Why The Irish Judiciary needs to knock some sense in to Politicians, Bankers and Regulators!

11th Jun 2013

The PPI scandal in Ireland is not just a tale of bankers ripping off their customers.  It is developing into a tale of regulators unfit for purpose, an Ombudsman service that is not up to the job and Politicians with an eye on finances and not fairness.

The banks are doing a great job of manipulating the Central Bank (who was asleep at the wheel when the banks were misbehaving in the first place). The Central Bank is carrying out a review of PPI mis-selling to their credit and it is hoped that this will lead to redress.

However, where the Central Bank is going badly wrong is in telling consumers that they can sit on their hands and do nothing in the meantime. That could be a disastrous tactic for people who will not be able to bring a claim to either the Financial Services Ombudsman or the Courts if their PPI was taken out over six years ago.

Regrettably the National Consumer Agency (a Government financed agency) has effectively also told people to sit on their hands.

The Limitation issue (that you can’t go to FOS or the Courts if the PPI started more than 6 years ago) is a major problem for many victims of PPI mis-selling. The matter has been raised in the Dail and in answers to written questions last week, the Minister for Justice and Equality has said that he is to raise the issue with the Minister for Finance (for it is he who has responsibility for FOS). We therefore have an extraordinary position where the Minister for Finance is deciding the rules of the game for a scheme that is designed to give victims of mis-selling justice. The Minister of Finance appears to be in a rather conflicted position when he is also looking at the Nation’s finances and the de-facto Nationalised banks.

I will throw into the mix at this stage the decision making record of the FOS. We have had some recent decisions on behalf of clients that are frankly extraordinary and suggest that the decision makers there are either not up to the job or are being leaned on.

A decision on the 27th May is a case in point: The bank firstly told us that the borrower had requested PPI on a written application form. They then changed their tune and said that it was in fact in a telephone conversation but said that there was no recording of the call (surprise surprise!). Against this was our client who said that they definitely did not ask for PPI.

At the heart of matters was a factual dispute, but despite this FOS decided that they were “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”. Such decisions show not only a lack of legal insight but a lack of common sense. Suffice to say that FOS went on to say that they were not compensating the client save for €500 for misleading them over the written application.

What makes these poor decisions worse however is the fact that that they are virtually incapable of appeal. The appeal process is by way of application to the High Court where the entry point for the unreasonableness of the decision is set so high as to make appeals all but impossible. (It’s no surprise that the banks’ lawyers have been telling us it’s wrong to go to Court and issue proceedings whilst there is a free alternative available! One which upholds only a fraction of the complaints submitted to it compared with its UK counterpart).

In all we are in a bit of a mess. The present situation shows the great need in a democracy for the separation of powers. The legislature and the executive cannot be left to sort these problems. We may all have a great deal of sympathy for the situation they find themselves in and can see the problem they face, however Justice needs to be served. It is for precisely this reason that we have a free and independent Judiciary. I for one look forward to the application of their common sense and fairness.

Check out Andrew’s guest column in the Irish Post.

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