I thank the Ceann Comhairle for allowing me to raise this issue. The Minister will be aware that Department officials were heavily involved in the origins of the scheme that evolved into the Office of the Insurance Ombudsman of Ireland, which provides a cost effective and accessible alternative means of redress for the aggrieved consumer. At the same time, the office provides an accessible, informal and effectively quasi-judicial complaints procedure while offering the industry substantial savings on disputes resolution.
Private sector ombudsman schemes have been established and work effectively in other jurisdictions but their success is predicated on noninterference by the industry. Towards that objective in the Irish context, a structure comprising a council as well as a board was put in place to ensure an arm's length approach. Essentially, the task of the council is to appoint the ombudsman, to meet quarterly and to ensure that she is properly funded to discharge her functions.
In an industry where legal costs associated with disputes resolution are enormous, the Office of the Insurance Ombudsman in its first five years has saved millions of pounds and processed 15,000 complaints. Can the House imagine the usual route — the courts and what that would cost — for the resolution of 15,000 cases? Many of the complainants would not have the financial capacity to access the courts in the first instance. Yet the budget for the office for the year ending 31 December 1997 was no more than £370,000. I invite the House to contemplate the savings if a similar scheme existed to process Army deafness cases.
There are two types of ombudsman, a concept which originated in Scandinavia, state ombudsman or private sector ombudsman. There are famously two problems associated with the discharge of an ombudsman's duties, whether state or private sector. The first is censorship and the second is funding. The role of the ombudsman is undermined if he or she is oppressed by either problem. Hence the preference in many quarters for a statutory based scheme.
It was only after years of procrastination by the insurance industry in Ireland that the private sector scheme evolved. After five years it is apparent that the Insurance Ombudsman of Ireland has been beset by the two problems to which I referred, censorship and funding. In this regard, the public letter from Mr. Bill McLoughlin who felt compelled to resign from the council is revealing. Mr. McLoughlin wrote that "it took four years to overcome persistent internal resistance to house the scheme properly". He continued: "Despite the obvious savings to the industry, she has had to battle constantly for funds to be paid on time". Mr. McLoughlin went on to talk about "the continuance of a totally unnecessary overdraft".
More remarkably, Mr. McLoughlin alleges that Ms Marrinan-Quinn "has had to resist unrelenting bullying since the moment she took up her office". It is also claimed that the council sought to approve and alter the ombudsman's annual report. I hope the Minister does not think this is amusing, because I certainly do not.
