The tracker mortgage scandal filled broadcast, social and print media in Ireland for weeks and, in terms of its impact on citizens and financial cost to the State and/or state-sponsored entities, maybe second only to the Hep C / HIV contaminated blood products scandal. Opposition Front Bench TD Michael McGrath has suggested that the ultimate cost of redress and compensation for all those affected could rise to half a billion euro and be “one of the greatest consumer rip-offs” in the history of the State. Test cases in the High Court are already planned in circumstances where most of the mortgage loan providers in the State are implicated and where it is alleged many continue to withhold information from the Central Bank Regulator and offers of redress and compensation from affected customers.
The issues to be contended with are many and varied and may include Providers’ delay in addressing claims or failure to implement redress schemes or acknowledge other classes of detriment suffered by customers, discrimination against customers who switched providers and review of settlements already reached with customers. Indeed, Providers could even face criminal charges.
Customers may have been wrongly taken off tracker mortgages, have had incorrect interest rates applied and may not even have been properly identified as such. Assessment of financial loss will be complex having to consider the cost of independent legal and other advice, issues such as mental and marital breakdowns, ill health or other detriment caused by financial stress.
With the recently enacted Mediation Act 2017, can mediation, now an integral part of our civil justice system, have anything to offer the Providers and their Customers or hare they all destined to spend the coming years enduring the further stress, time, cost, uncertainty and risk associated with litigation, compensation tribunal or other adjudicative processes?
As a mediator on the FSO panel, frequently helping the Banks and their customers agree a sensible, workable way forward I have no doubt that mediation can play a huge part not only with helping on individual cases but also in the dialogue between regulator and banks for the following reasons:
1) Mediation is a significantly faster process – taking a dispute through the courts takes time. Mediation offers a way to avoid the courts and to reach an early resolution agreement;
2) Costs can be substantially lower – certainly than costs associated with progressing cases through the courts;
3) Confidentiality – mediation is a private, confidential process that can benefit Customers and Providers alike, who will have different reasons for wanting privacy;
4) Control – mediation offers parties in a dispute the opportunity to retain control over the process and input into a settlement that is workable for them. A court setting normally results in a judge imposing a decision, ruling or determination on the parties;
5) Seeks a mutually-agreeable solution – it’s critical that business relationships and reputations are maintained. Mediators can explore more creative solutions to disputes than are available in court, and help parties to find mutually acceptable outcomes, unavailable through the court process, which can be hugely important, particularly where a business relationship may need to continue following that resolution. Working together in mediation can repair and rebuild trust in the relationship;
6) Independence and impartiality – a carefully selected, independent mediator, completely external to the Providers, the Central Bank, the FSOB or any other state agency will guarantee independence and impartiality of the mediator for both sides.
William Aylmer is a CEDR Panel mediator and a Certified Member of the Mediators’ Institute of Ireland. His mediation practice covers a wide array of commercial sectors including financial services – banking and insurance, commercial sponsorship, shareholding, employment and workplace, partnership, rent review, public sector, probate and administration of estates.