and maladministration for example. Is it fair that because another complaint regarding the same matter (but excluding the maladministration part) is before a court, your complaint is automatically excluded from being investigated or decided upon by the FSPO?
 
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Brendan Burgess

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This is the relevant section of the Act:

Section 57 KB (4)

(4) The Financial Services Ombudsman is entitled to perform the functions imposed, and exercise the powers conferred, by this Act free from interference by any other person and, when dealing with a particular complaint, is required to act in an informal manner and according to equity, good conscience and the substantial merits of the complaint without regard to technicality or legal form.

There is no doubt that this wider discretion gives the consumer a better chance with the Ombudsman than with the High Court.

It will be interesting to see how the Court rules in FBD's challenge.

Brendan
 

DARKMATTERS

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Section 57 KB (4)

(4) The Financial Services Ombudsman is entitled to perform the functions imposed, and exercise the powers conferred, by this Act free from interference by any other person and, when dealing with a particular complaint, is required to act in an informal manner and according to equity, good conscience and the substantial merits of the complaint without regard to technicality or legal form.

There is no doubt that this wider discretion gives the consumer a better chance with the Ombudsman than with the High Court.

It will be interesting to see how the Court rules in FBD's challenge.

Brendan,


Brendan,

The Act you are quoting from is the old FSO Act, this was replaced in full by the FSPO Act 2017 in January 2018.
 
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DARKMATTERS

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The old FSO Act could be utilised by legal counsel for the FSPO in defending the FBD action, as it gives insight into the Dail’s intent as to the role of the Financial Ombudsman.
 

DARKMATTERS

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Hi Brendan,

I am in total agreement with you. It would be totally unjust (and against the very intention of the legislation) for a consumer who had a complaint before the FSPO, that contained legal and non legal issues relating to a matter that is/was before any court, to be automatically excluded from the jurisdiction of the FSPO to investigate or adjudicate upon same, due to the financial service provider attempting to invoke section 50 of the Act.

In simple terms, the matter complained about could not be before any court, as any court cannot make legal determinations on non legal issues like reasonableness, fairness, transparency, maladministration etc.
 

DARKMATTERS

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I can see FBD’s argument as well; but the fact that a matter is before a court should not automatically exclude a complaint that relates to the same matter but which includes non law issues as part of the complaint from being investigated and adjudicated upon by the FSPO.
 

Brendan Burgess

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So, should the Ombudsman put it on hold until the legal matters have been determined by the Court?

Then he can decide on the "non-law" issues.

Brendan
 

DARKMATTERS

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Personally, I think it would not be just and equitable to the consumer to put the FSPO’s investigations and adjudications on hold until the case is heard through our court system. In this jurisdiction, court cases can take a long time to get on for hearing (particularly more so, during the current pandemic). My thoughts would be that the FSPO should continue to investigate and adjudicate on individual complaints that deal with the same matter (but which are particular to the individual). If the financial service provider or the consumer are of the view the decision made by the FSPO is incorrect, they can always appeal same to the High Court. Justice delayed is justice denied. That maxim also applies to statutory bodies tasked with adjudicating on consumer complaints, as well as to the courts (Article 47 of the Charter of Fundamental Rights).
 
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DARKMATTERS

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The point I am making is this; if a complaint has been made to the FSPO on a matter that is already has/is before a court, but the subject matter of the complaint itself refers to legal and non legal issues regarding the alleged conduct of the provider, then the FSPO should be allowed to investigate and adjudicate on the complaint, as this specific conduct complained about has not been before a court, although the matter to which it relates may have been. This is the subtle distinction that I am trying to articulate.
 

Brendan Burgess

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The subtle distinction that I am trying to articulate is

Your point and mine don't matter.

FBD should make their argument.
The FSPO should make theirs.

And a High Court judge will decide how the law is to be interpreted.

If you are not happy with the High Court decision, then you would have to lobby to change the law.

Brendan
 

DARKMATTERS

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The High Court cannot decide on non legal issues, it is settled law that deference should be shown to the FSPO on its determination of these non legal issues and it is settled law that the FSPO show deference to the courts on legal issues (Governey v FSO). If a matter is before a court, it is only before a court regarding a dispute concerning a legal issue (such as a breach of contract). Therefore, if a complaint is before the FSPO that contains both legal and non legal issues regarding the same matter, the FSPO should NOT be automatically precluded for investigating and adjudicating on the complaint as this would be unjust to the consumer.
 
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