Contributed By Matheson (Dublin - HQ)
Insurance disputes may also be dealt with by way of ADR and it is common for insurance contracts to contain a clause requiring the dispute to be dealt with by ADR. In Ireland the most common forms of ADR are mediation and arbitration.
Where an insurance contract contains an arbitration clause, a dispute must be referred for arbitration. However, as noted above, consumers are not bound by an arbitration clause where the claim is less than EUR5,000 and the relevant policy has not been individually negotiated.
The Arbitration Act 2010 (the “2010 Act”) repealed all previous arbitration legislation in Ireland and incorporated the UNCITRAL Model Law on International Commercial Arbitration. Under the 2010 Act, the decision of an arbitrator is binding on the parties and there is no means of appeal. Where parties have entered into a valid arbitration agreement the courts are obliged to stay proceedings.
Interim measures of protection and assistance in the taking of evidence may be granted by the High Court; however the arbitral tribunal may also grant most interim measures. Jurisdiction of the dispute is effectively passed from the court to the arbitrator once an arbitrator is appointed and the parties agree to refer their dispute for the arbitrator’s decision. Although there are additional costs incurred for an arbitration, there is the benefit of confidentiality of the dispute.
Ireland is party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, allowing Irish arbitral awards to be enforced in any of the 157 countries party to the Convention.
The courts can set aside an arbitral award under Article 34 of the 2010 Act, but only on very limited grounds. The party seeking to have the arbitral award set aside must furnish proof of the following:
The Mediation Act 2017 (“Mediation Act”) came into force on 1 January 2018. Under the Mediation Act, solicitors in Ireland must advise their clients of the merits of mediation as an ADR mechanism before proceedings are issued. The solicitor must swear a statutory declaration confirming that they have advised their clients on the benefits of mediation, which is filed with the originating document.
The Mediation Act makes provision for any court to adjourn legal proceedings to allow the parties to engage in mediation. The court can make such order on its own initiative or on the application of either party to the proceedings. There may be costs implications where either party fails to engage in ADR following such a direction from the court.
The Financial Services and Pensions Ombudsman
The Financial Services and Pensions Ombudsman (FSPO) is the amalgamation of the Financial Services Ombudsman and the Pensions Ombudsman, pursuant to the Financial Services and Ombudsman Act 2017. The FSPO is an independent body, established to resolve disputes between consumers and insurance providers either through informal means, such as mediation, or by way of formal investigation. The FSPO’s decision is legally binding, with a right of appeal to the High Court.