# Why is the F.S.O. appealing the Millar case ?



## Fin Crusader (21 Jan 2015)

I was wondering why the FSO has appealed the Millar ruling in the High court to the new Appeals court ?


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## Brendan Burgess (22 Jan 2015)

Presumably because their legal opinion is that the judgement was wrong. 

Brendan


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## Gerry Canning (22 Jan 2015)

Brendan Burgess said:


> Presumably because their legal opinion is that the judgement was wrong.
> 
> Brendan


Fin Crusader.
Brendan has put in a thread on High Court finding against FSO in todays Times.
From your threads I gather that you are not an FSO fan.
You appear to have a very strong consumer focus.
Ring me sometime please for a chat. 0872437139.
We may have knowledge we can put on AAM.


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## Fin Crusader (22 Jan 2015)

The FSO is meant to be a self financing body, however we, the taxpayer, have forked out millions of euro this year,  keeping the financial regulatory system afloat. As far as I can see they provide lip service for the consumer so that the consumer does not take to the streets. Seeing that Danske bank have already appealed the decision, why waste more money on legal fees wading in behind them. Senior and junior counsel do not work for free, oh I forgot, we will end up paying for this with our universal social charge, the hypocrisy of it all. The F.S.O - the consumer champion !


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## Brendan Burgess (22 Jan 2015)

The FSO has very little choice in the matter. 

The ruling leaves the FSO in a very difficult position.  The mortgages were variable rate mortgages not trackers.  It would be fairly impossible for the FSO to rule on other cases. He is absolutely right to get the Appeals Court guidance. If the Appeals Court backs up the High Court, then the FSO will be in a much clearer position on other cases. 

Brendan


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## Fin Crusader (22 Jan 2015)

Why not let Danske Bank legal eagles take on the appeal and the EXPENSE, and spare the TAXPAYER further expense and a probable further bail out of the FSO. The decision is been appealed anyway !

By the way Brendan, have you any idea of how many decisions have been appealed by the FSO to the Supreme Court ( as the new Appeals court is only newly formed ) when a High Court judgment found against the FSO and a major bank, in favour of the little guy, the consumer ? I think the answer is zero


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## Gerry Canning (22 Jan 2015)

Brendan Burgess said:


> The FSO has very little choice in the matter.
> 
> The ruling leaves the FSO in a very difficult position.  The mortgages were variable rate mortgages not trackers.  It would be fairly impossible for the FSO to rule on other cases. He is absolutely right to get the Appeals Court guidance. If the Appeals Court backs up the High Court, then the FSO will be in a much clearer position on other cases.
> 
> Brendan


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## Gerry Canning (22 Jan 2015)

Just a comment.
In essence the appeals system means more delays and more lack of justice within an acceptable time frame.

I am not taken with FSO going to get more legal rulings (not just in this case which I do not know).
I think if the Consumer Protection codes was used as  FSO,s benchmark ,particularly on the need for any provider to act {in the best interests of the consumer} by now, both Fso and providers would have stopped these legal delays.
Otherwise the Consumer Code is of minimal value, and to use Fins view, bluffs consumer so as consumer will not {take to the streets}.

There is no way, an average consumer can risk Court costs.


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## PadKiss (22 Jan 2015)

Hi all
I am not one to defend the position of the FSOB in this matter but I believe matters are a bit confused here. There are 2 appeals taking place here one from the FSOB and one from Danske. I actually brought this up in a recent meeting in the Office of the FSOB when I stated that the public perception is not helped with the papers linking both Danske and the FSOB together in any appeal. THIS IS NOT THE CASE. Both have their reasons for appealing but they are as such separate. Just thought it might be worthwhile clarifying things
Padraic


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## Fin Crusader (22 Jan 2015)

Just a coincidence that both organisations lodged their " separate appeals " within 24 hours of each other. Pad kiss, do you know why the FSO is appealing the case ?


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## PadKiss (22 Jan 2015)

Just my opinion but I believe the Judge over stepped when in his summary directed the FSOB what the decision should be, I could be wrong but that was my take


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## Fin Crusader (22 Jan 2015)

Sorry, must disagree with you, Judge Gerard Hogan, basically  told the FSO that they were wrong in their legal assessment that a term in the variable rate mortgage clause, that being " in response to market conditions " was clear, when indeed it is far from clear. He also alluded to the FSO being able to have regard to the wider matrix of fact with regard to possible collateral contracts formed by Danske bank through the wording in their mortgage marketing brochures and website pages. Judge Gerard Hogan rarely, if ever, oversteps the law, that is why when you train to be a solicitor or barrister you study his published works.


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## barneyg (22 Jan 2015)

If he got it right then won't his decision be upheld by the court of appeal?


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## PadKiss (22 Jan 2015)

Hi In appealing a case the appeal is that there was an error made in coming to the decision not the decision itself and in my reading of the case this is what is being appealed I am not a legal person so I may be wrong but it is my understanding in any appeal of an FSOB decision must be in showing there was an error made in coming to the decision. I read that the case was sent back to return with a decision not unlike the judges finding or something to that effect which would result in the appeal. I may of course be wrong but we will know soon enough and the result has a major bearing on a lot of accounts relating to this area of what is the 'Standard Variable Rate' and the current overcharging that is going on in all lenders


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## Fin Crusader (23 Jan 2015)

To Barneyg,

Yes, I believe the decision will probably be upheld, but why is the FSO wasting taxpayers funds in appealing this decision. It will cost the taxpayer many 100,000 of euro. Judge Gerard Hogan has actually been recently promoted to the Appeals court. There are 11 Judges in total in this court, of course he will be disbarred from hearing his own appeal.

In relation to Padkiss views, the decision of the High court only has a bearing on Danske banks , variable home loan rate. The Judge did not rule on SVR's in general terms.


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## Brendan Burgess (23 Jan 2015)

I don't know anything about Danke's appeal. 

The decision was made by the Financial Services Ombudsman.
The borrower appealed that decision to the High Court. 
The ruling of the High Court was to the Ombudsman
So it's up to the Ombudsman whether to appeal or not. It's not up to Dankse, although they might be a notice party. 

The fact that they lodged their appeals within 24 hours has no significance. They probably did it very close to the deadline for appeals. 



PadKiss said:


> I read that the case was sent back to return with a decision not unlike the judges finding or something to that effect which would result in the appeal.



The Ombudsman ruled that the expression "in line with market rates" was unambiguous. The Judge ruled that, as a matter of fact, it was ambiguous.  The judge ruled that the Ombudsman must take fairness into account and not just the law. He ruled that the Ombudsman review the case in the light of this judgement. 

If the Ombudsman accepts the ruling, he sort of has to rue that all mortgage rates must track the ECB rate.  But we all know that all mortgages are not trackers.  So the Ombudsman would be put into an impossible position.  If the Supreme Court expresses the view that all mortgage rates must follow the ECB rate, then so be it. But I don't think that the Ombudsman could make that decision on his own.


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## barneyg (23 Jan 2015)

Fin Crusader said:


> To Barneyg,
> 
> Yes, I believe the decision will probably be upheld, but why is the FSO wasting taxpayers funds in appealing this decision. It will cost the taxpayer many 100,000 of euro. Judge Gerard Hogan has actually been recently promoted to the Appeals court. There are 11 Judges in total in this court, of course he will be disbarred from hearing his own appeal.
> 
> In relation to Padkiss views, the decision of the High court only has a bearing on Danske banks , variable home loan rate. The Judge did not rule on SVR's in general terms.



Brendan has outlined the commercial implications of Millar, which are potentially huge. There are also serious procedural and jurisdictional implications for the FSO's office, so I think it makes sense that they appealed the judgment. For clarity if nothing else. My own gut feeling is that the appeal will succeed.

Also, my understanding is that the FSO is funded by a levy on financial providers, rather than receiving money from the taxpayer.


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## Fin Crusader (23 Jan 2015)

No Brendan, your missing the whole point of the case. The Millars appealed the FSO decision due to the term in the variable rate clause stating that interest rates may be changed at any time " in response to market conditions." The Millars argued that in November 2011 Danske bank arbitrarily raised their various variable home loan rates by 0.95%, this, at a time when wholesale interest rates where decreasing rapidly. They stated that Danske bank's increase in interest rates on their mortgages was not in line with market conditions. Would you sign a svr mortgage agreement if the lender could increase mortgage rates at any time by reference to specialist factors to which the bank only had knowledge of and to which you where not party to and where not obliged to seek a reason for the increase? I think not. If this where the case, as Danske bank seek to contend, would this term not be an unfair term as set out in S.I. 27/1995. Judge Hogan believed that the term " in response to market condition " was not clear, and as such was ambigious.

The Millars also alluded to mortgage brochures and indeed Danske bank's own website, which stated that variable rate mortgages move in line with general interest rates, it certainly could be argued that Danske bank created a collateral contract with the Millars in this regard. Judge Hogan referred to these matters and stated the it was within the remit of the FSO to take these matters into consideration when coming to a decision on the matter.

IMPORTANT! In the initial arbitration between the Millars and Danske bank, Danske bank informed the FSO that any increases or decreases in the ECB interest rates were irrelevant to them in funding terms, as they did not receive any direct funding from the ECB. The FSO appears to have accepted this statement at face value. However, what Danske bank failed to state to the FSO was the fact that the Danish National Bank pegs the Danish Krone to the Euro, so that any increase/decrease in the ECB rate will result in a likewise increase/decrease in the Danish National bank rate. Since  Danske bank varies it's variable rate products in line with increases and decreases in the Danish National bank rate, the variation in the ECB rate is indeed very relevant to Danske bank. If the FSO had investigated the matter a little more thoroughly maybe they may have come to a different conclusion in the first instance. The Court of Appeal would do well to look into this matter, before issuing judgment in the case.


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## Brendan Burgess (23 Jan 2015)

Here is the actual wording of the Judge's conclusion 

"
*WhethertheOmbudsman's  decision shouldbeallowed tostand*


*28.  *In summary, therefore,the Ombudsman erred in concluding that the words("...in response to market conditions.... ")in question were clear when they were not.

He further erred in not having regarding to the wider matrix of fact which, assessed objectively, might inform the meaning of these words as they appear in the relevant contractual documents.

Nor did he give consideration to whether the Millars could  successfully establish a collateral contract regarding the meaning of these words having regard to the promotional and other material supplied by Danske at the relevant time."


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## Fin Crusader (23 Jan 2015)

Barneyg,

The taxpayer had to bail out financial regulatory bodies to the sum of 58 million last year, guess the financial institutions are not paying the levy! See Irish Times article 30/12/2014.

Not many appeals succeed against a  Judge Hogan ruling.


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## Fin Crusader (23 Jan 2015)

To Brendan,

 exactly, if a term in a contract is deemed not to be clear, the contra proferentum rule applies,( literally means against the drafter ) so in this instance, whatever was best advantage to the consumer would prevail, ie the Millars would win their argument to the best advantage to them.


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## 10amwalker (23 Jan 2015)

Thank you to all the posters on this topic. I learnt a great deal. Thank you askaboutmoney


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## barneyg (23 Jan 2015)

Fin Crusader said:


> Barneyg,
> 
> The taxpayer had to bail out financial regulatory bodies to the sum of 58 million last year, guess the financial institutions are not paying the levy! See Irish Times article 30/12/2014.
> 
> Not many appeals succeed against a  Judge Hogan ruling.



Most of the institutions that pay the levy were not bailed out, and the bailout happened years ago at this stage. Your comment about taxpayers' money was a red herring; the FSO has as much right to appeal as anyone else, and indeed as the Millars had to appeal its original decision


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## Fin Crusader (23 Jan 2015)

Barneyg, the taxpayer paid 58 million euro to plug the financial shortfall in Irish financial regulation in 2014, period. Look it up and come back to me with some facts disputing same. So that means the financial institutions are not paying the levies as required, fact.
You do not seem to comprehend what I am saying, the Millars took a lay litigant claim. ( a claim where they do not employ legal professionals ) The appeal by the FSO to the new Appeals Court will cost the taxpayer a lot of money, as the FSO will employ senior and junior counsels to present their case. They charge 1000's of euro per day. On the other side of the appeal there will be Donna and Robert Millar, ordinary people, and at the end of it all who will end up paying the massive legal bill, take a guess?


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## Gerry Canning (23 Jan 2015)

Fin Crusader said:


> Barneyg,
> 
> The taxpayer had to bail out financial regulatory bodies to the sum of 58 million last year, guess the financial institutions are not paying the levy! See Irish Times article 30/12/2014.
> 
> Not many appeals succeed against a  Judge Hogan ruling.


..............
Seems to hang on {response to market conditions}.
If so Millars stay as winners, am with Fin on this and bow to posters greater knowledge.
I do not think Danske are worried about Millars but how many more are waiting.
If Danske lose = Supreme Court or must it stop at new Appeals Court?

Barneyg.
Yes FSO is funded by Banks ! not a sensible funding method.
With the best will in the world people do not bite the feeding hand!


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## Brendan Burgess (23 Jan 2015)

barneyg said:


> Also, my understanding is that the FSO is funded by a levy on financial providers, rather than receiving money from the taxpayer.





Fin Crusader said:


> The taxpayer had to bail out financial regulatory bodies to the sum of 58 million last year, guess the financial institutions are not paying the levy! See Irish Times article 30/12/2014.



See attached accounts from the FSO report for 201. He spent €5.4m and recovered it in full from the financial institutions, as far as I can make out.

Fin Crusader, as far as I can see, your figure of €58m relates to the Central Bank and not the Financial Services Ombudsman, which is a separate body.

http://www.irishtimes.com/business/...to-plug-58m-hole-in-regulatory-bill-1.2051145

Brendan


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## Fin Crusader (23 Jan 2015)

Gerry, you have hit the nail on the head, Danske bank will invest serious money in this case. Failure is not an option for them, there will be the usual semantics, smoke and mirrors etc, but in the end the fact is, the term, " in response to market condition" is not a term of art, it is in fact an ambiguous term.


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## Fin Crusader (23 Jan 2015)

Brendan, I believe the figure encompasses all financial regulatory bodies within the state, plus, the other, in the FSO income figures, although a relatively small figure, is probably from the governments central fund ie the taxpayer. If you look up the FSO funding requirments for 2014, you will see a shortfall of 352,308 euro. I wonder who plugged this shortfall ?

Brendan, every credit institution must pay the FSO €0.1763 per customer as a levy. ( si 137/2014 refers )The bank's simply adds this cost into every customers account.


To Gerry,

If Danske bank lose in the appeals court, then I believe the next stop is Europe, but only if the bank can find a possible breach in European legislation, which they I believe they cannot. The corollary of this argument is that if the Millars lose this case in the Appeals court they can go to the European court, as they can make a case that the term in the variable rate clause of their mortgage agreement is unfair, and thus is a breach of the unfair terms in contract legislation, which of course is European legislation.


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## barneyg (23 Jan 2015)

Fin Crusader said:


> Barneyg, the taxpayer paid 58 million euro to plug the financial shortfall in Irish financial regulation in 2014, period. Look it up and come back to me with some facts disputing same. So that means the financial institutions are not paying the levies as required, fact.
> You do not seem to comprehend what I am saying, the Millars took a lay litigant claim. ( a claim where they do not employ legal professionals ) The appeal by the FSO to the new Appeals Court will cause the taxpayers money, as the FSO will employ senior and junior counsels to present their case. They charge 1000's euro per day. On the other side of the appeal there will be Donna and Robert Millar, ordinary people, and at the end of it all who will end up paying the massive legal bill, take a guess?



Is your argument that the FSO should never appeal a decision of the High Court? That would put it in a somewhat invidious position


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## Brendan Burgess (23 Jan 2015)

Fin 

Your argument seems to be "The taxpayer is bailing out the Financial Services Ombudsman, so they should not appeal High Court decisions" 

The total cost of the Ombudsman in 2013 was €5.4m, of which €1m was in legal fees.  This is by no means excessive. 

The Ombudsman must make the decision on whether to appeal a case or not, based on the merits of the case, and not the cost of legal fees. 

Brendan


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## Fin Crusader (23 Jan 2015)

Barneyg,

the High court has ruled on the matter, that appears to be the matter settled in a great number of instances in which the FSO is involved, but for some reason not so in this particular case. Let the bank appeal the decision, which they are entitled to do, if they wish to, as it has huge financial implications for that particular bank. In the ( unlikely ) event that the High Court decision is overturned then so be it, but at present the FSO cannot decide on like matters until this case has been heard in the appeals court. Say for example, the case is overturned in the Appeals Court and the Millars subsequently appeal the decision to the European Court of Justice, as they believe the variable rate term is an unfair term as set down in European legislation (si 27/1995 refers). Then the FSO cannot make a decision on any like matters coming before it, until this case has been heard by the ECJ. That could take a very long time, due process works both ways.


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## Gerry Canning (23 Jan 2015)

Fin Crusader said:


> The High court has ruled on the matter, that appears to be the matter settled in a great number of instances in which the FSO is involved. Let the banks appeal the decision, which they are entitled to do, as it has huge financial implications for that particular bank, if they wish to do so. In the ( unlikely ) event that the High Court decision is overturned then so be it, but at present the FSO cannot decide on like matters until this case has been heard in the appeals court. Say for example, the case is overturned in the Appeals Court and the Millars subsequently appeal the decision to the European Court of Justice, as they believe the variable rate term is an unfair term as set down in European legislation (si 27/1995 refers). Then the FSO cannot make a decision on any like matters coming before it until this case has been heard in the ECJ. That could be a very long time.


...................................
Fin ,
From consumer view (you have hit it on the head) !
Only the Danskes and the Rich can afford in money and time to wait.
Mr Joe Soap finally gets worn down , whilst believing in the fairy godmother! of equity.
Fin


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## Fin Crusader (23 Jan 2015)

Brendan, the FSO has it's own in house legal team, the legal costs you quote of 1 million euro, is the amount paid to external legal professionals only. The FSO's internal wage bill is just above 2.1million euro, and FSO legal fees another 1,235,000 euro on top of that


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## Fin Crusader (23 Jan 2015)

Gerry,
That what the bank is hoping for in this case.


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## serotoninsid (23 Jan 2015)

Gerry Canning said:


> ...................................
> Fin ,
> From consumer view (you have hit it on the head) !
> Only the Danskes and the Rich can afford in money and time to wait.
> ...


Brut force (by way of financial muscle) is being used to drive citizens attempts at accessing justice into the ground.  There was another decision recently (ref. offset mortgages) which was taken by people to the FSOB.  The decision was a fudge - and it appears that many of the complainants were not totally happy with the decision.  They had 21 days to go to the High Court.  Nobody can afford those sort of costs.
<<Post edited at Brendan's request - as was veering off topic - into the discussion of issues with both the integrity and cost of legal services in Ireland generally - my apologies>>


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## Fin Crusader (24 Jan 2015)

I hope the Millars also take action against Danske bank for overcharging on the variable rate home loans between feb 11th 2009 and nov 11th 2011, they have two weeks left to instigate legal proceedings.


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## advice (28 Jan 2015)

thank you very much to all the contributors, especially Fin Crusader, I will start proceedings against Danske bank immediately.


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## Miakk (6 Feb 2015)

The following comment could probably go under a number of different threads, but I think it sits well under this discussion, especially in light of yesterday's events re PTSB vs the Ombudsman and the subsequent involvement of the Central Bank.

Some posters on other threads have commented that they had identical cases to those in the ruling but the Ombudsman found against them.  Does this not raise significant issues for the operation of the FSO, in that the FSO might rightly be considered to not have acted fairly in these cases? (there is another thread relating to a high court case where the FSO was reminded to act fairly - think it was at the end of 2014.)

Aside from from the inaccessibility of the appeals process for the majority of complainants, I find it incomprehensible that this publicly funded organisation has no internal review process or apparent ability to identify and act upon cases where, even using their strictly legalistic approach, the evidence presented about the bank ( be it documentation, wording etc etc) has been interpreted in a different manner in individual cases.


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## Bronte (14 Feb 2015)

Goodness me what is a collateral contract?  I always understood what you sign is your contract and that's that, and you cannot later rely on brochures or advertising, most of which have legal disclaimers.


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## barneyg (15 Feb 2015)

The appeal was heard recently so hopefully the judgment will be delivered soon


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## WizardDr (15 Feb 2015)

My understanding is that judgment in Millar v FSO was 'reserved'. Those that read the initial judgment will know that Justice Hogan delivered the initial High Court judgment and that his judgment is hugely significant because it essentially tells the FSO that if they are simply interpreting contracts in a legalistic fashion - which is what they were doing - then there is little point to having the office. It went further and said that sometimes the legal interpretations are simply wrong. What it amounts to is what many of us thought should have been the case - that he weighs up the matters and does not have to be overly legalistic as opposed to fair. 

This reserve judgment in the new Court of Appeal seems likely to be 2-1 upholding Millar.

As the behaviour of Banks' on the tracker matter is so devoid of principles of fairness and honesty it would be difficult not to see the 6 year rule be put aside following this landmark case when Banks' unethical and unprincipled behaviour is finally established.


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## paul ward (27 Mar 2015)

when is judgement expected is their a time frame for reserve judgement


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## Gerry Canning (27 Mar 2015)

paul ward said:


> when is judgement expected is their a time frame for reserve judgement


Wizard,
From memory in 2010, the Law Reform Comm recommended to Government that the 6 year rule be amended.
Normally Law Reform Comm recommendations are enacted.
Not so in this case.
There are far too many (land-mines) waiting for Insurance/Banks for Government to enact this. I have no doubt (cannot prove it) that our Banks/Regulators/Legislature have gone into their Bank Protection Modes.If you look at make up of FSO/Central Bank Consumer people , they are ex-bankers and it is hard for them to have a true consumer hat. 
...........
In this specific case 6 year rule may be overridden but I ain,t sure will it apply in general.
What I think is each case will still be a (war) .
Hope Millars finally win.
.............................................
Paul .
Not sure what the time frame on giving judgment , normally judges give some indication.Has any AAM member heard?


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## paul ward (27 Mar 2015)

does not the independence of the court not come to the fore, regardless of the banks or goverment.


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## Gerry Canning (30 Mar 2015)

paul ward said:


> does not the independence of the court not come to the fore, regardless of the banks or goverment.


Paul,

If you mean Judges set the time frame you are correct, but I understood normally they give some indication of when they come back with judgments


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## hancaonhan (4 May 2015)

Also, my understanding is that the FSO is funded by a levy on financial providers, rather than receiving money from the taxpayer.


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## advice (5 May 2015)

To be clear, both points of view with regard to funding of the FSO are true in part. The FSO get funding by the Government imposing a financial levy on each customer account. The banks incorporate this levy into bank charges, so that Joe Public ends up paying for same. ( taxpayer pays indirectly ). Any shortfall in funding requirments in a given year are met by the government central fund  ( taxpayer pays directly ).


In relation to Paul Ward's comment, the public have a short memory, remember Judge Cyril Kelly and Justice Hugh O'Flaharty had to resign due to political telephone calls, etc. Never forget we are living in a  banana republic.


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