Recent Decisions Of The Financial Services Ombudsman, April 2012

Author:Ms Orla O'Connor and Robert Cain
Profession:Arthur Cox
 
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The High Court has examined the extent of the powers of the Financial Services Ombudsman (the "Ombudsman") on a number of occasions in the past year. These decisions demonstrate a deference to decisions taken by the Ombudsman in relation to matters within its jurisdiction and a continued reluctance by the High Court to interfere with decisions taken by the Ombudsman. The High Court's power to hear an appeal of a decision of the Ombudsman under section 57CL of the Central Bank Act 1942 should not be regarded as a new hearing of the complaint, but rather a review of the Ombudsman's decision making process and procedure. This approach is in keeping with the precedent set by the landmark 2006 decision in Ulster Bank v Financial Services Ombudsman and Others1 in which it was held that decisions of the Ombudsman would only be successfully challenged where the complainant can show that the decision reached was "vitiated by a serious and significant error or a series of such errors." Caffrey v Financial Services Ombudsman2 - 12 July 2011 Facts This case arose from an investment made by the appellant in a product offered by Bloxhams described as the "Dresdner Bond". The appellant claimed that in a telephone conversation with a Bloxham's employee, he was given to understand that the investment would be in a fund which would guarantee a given return and that he was not informed that there was a swap agreement in place with Morgan Stanley in respect of the Bond. The content of this call was disputed by Bloxhams. The appellant argued that at the hearing before the Ombudsman that there was a "blanket acceptance" of Bloxham's evidence and that this constituted a "serious and significant error". In particular, the appellant contested the fact that the Ombudsman did not seek a recording of the telephone conversation, nor was written evidence from the Bloxham's employee sought. Held The High Court held that the Ombudsman's decision not to require Bloxhams to produce a telephone recording or written evidence was not a "serious and significant error" because (i) no such telephone recording was in existence, and (ii) any account by the employee of the conversation would be unreliable given the delay between the facts and hearing date (five years). Furthermore, the High Court held that the failure by the appellant to request that an oral hearing take place at the time of the decision was of relevance in assessing whether the Ombudsman had on unreasonable grounds...

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