Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have got a general piece which I will read. The briefing is by way of question and answer. The question is: will the Minister allow for an appeal and a full rehearing to be made to the Circuit Court? The complainants can decide at the outset whether to bring their dispute to the appropriate court, depending on the quantum of their claim or alternatively to complain to the ombudsman free of charge. There is an initial decision to go to the ombudsman when a complainant could go to the courts directly. The ombudsman is designed to be a low cost alternative to the courts system. The ombudsman has significant powers to investigate and examine witnesses similar to a High Court or a judge. However, there is the option of a High Court review of the ombudsman's decision as set out in head 48 but it is not a de novoappeal. It is a review of the actions of the ombudsman to see if there was an error in law.

Allowing for an appeal instead to a Circuit Court of a decision of the ombudsman brings challenges. For instance, the provider could appeal every decision made by the ombudsman in favour of the complainant in the hope that the court will provide a different outcome in their favour. The consumer would then have to defend the appeal to the Circuit Court with all the attendant expense.

The provider is in a considerably stronger position both to the go to the Circuit Court and to succeed at the Circuit Court. The real effect is not only that the provider is in a stronger position on a case-by-case basis, but the existence of the threat of an appeal by the provider operates as a deterrent to consumers to complain generally. The complainant would be exposed to the risk of liability for costs of a successful Circuit Court appeal by the provider.

In the existing statutory appeal to the High Court the complainant is shielded by the high threshold, which is applied to the statutory appeal, and by the fact that the Financial Services Ombudsman can be a party to the complaint and thus take the role of defending its own decision. Neither of these factors operate in a Circuit Court de novoappeal so the real effect is not only that the provider is in a stronger position on a case-by-case basis, but that the existence of the threat of an appeal by the provider operates as a deterrent to consumers generally. The more subtle and long-term risk here is that it becomes a deterrent to the complainants bringing their case, even at first instance, as they could be exposed to the cost of the provider working their way up through the appeals system of the courts. In addition, allowing for a full rehearing could allow for a situation where people use the ombudsman as the first step in litigation before inevitably going before the courts. This would result in a floodgate scenario for the office which would have implications for staffing and the effectiveness of the office to process and determine complaints.

The ombudsman is a statutory officer with the powers of a High Court judge in carrying out investigations and examining witnesses. The ombudsman holds an important public role and to have appeals go to a lower court would undermine the work of the ombudsman. A review by the High Court is more appropriate.

Finally, where a Circuit Court appeals process may appear to benefit the consumer as it is cheaper it should be borne in mind that the Circuit Court can only award in cases up to €75,000 where the ombudsman can award compensation up to €250,000. In addition, the Circuit Court will not hold an investigation as the ombudsman can. Instead the consumer will be obliged to prove his or her case de novoto the civil standard without the benefit of the ombudsman who can look into all of the codes of practice and regulatory standards in addition to the facts of the case. On balance, therefore, I do not believe that an appeal to the Circuit Court would provide greater consumer protection.

To answer the Senator's question, it is not a constitutional issue. There is an appeal intended but it is confined to a point of law. It is a point of law appeal to the High Court. That is the first position. To have an appeal to the Circuit Court one would have to be equal in the rights given to the complainant and to the provider. The argument in the briefing note I have given the committee is that an appeal to the Circuit Court would tip the balance in favour of the provider rather than the complainant as the provider would be in a better position to carry the costs and could appeal de novoevery new complaint and make it very expensive for a complainant. As a consequence, obviate the inexpensive access that a complainant would have to the ombudsman by putting a Circuit Court appeal on as a tail. As a consequence, this might operate as a deterrent to complainants and undermine what our intention is in going the ombudsman's route.