High Court tells Ombudsman to look at Danske Bank's rate increase

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Raging Bull

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http://www.independent.ie/business/...e-hike-decision-says-high-court-30629969.html


The Ombudsman had thrown out a complaint by a North County Dublin couple that the bank had acted wrongly in increasing interest rates on six buy-to-let investment mortgages and the couple’s family home mortgage at a time when rates had fallen to historically low levels.

Mr Justice Gerard Hogan today ruled as ambiguous a clause in Danske Bank’s terms and conditions which stated that rates of interest would be altered in response to market conditions.
 
The FSO really does not have a clue if they think Market Conditions meant rates go up...as far as I know Danske needed no bail out so their funding would be more normal and tied to movements in ECB rates...fair play to him for his logic and for calling a spade a spade
 
Very interesting case. I think it all comes down to what "market conditions" means.

If "moving in line with market conditions" means:
--> ECB rates. Dankse have not complied with the T&C's as ECB rates have fallen.
--> Euribor rates. Dankse have not complied with the T&C's as Euribor rates have fallen.
--> Cost of funding. Dankse have not complied with the T&C's as deposit rates have declined substantially, ECB funding money is being given away for virtually free and money market rates have declined.
--> Competition. Danske have complied with the T&C's because they have competitors have similar mortgage rates.
 
Judge Hogan said the Ombudsman erred in concluding that the words “in response to market conditions” were clear when they were not and the Ombudsman’s decision could not be allowed to stand. He set aside the decision and remitted the matter to the Ombudsman for a fresh determination of the complaint “in a manner not inconsistent with this judgment.”
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So the Ombudsman has to rehear the complaint but must bear in mind that this term is vague.

A hard decision. Certainly a SVR mortgage is not a tracker.

Brendan
http://www.independent.ie/business/...high-court-30629969.html#sthash.Qjhp49sh.dpuf
 
Well done to the people but the most interesting bit is this.....we will have to wait to written judgement but this throws the whole function of FSO into doubt to a certain extent

"
Judge Hogan said the resolution of the issue before the court raised once again the fundamental question of what the true role of the Ombudsman was and if the court should defer to the Ombudsman on the question of contract law.
He said it was never the intention of the Oireachtas that a complainant should be disadvantaged by electing to make a complaint to the Ombudsman rather than by proceeding in the ordinary courts.
It would be inappropriate for the court to defer to the Ombudsman on the issues of contract law and only interfere if the interpretation of the contract was somehow unreasonable or irrational. "
 
I find this case very complicated. Basically the court is saying the terms are ambigious, and that the ombudsman was wrong in his determination, so now the ombudsman has to make a new determination, based on what though? The court decision.

Anyway I hope they win, means my interest rate with Ulster can also be challenged.

Another strange aspect to the judgement was the judges references to whether the couple had the right to go to court rather than the ombudsman, I always understood one had no right to go to court unless you went to teh ombudsman first.

And these are very brave people, who is paying the costs, did the judge not rule on that?
 
Bronte said:
I find this case very complicated. Basically the court is saying the terms are ambigious, and that the ombudsman was wrong in his determination, so now the ombudsman has to make a new determination, based on what though? The court decision.
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The Ombudsman was wrong to say that the term was clear. That is all that the High Court has said. The High Court is clear that the term is ambiguous. Now the Ombudsman must hear the case again in that light.


Anyway I hope they win, means my interest rate with Ulster can also be challenged.
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Does your Ulster Bank mortgage have a term like that? I doubt it. If it does have such a term, then you should complain immediately and not wait for this case to be processed.

I always understood one had no right to go to court unless you went to teh ombudsman first.
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Not sure where you got that. A consumer can go directly to the Circuit Court or the High Court. Should I go to the Ombudsman or to Court?

And these are very brave people, who is paying the costs, did the judge not rule on that?
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As they represented themselves, they won't have much costs. If they apply for costs, they would probably get them and the Ombudsman would have to pay them.
 
Raging Bull said:
Well done to the people but the most interesting bit is this.....we will have to wait to written judgement but this throws the whole function of FSO into doubt to a certain extent

"
Judge Hogan said the resolution of the issue before the court raised once again the fundamental question of what the true role of the Ombudsman was and if the court should defer to the Ombudsman on the question of contract law.
He said it was never the intention of the Oireachtas that a complainant should be disadvantaged by electing to make a complaint to the Ombudsman rather than by proceeding in the ordinary courts.
It would be inappropriate for the court to defer to the Ombudsman on the issues of contract law and only interfere if the interpretation of the contract was somehow unreasonable or irrational. "
Click to expand...
.............

Delighted to see this from Judge Hogan;

From what I remember of FSOs judgements and their comments to Dial Committees, the FSO appear to have relied too heavily on Contract Law and in effect ignore Consumer Acts.
From my perspective, it appears that if a consumer agreed to something ie created a (contract) , then the Ombudsman relied on Contract Law rather than whether (contract) was fair.eg on PPI (on which I have an interest)

In effect in too many cases by creating a contract the Consumer loses.
Am I correct in this ?

Very strong people to take this case, wish them well.
 
Brendan Burgess said:
The Ombudsman was wrong to say that the term was clear. That is all that the High Court has said. The High Court is clear that the term is ambiguous. Now the Ombudsman must hear the case again in that light.


Does your Ulster Bank mortgage have a term like that? I doubt it. If it does have such a term, then you should complain immediately and not wait for this case to be processed.


Not sure where you got that. A consumer can go directly to the Circuit Court or the High Court. Should I go to the Ombudsman or to Court?


.
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Potentially this apparently affects a lot of people according to this:

http://www.independent.ie/business/...s-to-take-on-lenders-over-rates-30634246.html

And yes I'll now have to go back and review my mortgage documentation, this after I already had a fight with them over being charged investor rates which I took to the ombudsman. At the time I didn't realise of course that my odds on winning were so abysmal, that appealling to the High Court impossible due to costs, that banks to use the Ombudsman as it's complaints department, and that I should have hired poster Padkiss or somelike that to formulate my complaint in the correct manner.
 
BB, it's clear to me why the ombudsman must look at the case again, but this bit is not clear to me:

Judge Hogan said the resolution of the issue before the court raised once again the fundamental question of what the true role of the Ombudsman was and if the court should defer to the Ombudsman on the question of contract law.

He said it was never the intention of the Oireachtas that a complainant should be disadvantaged by electing to make a complaint to the Ombudsman rather than by proceeding in the ordinary courts.

It would be inappropriate for the court to defer to the Ombudsman on the issues of contract law and only interfere if the interpretation of the contract was somehow unreasonable or irrational.

He said Mr Justice Barr in 1994 had forcefully made the point that statutory interpretation was solely a matter for the courts and no other body had authority to usurp the power of the court in performing that function.
 
EBS Variable

My 2008 mortgage from EBS states that the variable rate will be set at "prevailing market rates" as opposed to "in line with market conditions".
 
My Dansk mortgage has a similar clause

"Rates of Interest are altered in response to market conditions and may change at any time without prior notice and with immediate effect."
 
DingDing said:
Thanks Brendan, just thinking that myself.
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You might be in line for a nice little windfall, can you post up the wording of your complaing, it might help others who are a bit lazy. If they copy paste it's easier. I like the idea of customers fighting back.
 
Previously in Dial Committee hearings it was very apparent that Ombudsman had a very strong leaning towards Contract Law .Maybe they are correct in Law?
Given that Contracts are drawn up on lenders terms, that would explain the poor success rate for consumers via Ombudsman.
It also hobbles the Consumer Protection Code ,in that Contract Law trumps Consumer Protection Code.

It is blindingly obvious that Variable Rate Mortgages were taken out to move broadly in line with funding Costs of the Lenders.That was the clearly implied Contract.


The Lenders have in charging 60% more than Euro norm left their greedy little selves in a very interesting quandary.

Given the (protection) Banks are getting from Government ,I think this will be a hard fought battle.
I strongly advise anyone with (ambiguous) wording to lodge their claim with Mr Bank now.
The reason I say that, is that given the huge potential cost to Mr Bank, Mr Government will bring in some Clause to the effect of only future mortgages.

. I do not trust,lenders,government or ombudsman.
 
Danske Bank was bailed out by the Danish National Bank during the Financial Crisis and one of the stipulations in the bail out was to withdraw from retail banking in the Irish Market.

Danske bank claim they do not obtain funding from the ECB. However having said that the Danish National Bank has pegged the Danish Krone to the euro so if the ECB drops interest rates the Danish National Bank will as well, and vice versa. Danske Bank increase and decrease interest rates in line with fluctuations in the Danish National Bank rate.

During the financial crisis the Danish National Bank had to loan Danish Banks, including Danske Bank euros and dollars (so that they could pay off and issue loans). These banks could not obtain market funding as the liquidity of the market had effectively dried up. The Danish National Bank expended close to 40% of its foreign currency reserves of euro and dollars in doing this and also became a target of international currency speculators.

The situation became so grave that the Federal Reserve and the ECB opened swap lines with the Danish National Bank. These swap lines allowed potentially limitless supplies of euro and dollar to the Danish National Bank. This stopped the speculators in their tracks and calmed the money markets.

It would be totally disingenuous for Danske Bank to say that they do not obtain funding from the ECB, so the setting of the ECB interest rate is irrelevant to them. This is what Danske Bank said to the F.S.O. in the Millar v Danske Bank and F.S.O. (See judgment 422mca/2013 on 30/9/2014 on the courts.ie website). Without the ECB Danske bank would in all probability not exist today. The interest rates set by the ECB are very relevant to Danske Bank, as the Danish National Bank shadows these fluctuations, as it's currency is pegged to the euro.

The new court of appeal would do well to look at this matter in the case Of Donna and Robert Millar v Danske Bank and the F.S.O.
 
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If the Millers win their appeal to the Court of Appeals, would the decision just apply to them or would the court have the power to make Danske apply this to all affected customers.
 
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