The Jersey Royal Court has dismissed the attempt by a Jersey-based mortgage broker to overturn a binding decision of the Channel Islands Financial Ombudsman (CIFO).

In the only Judicial Review of CIFO since it began operations in November of 2015, the Jersey Royal Court found that the Ombudsman’s decision was sound in terms of both substance and process.

The Court rejected all five of the grounds raised by the mortgage broker and dismissed the case.

CIFO is an independent body set up by law in Jersey and Guernsey to resolve customer complaints about financial services. A decision made by the Ombudsman is legally binding on the financial services provider if the complainant accepts the decision.

Ombudsman decision

1. The Ombudsman had decided that the mortgage loan the broker had arranged for the complainants from a private lender was unsuitable; it was much more costly than what should have been available from a conventional mortgage lender.
2. The Ombudsman therefore directed the mortgage broker to compensate the complainants for losses totalling over £60,000.

What happened next

3. The mortgage broker failed to pay the compensation and
4. later brought a legal action to challenge the Ombudsman’s decision and failed (see introduction)

What happens now

5. CIFO will be immediately taking steps to compel the mortgage broker to pay the compensation to the complainants that the Ombudsman awarded following a thorough investigation.
6. CIFO will also seek to recover its costs in this case.

David Thomas, Chair of CIFO’s Board of Directors said:

“The Court found the Ombudsman’s decision to have been sound and in accordance with his statutory powers.

This confirms the role of CIFO in providing a more accessible alternative to Court proceedings.

CIFO resolves complaints effectively, with minimum formality, without any need for legal representation and in a manner that is fair and reasonable.

“The Court decided to continue the confidentiality given to complainants by the Ombudsman’s own process.

This recognises the adverse impact there would be if complainants’ private financial affairs were disclosed, especially in a small community.  Protecting complainants’ identities is important to encourage consumers to use this free service.

“CIFO operates independently of government, regulators, industry and consumers. The outcome of this case demonstrates that CIFO is legally accountable and the Ombudsman has been found to be making decisions as intended by the governing legislation.”

Click here to see the Act of Royal Court =

https://www.ci-fo.org/wp-content/uploads/2019/03/190320-Act-of-Royal-Court-18.03.19.pdf

and

click here to read the full judgment.

https://www.jerseylaw.je/judgments/unreported/Pages/%5b2019%5dJRC041.aspx