Why is it that different important financial documents, or reports, end up being given different, or indeed even scant or non-existent, treatment by the media? Is it because the creators of such documents are precluded by law from seeking exposure for such documents? Is it because the media sometimes have warped ideas about what is ‘important’, what has ‘news value’, what makes ‘good television’ or ‘good radio’? Is it because out there in the wide public space there is so much of accepted ‘hay eating’ that the masses will persist in wanting only more and more ‘hay’?
Let me suggest one example of a most important financial document which, to the best of my knowledge, was given next to total short shrift in Malta’s media: the Annual Report for 2017 of Malta’s Arbiter for Financial Services made public in late June of 2018 after its submission according to law to the Minister for Finance. This is a report, a document, which over the past six months has featured close to nowhere in TVM, One, Net, or any of the printed media’s regular news coverage or printed reports. And yet, if one really wants a good picture of the types of aches and pains which claimants in finance disputes, of various types, have to undergo when seeking redress for alleged misdoings towards them by financial services providers, then this is possible the best place to look at.
The Annual Report by Malta’s Arbiter for Financial Services has to be submitted to the Minister for Finance in terms of Article 20 of the Arbiter for Financial Services Act (chapter 555 of the Laws of Malta). It includes a lot of material which indeed is the interesting-to-read-stuff that goes beyond the national financial services Arbiter’s (Reno Borg) report, and the chairman of the Arbitry’s Management Board Geoffrey Bezzina’s message. Legislating in 2016 to submit disputes between customers and providers of financial services to this then new formal set-up was a brave and progressive step for Malta to take, and can be described as yet another attempt taken in this country for alternative dispute regulation, ADR: alternative that is to this misguided national mindset that we all seem to have, as a people, where it is only ‘the courts’ that can be a good, true, just, correct and efficient final outcome of all disputes occurring in the land.
This is a document that deserves careful reading and respect
For many years our law students have been taught about the basic administrative law tenets of correct analyses and decision-making in disputes at basic efficiency levels, competence in treatment and procedure, familiarity with the law, principles of natural law respect, and minimum of time wasting. At some point, wrongly of course, much thinking and practice seemed to limitedly shift into just what the COCP says, with, some would argue, Article 469A being a main thematic core before the courts. But the functioning of administrative law tribunals, and indeed even the whole process itself of arbitration, and possibly other modes of ADR, have, time and again, been attacked from various vested interest fronts, and so practically the whole of ADR is in Malta still undergoing a very pained and painful growth process.
And so this 2017 report of the national arbiter for financial services disputes can also be seen as part of this painful growth. The question beckons: now that this law has been in place for over two years what are the indications? A table on page 19 of the report, showing some statistics about the number of enquiries and minor cases which the arbiter’s office handled during 2017, shows that during that year no less than 831 cases, dealing with 48 thematic areas from the environments of the local banking, investing, and insurance scenarios, were dealt with by the Arbiter’s office. One needs to compare this figure with the trend for consultancy figures in terms of, say, the last three years during which the former situation in the country then provided for the existence of a national Consumer Complaints Manager in terms of the former article 20 of the MFSA Act. Are aggrieved bank account holders, citizen victims of investment mis-selling practices, insurance client complainants, et similia, who feel that they have received a raw deal, now seeking the national arbiter’s services more or less than previously?
The truth is that it is still far too early to say, but then this interesting report still manages to give the reader no less than 36 pages of summaries of cases that span many areas, and which all make extremely interesting reading: for example an insurance claim on an item lost in the post, a claim for the value of an irreparably damaged vehicle, one about repayment of an outstanding home loan, an interesting case of appointment of two brokers for the sale of a same investment, a case involving a shortfall in cash deposited at a local bank branch, a foreign currency conversion case, one about decrease in the value of a sold investment, and so on and so forth: each summary shows the care, attention to detail, and hard work put in by the Arbiter to reach what essentially then becomes a binding decision in terms of the detailed merits of each case.
Another important part of this report features a list of the financial services providers in Malta against whom complaints were lodged with the office of the Arbiter for FS during 2017. No less than 175 licensed firms operating in Malta were the targets of these complaints, and the list includes all the main banks, insurance companies, and investments selling organisations in the country. So, yes, no FS operator is immune and it is good that the average complainant in the country certainly does not come across as inhibited by size or reputation.
This document is a highly promising one for financial services arbitration in the country. It clearly demonstrates that a lot of hard, and good, work has been done, and that all of this work was, in 2017, carried out on a total financial outlay of only €664,710, well that is clearly indicative that as future case loads may start to increase then more resources will have to be pumped into the office. But, above all, as suggested above this is a document that deserves careful reading and respect.
Dr John Consiglio lectures on Bank Regulation at the University of Malta.