Neutral Citation: [2014] IEHC 268
THE HIGH COURT [2013 No. 504 JR]
BETWEEN
DAVID O’BRIEN
APPLICANT AND
FINANCIAL SERVICES OMBUDSMAN RESPONDENT
JUDGMENT of Mr. Justice Hogan delivered on the 7th May, 2014
1. It cannot be any great surprise that the financial calamities which have beset this State since the middle of 2008 have brought in their wake an increased level of complaints regarding financial institutions. These developments have in turn put pressure on the hard pressed office of the Financial Services Ombudsman, whose officials carry an increasingly heavy burden in dealing with such a volume of complaints.
2. The issue in the present case concerns the delays in the office of the FSO. The issue arises in the following way. The applicant, Mr. O’Brien, is a civil servant who entered into a hire purchase agreement in May 2008 and took possession of a motor vehicle as a result. By 2010 the applicant had encountered financial difficulties and sought to terminate the agreement in accordance with s. 63 of the Consumer Credit Act 1995. He was thwarted in this endeavour by the relevant credit institution because he was informed that, given that there were arrears outstanding on the account, he could not then terminate the agreement. He was ultimately permitted to terminate, but not before he was required to make ten additional monthly payments amounting to €4,690.
3. The applicant accordingly submitted a complaint to the FSO arising from the actions of the credit institution in question in refusing to allow a termination of the account. In April 2012 the FSO rejected the complaint, in part because the view was taken that the decision of Hanna J. in Gabriel v. Financial Services Ombudsman [2011] IEHC 318 did not have retroactive effect.
4. That adverse decision was then appealed to this Court. Following a number of adjournments (to which the applicant had objected). However, on 14th September 2012 the solicitors for the respondents indicated that it was not intended to oppose the appeal. An order was accordingly made by the High Court on 8th October 2012 setting aside the earlier decision and the matter was remitted to the FSO for further review. In the course of those proceedings the applicant was represented by the Free Legal Advice Centre (“FLAC”).
5. On 13th November, 2012, the applicant’s solicitor complained about the delay and sought a timetable for the resolution of the complaint. Further correspondence ensued, some of it directed to the question of whether the original decision-maker should determine the remitted matter. The original decision-maker wrote to the applicant’s solicitor on 28th March 2013 to indicate that he would have no further involvement in the matter. He also pointed out that it was anticipated that “re-consideration of the remitted matter will commence shortly” and that the FSO would shortly be in contact in that regard.
6. The matter appears to have been assigned to a different case-officer in early June 2013, because she then wrote to the applicant (and the other parties) indicating that the reconsideration of the complaint had commenced. Further correspondence ensued in relation to the question of whether FLAC still represented the applicant (given that he had personally contacted the FSO on a number of occasions) and whether the parties wished to make further submission.
7. The FSO ultimately wrote to FLAC on 2nd October, 2013, indicating that the only issue delaying the further consideration of the complaint was whether the applicant still wished to make a response, the financial services company in question having confirmed by letter dated 20th August, 2013, that it had nothing further to add. FLAC responded by letter dated 11th November, 2013, expressing surprise at the suggestion that it was somehow impeding the final resolution of this matter. The letter-writer added that it was clear from the file that “our client relies squarely on the decision of the High Court in the Gabriel case. Accordingly, there is no necessity for this reliance to be repeated in further submissions”.
8. In the meantime these proceedings had been commenced on 8th July, 2013. The complaint in essence was that by failing to making a decision the FSO had erred in law and, specifically, had delayed unduly in making that fresh adjudication. The applicant then sought an order of mandamus compelling the FSO to make a fresh decision on the remitted complaint. These judicial review proceedings were heard in March 2014 and a decision had yet to be made, although I was informed that such a decision was imminent.
The criticism of the Financial Services Ombudsman’s Office
9. Before examining the merits of this judicial review application it is, however, first necessary to address a separate matter to which the Financial Services Ombudsman drew attention in the course of the hearing. The hearing commenced on 5th March, 2014, but it was adjourned to 14th March, 2014, to be completed. On the 7th March, 2014, the applicant’s solicitors, FLAC, separately published a report entitled “Redressing the Imbalance: A Study of Legal Protection Available for Consumers and Credit and other Financial Services in Ireland.” The report offered a critique of what the authors maintained was the imbalance within the consumer protection code in favour of credit institutions and at the expense of consumers.
10. Particular objection is taken on the part of the Ombudsman to the following passage in which the original decision in the applicant’s case is discussed:
“To compound the error of law made in the Gabriel case, the subsequent (initial) decision of the Financial Services Ombudsman in the case of O’Brien v. PTSB Finance takes what FLAC would regard as a pro-industry attitude considerably further...what kind of legal reasoning is at play here?”
11. The Ombudsman objects to the fact that FLAC would publish such a report dealing with an earlier stage of these proceedings while the present case is at hearing. While one could understand that a conscientious public officer such as Ombudsman would be anxious to uphold the independence of his office against perceived slights of this kind, it seems to me that as a matter of law his objection is not well founded.
12. The report published by FLAC is a sober and well informed critique of recent legislative and judicial developments in an area in which there are doubtless a wide variety of views. One may reasonably infer that the publication date of the report and the hearing date for the judicial review just happened to coincide. The publication by FLAC was, in any event, but a classic example of where an endeavour was made to educate public opinion in the sense acknowledged and protected by Article 40.6.1.i of the Constitution. As I observed in Hyland v. Dundalk Racing (1999) Ltd. [2014] IEHC 60:
“Given that the free exchange of ideas, arguments and views is central to the operation of the democratic State envisaged by Article 5 and is at the heart of the protections of free speech and peaceable assembly contained in Article 40.6.1, the public expression and manifestation of different and dissenting views must - in general, at least - be tolerantly accepted by all.”
13. It is true that the criticism of the Ombudsman as “pro industry” may be regarded by him and all who work in the FSO (and indeed others) as unfair and unwarranted. But the expression of such views - whether warranted or otherwise - is, as I pointed out in Hyland, central to the guarantee of a functioning democracy in Article 5 and is at the heart of the constitutional protection in Article 40.6.1. The core of these constitutional guarantees would be wholly undermined if such views could not be freely voiced. This especially so in the context of criticisms of those - such as politicians, judges and statutory office holders - who are privileged to exercise high office in the name of the People of Ireland.
14. It is, accordingly, sufficient to say that the expression of these views is fully protected by Article 40.6.1 of the Constitution and that no objection can be taken to the expression of such views.
Whether there has been undue delay on the part of the FSO
15. The leading authority on the question of undue delay and decision making by administrative bodies remains that of O’Donoghue v. Legal Aid Board [2004] IEHC 413, [2006] 4 IR 204. In that case the plaintiff experienced a delay of 24 months between contacting the Legal Aid Board) for legal aid and ultimately obtaining an appointment with a solicitor. A further month elapsed before she was given a legal aid certificate in respect of urgent family law proceedings. As Kelly J. noted in his judgment, it was quite clear that the plaintiff in that case was, at all material times, entitled to legal aid but she nonetheless had to wait for a period in excess of two years before she obtained her legal aid certificate.
16. Extensive evidence was given in that case regarding the under-funding of the Board and how this compromised its ability to discharge its statutory mandate. Kelly J. stated that he was quite satisfied from the evidence that ([2006] 4 IR 204, 226):
“...the cause of the delay encountered by the plaintiff was the absence of resources in the law centre to meet demands. Had the Board been provided with the staff which it sought, the plaintiff would have been given an appointment to see a solicitor within a period of about four to five months at most.”
17. Kelly J. rejected the argument that the plaintiff could recover damages against the Board either by virtue of a claim for damages under the Civil Legal Aid Act 1995 or in negligence ([2006] 4 IR 204, 228):
“If the plaintiff here made a claim solely by reference to an alleged breach of statutory duty on the part of the Board.... she would in my view have to [fail]. The Board in this case did all it could to provide for her and indeed other persons within its resources. The sole cause of the delay encountered by the plaintiff was the lack of resources of the Board. It is hard to think that it could have done anymore than it did to acquaint the relevant parties with its precarious position. The failure to address that position was not the fault of the Board........Her claim in negligence against the Board must likewise fail. I am unable to identify any act of negligence on the part of the Board or it's officers. They were simply being swamped with work and their cries for assistance went unheeded. The working conditions that they had to experience and the demands being made upon them are evidenced in the lengthy memoranda that were sent regularly by the Board's Chief Executive to the relevant department. The conditions under which the Board's personnel had to operate were woefully substandard and the reason for that was the failure to resource the Board properly.”
18. Kelly J. then went to consider the claim for damages for breach of constitutional rights. He first quoted in this context the well-known passage from the judgment of Kenny J. in Macauley v. Minister for Posts and Telegraphs [1966] I.R. 345, 358 dealing with the right of access to the courts:
“That there is a right to have recourse to the High Court to defend and vindicate a legal right and that it is one of the personal rights of the citizen included in the general guarantee of Article 40, sect. 3, seems to me to be a necessary inference from Article 34.3.1…If the High Court has this full original jurisdiction to determine all matters and questions (and this includes the validity of any law having regard to the provisions of the Constitution) it must follow that the citizens have a right to have recourse to that Court to question the validity of any law having regard to the provisions of the Constitution or for the purpose of asserting or defending a right given by the Constitution for if it did not exist, the guarantees and rights in the Constitution would be worthless."
19. Kelly J. then continued ([2006] 4 IR 204, 232);
“The plaintiff contends that she had no realistic prospect of access to the courts without the assistance of a lawyer. I agree with her. She qualified for such assistance under the relevant statutory provisions and regulations but was denied the necessary help for a period of 25 months.”
20. Kelly J. then reviewed the earlier authorities dealing administrative bodies and legal aid. He noted that in Kirwan v. Minister for Justice [1994] 1 I.L.R.M. 444 in dealing with a complaint about the absence of legal aid for persons seeking review of their detention on foot of guilty but insane verdicts, Lardner J. held that the constitutional requirement of fair procedures applied and obliged the executive to provide legal aid for an appropriate person.
21. Kelly J. then proceeded to observe ([2006] 4 IR 204, 234):
“Applying the approach of Lardner J. it seems to me that the unfortunate circumstances of the plaintiff in the present case are such that access to the courts and fair procedures under the Constitution would require that she be provided with legal aid. That view is reinforced by the fact that she fell squarely within the entitlements to such under the Act and the regulations but was denied it for a period of 25 months because of the manifest failure of the State. The delay in granting the certificate for legal aid, in my view, amounted to a breach of the constitutional entitlements of the plaintiff and if she can demonstrate loss as a result she is entitled to recover damages in respect thereof.”
22. Kelly J. then proceeded to make an award of damages for breach of constitutional rights in favour of the plaintiff. It was not necessary to grant any mandatory injunction or declaratory relief because the plaintiff had by this stage been awarded the requisite certificate.
23. Given that the role and functions of the FSO in some respects at least duplicate those of the courts in adjudicating disputes concerning the conduct of credit institutions (cf. here my comments in this regard in Lyons v. Financial Services Ombudsman [2011] IEHC 454) and having regard to the fact that a decision of the FSO is capable of creating a res judicata (cf. the decision of Charleton J. in O’Hara v. Agricultural Credit Corporation [2011] IEHC 367), it seem to me that the principles articulated by Kelly J. in O’Donoghue are applicable, at least by analogy, to decisions taken by the FSO. Such a decisions must, accordingly, be taken within a reasonable time. Quite independently of domestic constitutional law, it must also be recalled that as the FSO is effectively adjudicating on civil rights and obligations, the obligation under Article 6 ECHR to determine the complaint within a reasonable time accordingly applies: see, e.g., the judgment of Males J. in R. (Calland) v. Financial Ombudsman Service Ltd. [2013] EWHC 1337 (Admin).
24. This conclusion regarding domestic constitutional law is, in any event, further re-inforced by the comments of Edwards J. in KM v. Minister for Justice, Equality and Law Reform [2007] IEHC 234 to the effect that:
“the entitlement to a prompt decision is an aspect of constitutional justice. Moreover, quite aside from constitutional justice it is clear from the authorities that the idea of substantive fairness includes a duty not to delay in the making of a decision to the prejudice of fundamental rights.”
25. In this regard Edwards J. considered that the following were relevant considerations:
“1. The period in question;
2. The complexity of the issues to be considered;
3. The amount of information to be gathered and the extent of enquiries to be made;
4. The reasons advanced for the time taken; and
5. The likely prejudice to the applicant on account of delay.”
26. In Nearing v. Minister for Justice, Equality and Law Reform [2010] 4 I.R. 211, the applicant had sought a certificate of naturalisation but by the time the case had come on, the applicant had been granted residency and accordingly the case was moot save in relation to costs. Cooke J. referred specifically to the fact that what he was dealing with was not the exercise of a statutory power but a non-statutory administrative scheme and the Minister was under a duty to be bound by its self-imposed terms. Cooke J. stated as follows at para. 21:
“In the present case, as outlined in the summary of the correspondence above, there was, on the one hand, no element of urgency in the applicant’s personal situation which would have required the Minister to depart from the normal administrative order for dealing with applications for long term residency so as to accord this application some priority. Even his ‘long-term relationship’ and expectant fatherhood could not be said to constitute such a factor. Moreover, nothing in the department’s response to the application and subsequent inquiries could be said to have provoked any suspicion that the application was being put on the long finger or that the division operated some arbitrary and unreliable system for processing long term residency applications. On the contrary, the replies from the division gave a coherent and transparent account of the way in which it operated and the progress that was made. Applications were processed on a strict and, therefore fair, order of receipt and the applicant was kept informed from time to time as to how close the applications of August 2007 were to being processed.”
27. Cooke J. went on to hold at para. 25:
“Once it is clear that the Department has in place a particular system for the administration of such a scheme, it is not the role of the court in exercise of its judicial function to dictate how a scheme should be managed or to prescribe staffing levels or rates of productivity in the relevant section of the department. Once it is clear from the evidence that there is in place an orderly, rational and fair system for dealing with applications, the Court has no reason to infer any illegality in the conduct of the Minister unless some specific wrong doing or default is demonstrated in a given case.”
28. In Salman v. Minister for Justice and Equality [2011] IEHC 484 Kearns P. held that a three year delay in processing an application for naturalisation was unlawful. In contrast to cases such as Nearing there was no evidence
“…of any purported system which is in place for dealing with applications for certificates of naturalisation. The letters sent by the respondent in the context of the application for the certificate cannot constitute evidence as to the truth of the matters alleged therein, i.e. that the respondent had a fair system in place whereby applications were dealt with in chronological order.
The respondent was in possession of all documentation necessary to make a decision since June 2008, and never indicated to the applicant that there was anything outstanding. The respondent did not at any time indicate what was causing the delay in processing the application and refused to explain why the period of delay extended far past the average time period put forward by the Department. There is no affidavit evidence at the time of bringing this application aside from the respondent’s bare assertion, that the respondent had in place a fair and rational system for the processing of applications.”
29. In the light of this case-law we may now consider whether there has been any undue delay on the part of the FSO and whether the system for processing these applications was rational and fair.
Has there been a breach of the O’Donoghue principles by the FSO?
30. In assessing the question of whether there has been a breach of the O’Donoghue principles, the relevant factual context must naturally be taken into account. As the Ombudsman, Mr. Prasifska, noted at paragraph 13 of his affidavit of 21st October, 2013:
“While our resources are limited, this Office has been managing an ever increasing workload, reaching a record level of 8,135 complaints in 2012. We receive, on average, between 500 and 600 new complaints each month. The unavoidable result of this is that there have been delays in the processing of cases. Complaints are dealt with in date order. They are allocated to investigators in the order in which they are received and the same principle is applied to remitted cases, in that the first remitted case in time is dealt with first and so forth.
31. Mr. Prasifska goes on to say (at paragraph 15) that:
“While there was a delay in dealing with the remitted matter, it was entirely attributable to the capacity constraints of this Office in managing an ever increasing workload.”
32. I might add that in the course of the hearing I was informed that the Office had just four case-officers. Viewed in that context and given the complexity of many complaints, the output of the FSO - both in terms of both quality of decision-making and the quantity of adjudications - is truly admirable, almost heroic. The only wonder is that the delays in the FSO to date have not been of even greater proportions.
33. Unlike, for example, the situation disclosed in Salman with regard to the delays in processing naturalisation applications, the evidence here suggests that the applicant was generally kept informed of progress. The remitted applications are dealt with in a strict date order and the resource constraints to which the FSO is subject are all too obvious.
34. Measured against those factual parameters, I cannot say that the delays to date, while regrettable, are objectively excessive, although I accept that, having regard to the fifth criterion enunciated by Edwards J. in KM, these delays are to some degree prejudicial so far as the applicant is concerned. In this regard, time must be regarded as having re-commenced when the matter was remitted to the FSO in October 2012 by order of the High Court.
35. Of course, it might be thought that, in the majority of cases at least, the remitted cases should be dealt with more speedily than the initial complaints given that the broad parameters of the facts and the law will, generally speaking, have already been established. I agree that it was unfortunate that it took until June 2013 before the case was re-assigned and I further agree that the fresh adjudication on this case would seem straightforward. Yet such delays as there have been are not - as yet, at least - of such a magnitude as to call for prescriptive judicial intervention. While naturally reluctant to set down some ex ante time limit, a delay of two years between complaint (or the fresh remittal of the complaint, as the case may be) and adjudication would probably lie at the outer limits of what the courts could judicially tolerate.
36. As we have seen, this limit has not yet been reached in the present case. Even in those cases where it was so breached it would seem that, as on the facts of O’Donoghue, it is likely that in all probability these delays would be caused not by any wilful failure on the part of the FSO, but simply by reason of a lack of adequate staff and resources.
Conclusions
37. While the delays in the present case are undoubtedly unfortunate, I cannot say that the delays are so manifestly excessive as to be inexcusable. In this regard particular regard must be had to the resource constraints under which the FSO is currently operation.
38. In these circumstances I find myself obliged to dismiss this application for judicial review.
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