The Act on Consideration of Complaints by Financial Market Entities and on the Financial Ombudsman provides that a complaint not resolved within the stated period “is regarded as” resolved in accordance with the customer’s request. In a surprising resolution, the Supreme Court recently ruled that this does not mean that a delay in consideration of a complaint mandates that it is resolved in the customer’s favour, but such a delay merely increases the burden faced by the entity during litigation. If, of course, the matter ever reaches the courts. Was this what the legislature intended?
Supreme Court resolution of 13 June 2018 (Case III CZP 113/17)
The regulations and who they apply to
The matter involved the interpretation of Art. 8 of the Act on Consideration of Complaints by Financial Market Entities and on the Financial Ombudsman of 5 August 2015.
The somewhat murky term “financial market entity” encompasses banks, savings and credit unions, as well as insurance companies. The issue of examining complaints is perhaps most relevant for the insurance sector.
The act reviewed by the Supreme Court only applies to “complaints” filed by customers who are natural persons—and potentially those filed by self-employed natural persons if the complaint is related to their business activity.
What makes a complaint?
A complaint is understood to be a claim in which the customer “files objections concerning services rendered by a financial market entity” (Art. 2(2) of the act), which usually (but not exclusively) involves how the customer’s particular matter is dealt with.
It should be noted that if the matter is being examined at the customer’s request (e.g. a claim for coverage of a loss by an insurer or a request for a payment holiday on a bank loan), the initial request does not constitute a complaint. Rather, the complaint is the customer’s ensuing writing challenging the way the request was resolved (e.g. an appeal from the insurer’s decision not to pay compensation).
What are the deadlines for examining a complaint?
According to Art. 6 of the act, a response shall be provided no later than 30 days from receipt of the complaint. Art. 7 provides an exception to the above and a maximum of 60 days if the complexity of the matter warrants it. This provision also requires that the customer be informed of such a delay. It is assumed that notice of the delay must be received by the customer within the “first” 30 days; if not, then the attempt to extend the deadline is void and the entity continues to be bound by the 30-day limit for examining the matter.
Is an unexamined complaint an approved complaint?
Here we reach the act’s key mechanism, and the primary subject of the Supreme Court’s ruling.
According to Art. 8 of the act, “When the deadline specified in Art. 6, and in certain cases the deadline specified in Art. 7, is not met, the complaint is regarded as resolved according to the customer’s request.”
This provision only appears to be clear, as it fails to provide a definite answer as to the legal effects of “regarding” that a complaint was “resolved according to the customer’s request.” There appear to be two ways this provision may be interpreted.
The first option states that the financial market entity is definitely obligated to fulfil the demands stated in the complaint and that this obligation’s existence may not be questioned in potential future litigation (or its amount in cases of monetary claims). This would even apply to instances where the assertions in the complaint are factually groundless. Such a conclusion can be reached if it is found that the act creates an irrebuttable presumption which, in the event of litigation, obligates the court to accept that the claims subject to the presumption (here the circumstances alleged by the complaint) are true regardless of the underlying facts and the parties’ arguments. Similar results may be reached through an assumption that Art. 8 of the act creates an obligation for the financial market entity to act in accordance with the substance of the complaint or an assumption that a failure to examine the complaint in a timely manner as defined by the act constitutes implied acceptance of the customer’s demands stated in the complaint.
The second option involves the assumption that the act only creates a rebuttable presumption—one that may be challenged during litigation. Under a rebuttable presumption, the court will find the relevant circumstances to be true unless they are proven to be false. This standard shifts the burden of proof to the party seeking to challenge the presumption. In the matter of a customer complaint, the burden of proof would be shifted to the financial market entity. In normal circumstances, it would be the customer’s obligation to establish that the circumstances under which he is making his claims were true, but the application of a rebuttable presumption requires the entity to establish the alleged facts to be untrue.
It should be noted that legal presumptions (both rebuttable and irrebuttable) apply to findings of fact and not law. This leads to the conclusion that the presumed validity of the complaint refers only to the factual description provided in the complaint. Thus, if the complaint raises other issues, such as interpretation of the customer’s contract (e.g. whether a particular type of accident is covered under the insurance policy) or interpretation of the parties’ statutory rights and obligations, the presumptions would not affect the determination of these issues.
In its 13 June 2018 resolution, the Supreme Court chose the latter of the two options, holding that the act creates only a rebuttable presumption which shifts the burden of proof from the customer to the financial market entity.
Was the Supreme Court right?
For now, we may only speculate as to the reasoning that led to the court’s ruling (the court’s full opinion has yet to be published). Still, we can question whether the result was an appropriate one.
The Supreme Court’s interpretation of Art. 8 does not reflect its plain meaning, as evidenced by the comments elicited by the ruling. The act creates a rather clear appearance (and thus also an expectation) that an entity’s failure to meet the deadline for examining a complaint should result in its acceptance. It can be assumed that this was also the legislative intent, even though the act’s legislative record does not provide a definite answer.
It appears that the act’s legal effect, as discerned by the Supreme Court, is significantly more subtle and would not be obvious to a layman. Under the Supreme Court’s interpretation, the act does not require that a complaint examined after the deadline is to be accepted, but merely increases the financial market entity’s potential risks related to its failure to examine the complaint in a timely manner. Furthermore, this limited risk only comes into play if potential litigation does take place. This is particularly significant, as a great number of customer complaints never reach the litigation stage. As a result, the Supreme Court’s interpretation of the act does not create significant pressure on financial market entities to accept complaints which they failed to examine in the timely manner set out by the act.
The Supreme Court’s approach is most likely a consequence of the fact that the legal interpretation of the phrase “is regarded as” usually (but not always) supposes the creation of a presumption. Since Art. 234 of the Civil Procedure Code states that legal presumptions are subject to rebuttal unless the relevant act provides otherwise—and Art. 8 of the act here does not specifically provide for the creation of an irrebuttable presumption—it follows, the Supreme Court reasoned, that only a rebuttable presumption is established by Art. 8 of the act.
While this line of reasoning is certainly logical, it can still be argued that it deviates from the provision’s intended effect by failing to fully consider its consumer protection role, thus weakening its effectiveness.
Furthermore, the mechanism the Supreme Court discerned within the provision is, to some extent, not reflected in the article’s wording. After all, Art. 8 of the act does not state that if the customer’s complaint is not examined within the deadline then it is regarded as being “justified,” but that it is regarded as being “resolved according to the customer’s request.” Clearly the letter of the law does not address the issue of the complaint’s accuracy (nor its justification in the terms of the contract or relevant legal provisions), but simply mandates that the entity’s failure to respond is to be regarded as its acceptance of the customer’s claim.
This is why it appears that an interpretation which deems that Art. 8 of the act results in the entity’s implied acceptance of changes to the terms of the parties’ contract (as proposed by the customer’s complaint) is an appropriate one. This interpretation allows Art. 8 of the act to be considered in relation to provisions such as Art. 682 of the Civil Code, which states: “If a business receives from a person with which it has ongoing business relations an offer to execute a contract as part of its activity, the lack of an immediate reply is deemed an acceptance of the offer.” Under this interpretation, Art. 8’s intent would not be to establish a presumption, but to statutorily attach a particular meaning (“is regarded as”) and effect to the financial market entity’s silence (failure to respond in a timely manner).
What if the Supreme Court got it wrong?
The Polish legal system does not follow the principle of precedents, and a judgment by a court (even the Supreme Court) does not establish the law and is generally not binding in subsequent cases. There is a narrow exception to this rule which applies to a specific type of Supreme Court resolution, which does not apply in the present case. Theoretically this means that the judgment is not binding in other cases and all courts are free to rule otherwise. In practice, most rulings will likely follow the Supreme Court’s interpretation, which does not preclude the possibility that a different Supreme Court panel, sitting in a different case, will eventually revise this approach.
Until then, it is best not to assume that a complaint left unexamined by the addressee has been accepted.
Maciej Zych, adwokat, Dispute Resolution & Arbitration practice, Insurance practice, Wardyński & Partners