Ireland: Recent Decisions Of The Financial Services Ombudsman, April 2012

Last Updated: 27 April 2012
Article by Orla O'Connor and Robert Cain

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


  • 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.


  • 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 decided not to hold an oral hearing. Finally, the High Court held that the Ombudsman correctly placed reliance on the fact that the appellant was an "experienced investor" who understood the risks associated with investments of this nature.

FBD Insurance plc v Financial Services Ombudsman3 - 29 July 2011


  • The facts of this case arose from a successful application by an insured individual to the Ombudsman relating to the failure by FBD Insurance to pay out under a claim made under his motor insurance policy. The refusal arose because, FBD claimed, the insured had failed to properly disclose details of his criminal convictions. This resulted in FBD's decision to void the policy.
  • The convictions related to crimes such as theft and intoxication in a public place, and there were no convictions for road traffic offences. The Ombudsman ruled that FBD had inappropriately refused to pay out under the policy and found that the criminal convictions in question did not constitute a sufficient reason for the decision to void the insurance policy. »» Before the High Court, FBD argued that the existence of the undisclosed convictions would have affected the insured's premium. Further, it was argued that the ruling was inconsistent with previous rulings of the Ombudsman.


  • The High Court held that the Ombudsman's decision was not vitiated by serious or significant error. Hedigan J. quoted from the relevant legislation which enjoins the Ombudsman to proceed in an "informal manner" and "without regard to technicality or legal form." The High Court noted that case law on administrative tribunals requires a lesser standard of reasons to be given from administrative tribunals than from the ordinary courts. The High Court stated that the Ombudsman, in reaching its determination, had relied heavily on the limited nature of the disclosure which was sought by the insurers. The duty of disclosure is a matter which falls within the jurisdiction of the Ombudsman and therefore the courts would allow the Ombudsman a greater degree of leeway in deciding how cases are to be conducted.

O'Hara v ACC Bank plc4 - 7 October 2011


  • The plaintiff in this case made a number of investments in ACC Bank products in 2003 and 2004 which suffered substantial losses due to unfavourable market performance. The plaintiff sought to recover damages from the defendant bank on the grounds that, it was claimed, the nature of the products invested in differed from what was agreed between the parties at the time of the investments. The plaintiff's complaint was considered and dismissed by the Ombudsman on 30 November 2009 and an appeal was brought before Charleton J. in the High Court.


  • It was held that the plaintiff's appeal could not succeed owing to the rule of "issue estoppel" which Charleton J. found to be applicable in this case. Issue estoppel prevents a party from re-litigating a matter before a higher court on the grounds that the matter has already been determined. The High Court held that there was a trend in the UK of recognising that issue estoppel was applicable in relation to decision of quasijudicial tribunals and that this broad approach was also appropriate in Ireland. Issue estoppel would embrace not only matters which have already been litigated, but would also concern matters which should have been litigated before a different court or tribunal.
  • Further, in relation to the substance of the decision reached by the Ombudsman, it was held that the High Court would only overturn decisions of the Ombudsman in circumstances where the decision reached was "vitiated by a serious and significant error or a series of errors" (this was a reiteration of the position of the High Court in Ulster Bank v Financial Services Ombudsman and Others).

Hyde v Financial Services Ombudsman5 - 16 November 2011


  • The plaintiff was an architect who, in March 2007, reached an agreement with her Bank for a loan facility to be provided to her. The plaintiff claims that the agreed amount was for €965,000, representing a €715,000 portion for the purchase of a property and a further €250,000 to complete renovation works upon it. The €715,000 portion was drawn down in April 2007 and is documented. However, the further sum was not provided. There was a delay in the initial repayments being made in respect of the €715,000 mortgage.
  • The plaintiff argued that there was an informal understanding with the Bank that she would be afforded some "breathing space" before repayments would commence in order to discharge her legal fees and stamp duty. The Bank refused to provide the further facility of €250,000 on the same favourable terms which had been agreed in respect of the €715,000 facility. The Ombudsman ruled in favour of the Bank based on an assessment of the documentary evidence provided to him. Held
  • It was held that, although the Ombudsman enjoys a broad discretion to decide whether or not an oral hearing should take place, the failure to direct an oral hearing take place in this case constituted a "serious and significant error". The High Court held that on the facts, the plaintiff's case rested on the veracity of competing accounts of an alleged oral conversation between the parties. In such circumstances it would have been impossible to achieve a fair and proper conclusion based on documentary evidence alone.

Lyons v Financial Services Ombudsman6 – 14 December 2011


  • This dispute related to the interest to be paid by the two plaintiff businessmen on loans of about €17 million, made between 1999 and 2008 for the purposes of acquiring property. The plaintiffs claimed a verbal agreement existed with their lender to pay interestonly on the loans at rates ranging from 1.25 per cent to 1.8 per cent. The existence of this verbal agreement was strongly contested by the lender. The plaintiffs complained to the Ombudsman and on 12 January 2011, the Ombudsman determined that the complaint was not substantiated. The plaintiffs then appealed to the High Court, largely on the grounds that the Ombudsman failed to hold an oral hearing in respect of their complaint.


  • The judgment of Hogan J. in this case contained, amongst other things, an interesting consideration of how the Ombudsman's jurisdiction reaches far beyond those customers that might traditionally be considered non-business 'consumers'. Hogan J. went on to hold that the Ombudman's decision was vitiated by a serious error, negating the plaintiff's constitutional right to fair procedures. Hogan J. further stated that the case was not properly evaluated in the absence of an oral hearing and remitted the plaintiff's complaint to the Ombudsman for re-hearing.


These cases demonstrate that a litigant seeking to challenge a decision of the Ombudsman in the High Court faces a difficult assignment. The "serious and significant error" test is now firmly embedded in the case law of the High Court and has been applied in a range of circumstances. Where questions of procedure have arisen on appeal, the High Court has held, for example, that the decision to direct that an oral hearing should take place is a discretion of the Ombudsman (although on the facts the High Court held in both Hyde v FSO and Lyons v FSO that an oral hearing was a necessary requirement).

In relation to evidentiary matters, in Caffrey v FSO the High Court accepted that it was not improper for the Ombudsman to decide a case on the basis of affidavit evidence of an officer who was not party to a telephone conversation on which the case turned.

Deference is also shown to the Ombudsman in terms of the subject matter which may be presented before it. In O'Hara v ACC Bank, the High Court confirmed that issue estoppel (discussed above) applies to quasi-judicial tribunals as it does to the ordinary courts. This principle would operate not only to prevent litigants from seeking to have the matters re-heard before the High Court but also to prevent cases being brought before the ordinary courts in the first instance where those matters fall within the remit of the Ombudsman's jurisdiction.

On the evidence of the recent case law, those intending to bring a matter before the Ombudsman should be aware that any right of appeal which they may enjoy will be limited by the recent case law. Potential applicants should make every effort to ensure that procedural steps are taken to protect their position at Ombudsman stage as, for example, the failure to request an oral hearing at the Ombudsman stage may prejudice a litigant in the event that the case is the subject of an appeal.


1 Ulster Bank -v- Financial Services Ombudsman and Others [2006] IEHC 323

2 Caffrey –v- Financial Services Ombudsman [2011] IEHC 285

3 FBD Insurance PLC –v- Financial Services Ombudsman [2011] IEHC 315

4 O'Hara & Anor –v- ACC Bank Plc [2011] IEHC 367

5 Hyde –v- Financial Services Ombudsman [2011] IEHC 422

6 Lyons -v- Financial Services Ombudsman [2011] IEHC 454

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.