Insurance Contracts CP - Law Reform Commission

estrictions on the ability of the Ombudsman to hear some complaints, the Ombudsman is directed ―as far
as possible, [to] try to resolve the complaint by mediation‖ 22 The Ombudsman must, following
investigation of a complaint, make a finding in writing (save where the complaint has been settled or
withdrawn) that the complaint is substantiated, in whole or in part, or is not substantiated. Section 57
CL(2) provides that:
―(2) A complaint may be found to be substantiated or partly substantiated only on one or more
of the following grounds:
(a) the conduct complained of was contrary to law;
(b) the conduct complained of was unreasonable, unjust, oppressive or improperly
discriminatory in its application to the complainant;
(c) although the conduct complained of was in accordance with a law or an established
practice or regulatory standard, the law, practice or standard may be, unreasonable ,
unjust or oppressive or improperly discriminatory in its application to the complainant;
(d) the conduct complained of was based wholly or partly on an improper motive, an
irrelevant ground or an irrelevant consideration;
(e) the conduct complained of was based wholly or partly on a mistake of law or fact;
(f) an explanation for the conduct complained of was not given when it should have
been given;
(g) the conduct complained of was otherwise improper.‖
1.31 For present purposes the most noteworthy of these grounds is (c): the Financial Services
Ombudsman may uphold a complaint, notwithstanding that the conduct was compliant with the law,
established practice or a regulatory standard, because of the unreasonable, unjust, oppressive or
improperly discriminatory impact that the law, practice or standard had on the individual complainant.
1.32 There are signs that even the FSO complaints mechanism is becoming increasingly caught up
in litigation. Applications for judicial review 23 and declarations that the Ombudsman has acted ultra vires
his legislative powers 24 have become a feature of the regulatory landscape, undermining what
MacMenamin J, in Hayes v Financial Services Ombudsman, 25 described as a legislative model which is
―an informal expeditious and independent mechanism for the resolution of complaints. The respondent
seeks to resolve issues affecting consumers. He is not engaged in resolving a contract law dispute in the
manner in which a court would engage with the issues.‖ In contrast, Hogan J, in Koczan v Financial
Services Ombudsman 26 seems to have viewed the task of the Financial Services Ombudsman as much
more difficult than merely resolving contract disputes: the task ―runs well beyond that of the resolution of
contract disputes in the manner traditionally performed by the courts… the Ombudsman must, utilising his
or her specialist skill and expertise, resolve such complaints according to wider conceptions of et aegus
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On the mediation requirement, see the discussion of J & E Davy v Financial Services Ombudsman [2008]
IEHC 256, [2010] IESC 30 in the Commission‘s Report on Alternative Dispute Resolution: Mediation and
Conciliation (LRC 98-2010).
J & E Davy v Financial Services Ombudsman [2008] IEHC 256, [2010] IESC 30; Square Capital Ltd v
Financial Services Ombudsman [2009] IEHC 407. See ―Serious errors in Ombudsman Ruling‖ The Irish
Times, 19 November 2011.
Quinn Direct v Financial Services Ombudsman [2007] IEHC 323, Caledonian Life v Financial Services
Ombudsman [2010] IEHC 384.
High Court, 3 November 2008.
[2010] IEHC 407. For a decision in which the High Court effectively ruled on the duty of disclosure in
insurance contract law see FBD Insurance plc v Financial Services Ombudsman [2011] IEHC 315.
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