Court Orders Financial Services Ombudsman to Hold an Oral Hearing

Facts

In O'Shea v The Financial Services Ombudsman [2016] IEHC 6, Mr O'Shea complained of the failure of the Financial Services Ombudsman (the FSO) to hold an oral hearing into his complaint that his home insurance company had unfairly rejected two claims. 

The FSO had found that the insurer had breached the Central Bank’s Consumer Protection Code but it rejected the substance of the complaint, namely that the insurer had not honoured its contractual obligations.

The FSO stated in his Finding that:

“Having reviewed and considered the submissions made by the parties to this complaint, I am satisfied that the submissions and evidence submitted do not disclose a conflict of fact such as would require the holding of an oral hearing to resolve any such conflict. I am also satisfied that the submissions and evidence submitted are sufficient to enable a Finding to be made in this complaint without the necessity for holding an oral hearing.”

However Mr O’Shea contended that there were substantial differences of fact arising between him and the insurer which merited an oral hearing.

Decision

Oral Hearing
The court noted that the FSO offers a free, expeditious and informal means of resolving complaints and that if oral hearings were to become standard it could make the process cumbersome and slow. However, the court also noted that the rich can generally litigate from the outset but others are driven to some extent by financial circumstance, to turn to the FSO in the first instance. If such individuals are refused an oral hearing they can be potentially denied that meaningful access to the courts which a rich man can obtain from the start.  

The FSO pointed out that at no stage did Mr O’Shea request an oral hearing and contended that the failure to seek one supported the view of the Ombudsman that it was not necessary. The court rejected this contention pointing out that Mr O’Shea was 79 years old and making a first-time complaint to the FSO, un-advised by a solicitor. The failure to seek an oral hearing in those circumstances could not be an implicit acknowledgement that the FSO was correct to deny him such a hearing.

The court considered that the interests of fairness demanded an oral hearing because of the significant differences of fact between what was alleged by the insured and the insurer. The court noted that while there would be simple cases in which the FSO would not be required to conduct an oral hearing, the complexity and sophistication of the present case meant an oral hearing was warranted. Accordingly Barrett J remitted the matter to the FSO for an oral hearing.

Applicable Policy Documentation
There was also a dispute between the parties as to the applicable policy documentation.  Mr O’Shea contended that if there were any revisions to his originally executed policy he never received them and was never told of them, so he could not be bound by them. The insurer argued that when Mr O’Shea renewed his policy each year he was caught by the terms and conditions applicable to that year.  The court held that Mr O’Shea was entitled to have his case decided by reference to the policy that he concluded with the insurer and noted that it had not seen any clause that gave the insurer a right to vary terms and conditions without notice to the policyholder. The court pointed out that any such provision would probably present a difficulty under the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995.

The court noted that this dimension of Mr O’Shea’s complaint appeared to have gone unexplored by the FSO which accepted the applicability of 2007 policy documentation without any meaningful exploration of the issues. The court also did not consider that Mr O’Shea’s complaints were fully met by the FSO stating in its Finding that even if it had decided his case by reference to the contract for which Mr O'Shea contended, it would not have changed matters. The court recommended to the FSO that it might wish to give more detailed attention to this issue in any further Finding on the matter.

Comment

The interesting sub text of this judgment is that, in circumstances where the complainant to the FSO is a "vulnerable" individual, there is a certain onus on the FSO to be more proactive in ensuring that all aspects of the complaint are comprehensively dealt with, even if not completely articulated by the complainant.

For more information please contact Paula Mullooly at pmullooly@algoodbody.com

Date Published: 2 February 2016