Crossing the Legal Rubicon: The Battle for Control over Oral Hearings at the Financial Services Ombudsman Bureau

Date01 January 2014
AuthorPeter Dunne
Crossing the Legal Rubicon: The Battle
for Control over Oral Hearings at the
Financial Services Ombudsman Bureau
The Financial Services Ombudsman (hereinafter “the Ombudsman”) is
an independent, statutory ofcer who deals with unresolved complaints
brought by consumers in relation to their individual dealings with a
nancial services provider (hereinafter “FSP”).1 He is established under
Part VIIB of the Central Bank Act 1942 (as inserted by s.16 of the Central
Bank and Financial Services Authority Act 2004). The Ombudsman,
and the Bureau of the Financial Services Ombudsman (hereinafter “the
Bureau”), was set up in response to a perceived need to establish a more
concrete Ombudsman scheme, underpinned by statute, as part of an overall
enhanced regulatory framework for nancial services.2
In designing the Ombudsman, the Oireachtas showed a clear intention3
that the Bureau would operate in an “informal” and “expeditious”
manner.4 Under s.57BK(4) of the Act, the Ombudsman is enjoined to act
“without regard to technicality or legal form.”5 The Ombudsman is not an
extension of the judicial branch, nor a miniature version of the Commercial
Court.6 Rather, the Bureau is an independent ofce by which all consumers,
irrespective of resources or legal expertise, can seek a fair resolution to their
dispute with a FSP.
A Finding of the Ombudsman legally binds both a complainant and
a FSP,7 and a party who is unhappy with a decision of the Ombudsman
may appeal to the High Court.8 In recent years, dissatised parties have
1 http://www. [Accessed 8 July 2013]
2 Ibid [Accessed 8 July 2013], See Mary Donnelly, “The Financial Services Ombudsman:
Asking the ‘Existential Question’” (2012) 19 (1) Dublin University Law Journal 229
3 See Sam Collins, “When must the Financial Services Ombudsman hold an Oral
Hearing?” (2012) 11 Commercial Law Practitioner 219; Trevor Murphy, “A Review
of the Jurisdiction and Procedure of the Financial Services Ombudsman and Recent
Trends” (2013) 20 (5) Commercial Law Practitioner 102
4 Central Bank Act 1942 (as inserted by s.16 of the Central Bank and Financial Services
Authority Act 2004) (hereinafter “the Act”) s.57BB(c)
5 The Act, supra note 4, s.57BK(4)
6 Lyons v Financial Services Ombudsman [2011] IEHC 454, p.10 (hereinafter Lyons”)
7 The Act, supra note 4, s.57CI(9)
8 Ibid, s.57CL
02 Dunne.indd 32 29/05/2014 10:49
Crossing the Legal Rubicon 33
increasingly chosen to exercise their statutory right to appeal.9 This increased
litigation creates legal and practical challenges for the Ombudsman. In
addition to the considerable nancial resources which must be expended
on defending cases, there is also the concern that judges, divorced from the
daily reality of nancial services, may not fully appreciate the role which the
Ombudsman plays within that sector.10 This concern is most pronounced
when analysing the “fairness” of the Ombudsman’s procedures. While the
Act requires a relatively low degree of formality, successive High Court
decisions appear to have diminished the impact of that obligation in the
light of constitutional and administrative law principles.
One aspect of fair procedures—the decision whether to hold an oral
hearing (“the oral hearing decision”)—has proven particularly conten-
tious.11 From a starting point of relative deference, the courts now require
oral hearings in a wide array of circumstances, notwithstanding decisions
of the Ombudsman to the contrary. The increasing role which judges play
in deciding procedures places additional pressures upon the Ombudsman
and restricts the Bureau’s capacity to act as an informal arbiter.
This article proposes to critically analyse the current High Court and
Supreme Court case law on oral hearings before the Ombudsman. Part I
traces the evolution of court scrutiny of the oral hearing decision, moving
from an initial position of deference towards the new judicial desire for
stricter review. Part II identies three specic aspects of the oral hearing
decision, and considers how judicial focus on these areas hampers the
informal and expeditious resolution of disputes. Part III explores the wider
policy implications of the recent case law, and suggests that the oral hearing
debate has become a symbol for a wider inter-institutional power play.
Finally, Part IV seeks to place the Irish experience in context and discusses
how courts have addressed similar questions in England and Wales.
Part I. Increased Judicial Scrutiny of the Oral Hearing Decision
The Act does not expressly require the Ombudsman to hold an oral hearing
as part of his adjudication procedures nor has the Financial Services
Ombudsman Council provided guidance on the holding of such hearings
under its power to issue regulations.12 Section 57CE(1) of the Act enables the
Ombudsman, for the purposes of investigating a complaint, to require a FSP
to give information orally or in writing. Under s.57CE(4), the Ombudsman
9 Donnelly, supra note 2; Murphy supra note 3
10 Donnelly rejects this criticism of the Courts, arguing that “a closer look at the case law
to date does not suggest an overly interventionist judiciary. In fact, for the most part,
the judiciary has been aware of the value of the service provided by [the Ombudsman]
and the costs of an overly interventionist approach”; Donnelly, supra note 2
11 Collins, supra note 3; Murphy, supra note 3
12 The Act, supra note 4, s.57BF
02 Dunne.indd 33 29/05/2014 10:49

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