Lawyer's comments on national legislation
At the beginning of February “Blue band” Centre supported by UNDP Developing Program and Counsel of Europe presented draft of the Act named “As to the introduction of financial ombudsman’s service in Ukraine”. The representatives of the Centre believe, that financial ombudsman will be able to become an arbitrator between financial services’ consumers and financial institutions.
An idea of the establishment of the financial ombudsman institute isn’t new. There are injudicial services for alternative settlement of financial disputes in many countries-members of the Council of Europe. Commonly, they use mediation technology, which helps in settling the dispute amicably. The special feature of this technology is the participation of a third party – independent and impartial – mediator, who will be able to help in solving of an existing problem.
It’s suggested to institute not only a financial ombudsman, but also its services in Ukraine. The draft of the Act includes existing of financial difficulties in adjudications, the sum of which isn’t clear yet. For example, in Russia the financial ombudsman tries disputes between financial institutes and their clients to the sum of 300 000 rubles. The procedure may be initiated only by individuals. Although intermediate courts and some other financial institutions may interpret an ombudsman as a potential rival, the opportunity to solve the dispute not judicially is absolutely European and democratic practice.
However, considering the Ukrainian possibility to turn out the European habits and values, the answers to the next two questions should be given.
How much should the country pay for this? If expenses connected with financial ombudsman’s work as funded by financial institutions, it won’t infringe on ordinary people finances. However, in opinion of some law experts, the independence and impartiality of service may be under the question if such a case. Still the creation of another authority, supported by the budget, probably won’t be welcomed in society.
Will the service of financial ombudsman be effective? This institute is designed to consider consumers’ complaints against financial institutions, and as the Center’s experts say, will make settlement of disputes cheaper in comparison with legal procedures. But as it was repeatedly underlined by the European Court of Human Rights, non-execution of the national courts’ judgments is a systematic problem in our country. Particularly, in a pilot judgment Yuriy Nikolayevich Ivanov v. Ukraine, 15/01/2001, the Court obliged Ukraine to establish an effective remedy against systematic failure to execute Ukrainian courts’ decisions. That’s why, not judicial decisions of the financial ombudsman may arise under the threat of non-execution, and consequently his work could be ineffective.
Thus, as a result we can observe the next situation: pre-trial disputes’ settlement is really able to relieve courts and bring to amicable dispute adjustment in shorter terms. However, considering systematic problems of Ukraine in execution of judgments, the effectiveness of decisions of a financial ombudsman is doubtful. There is only hope, that if such remedy as service of the financial ombudsman will be made, its leader will be a strong-will and really independent person.
