Ulster Bank will appeal to the Supreme Court a ruling that it cannot introduce new evidence in its action against the financial services ombudsman.
Ulster Bank yesterday made an application in the High Court to continue its appeal against the decision by ombudsman Joe Meade that it should compensate investment customers a total sum of €7.4 million, while simultaneously appealing to the Supreme Court a High Court ruling on the scope of the case.
Earlier this month, High Court president Mr Justice Finnegan ruled that Ulster Bank could not present additional evidence in the appeal that it did not give to Mr Meade during his investigation. The judge also refused to allow both appeals to go ahead simultaneously and the High Court appeal against the ombudsman's ruling will now not take place until after the Supreme Court makes its judgment on the legal point of whether new evidence can be allowed.
The original appeal, lodged last February, centres on the ombudsman's decision to direct Ulster Bank to pay significant compensation to customers who invested in the bank's international share portfolio.
After an investigation into nine complaints from disgruntled investors, Mr Meade told the bank to reverse its 15 per cent reduction in the value of the fund, which occurred in November 2004. This would require the bank to compensate around 500 investors a total of €7.4 million.
Ulster Bank wrote off 15 per cent of the fund in a "deferred tax asset" adjustment. The main reason behind the loss was that the fund was unable to write off previous losses against tax liabilities. Under the deferred tax asset adjustment, the tax on future gains can be written off against past losses. But as the fund failed to make the expected gains, the entire value of the deferred tax asset had to be written off.
As a result of the case, Mr Meade asked the Irish Financial Services Regulatory Authority to review the practice at the bank and at any other financial institution operating a similar policy.
Having initiated its appeal against Mr Meade's decision, Ulster Bank argued that it should be allowed introduce additional evidence. Mr Meade maintained that the court should make its decision solely on the evidence that the bank presented to him at the time of his investigation. On November 1st, the High Court ruled in favour of Mr Meade.
