Ireland: FSO Appeals: The Approach Of The Courts

Decisions of the Financial Services Ombudsman ("FSO") are often challenged in the courts. An appeal from a decision of the FSO is, in the first instance, brought to the High Court. The High Court decision can be further appealed to the Court of Appeal, but only on a point of law. Furthermore, leave to bring this further appeal must first be obtained from either the High Court or the Court of Appeal.

The criteria to be applied to applications for leave to appeal in such cases were considered by the Supreme Court in Governey v Financial Services Ombudsman & anor [2015] IESC 38.

The application for leave to appeal in Governey was brought before the Supreme Court as it was made prior to the establishment of the Court of Appeal. The principles set down by the Supreme Court in Governey apply equally, however, to applications for leave now brought before the Court of Appeal.

BACKGROUND TO CASE

The applicant made a complaint to the FSO relating to a financial product which he had purchased. The FSO rejected this complaint and the matter came before the High Court on appeal. The High Court heard and rejected the appeal.

The applicant wished to appeal the decision of the High Court and sought leave to do so from the High Court, but was refused. He then applied to the Supreme Court which, at the time and prior to the establishment of the Court of Appeal, dealt with these applications.

ISSUES BEFORE THE SUPREME COURT

The Supreme Court had to consider:

1. the criteria for granting leave; and
2. the approach the Supreme Court should take when deciding whether or not to grant leave.

WHAT ARE THE CRITERIA FOR GRANTING LEAVE TO APPEAL?

The Supreme Court noted that there is a constitutional right to bring an appeal from the High Court to the Supreme Court. This right may be excluded or restricted by statute. However, any such exclusion or restriction must be clearly set out in legislation. The Court reasoned that where the criteria for granting leave are not clear, the relevant legislation should be interpreted in such a way as to confer the wider constitutional entitlement to appeal.

The Court noted that the Central Bank Act, which provides for appeals from decisions of the FSO, is silent in relation to leave criteria. It, therefore, concluded that:

The question the Court must ask itself therefore is whether the party seeking leave to appeal has shown that the proposed appeal is stateable, i.e. that it is not without merit and that it has some basis in law.

HOW SHOULD THE APPELLATE COURT APPROACH APPLICATIONS FOR LEAVE?

How should the appellate court approach applications for leave, particularly where the High Court has already refused leave? Should its approach vary to that adopted by the High Court?

The Supreme Court stated that where the High Court has refused leave and has given reasons for its refusal, the Supreme Court should consider the trial judge's reasoning as part of its overall consideration as to whether a stateable basis for appeal has been made out. It noted, however, that the Central Bank Act does not require the appellate court to offer any particular level of deference to the decision of the High Court. The Court concluded that it must reach its own conclusion as to whether there is a stateable basis for suggesting that an appeal on a point of law might succeed and should not depart from its own independent task of deciding whether, in its view, a stateable basis for an appeal has been established.

SHOULD THE COURTS DEFER TO DECISIONS OF THE FSO?

The Supreme Court also made some observations on the scope to review decisions of the FSO. Generally, the courts are slow to interfere with decisions of the FSO and, in recognition of the FSO's expertise and specialist knowledge, adopt a deferential approach when determining appeals from FSO decisions. To succeed on an appeal, the appellant must, therefore, show that the decision of the FSO was vitiated by a serious and significant error or a series of such errors.

This deferential approach applies to findings of the FSO on questions of fact or to, for example, findings on the reasonableness of the conduct of the financial institution in question. However, in Governey, the Supreme Court said that the courts are not bound to afford similar deference to the views of the FSO on the law or the application of law to the facts of a particular case. This view were echoed in a subsequent case, Financial Services Ombudsman v Millar, where the Court of Appeal stated that the courts should not take a deferential stance to decisions of the FSO on pure questions of law.

KEY TAKEAWAYS

Appeals from decisions of the High Court on appeal from decisions of the FSO are now brought to the Court of Appeal (as opposed to the Supreme Court). The same principles that applied to the Supreme Court now apply to the Court of Appeal:

• A decision of the FSO can be appealed to the High Court and further appealed, on a point of law only, to the Court of Appeal.
• Before bringing an appeal to the Court of Appeal, the party seeking to appeal must get leave to appeal.
• An application for leave to appeal can be brought before the High Court and/or the Court of Appeal.
• The party seeking leave must show that the appeal is stateable, i.e. that it is not without merit and that it has some basis in law.
• A refusal by the High Court to grant leave does not preclude a separate application for leave being brought to the Court of Appeal.
• In such circumstances, the Court of Appeal is not bound by, nor does it owe any particular deference to, the decision of the High Court to refuse leave to appeal. The Court of Appeal must reach its own views as to whether there is a stateable basis for the appeal.
• The deferential approach adopted by the courts when hearing appeals from decisions of the FSO does not apply to decisions of the FSO on pure questions of law.

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.