On 9 April 2023, the Minister for Finance published the General Scheme of the Financial Services and Pensions Ombudsman (Amendment) Bill (General Scheme).
The General Scheme proposes amendments to the Financial Services and Pensions Ombudsman Act 2017 (2017 Act), most notably to take account of the Supreme Court decision in Zalewski v Adjudication Officer and the WRC [2021] IESC 24, concerning processes of the Workplace Relations Commission (WRC). In Zalewski, the Supreme Court found that the prohibition on holding WRC hearings “otherwise than in public” was inconsistent with the Constitution. The Supreme Court also took issue with the lack of provision in the governing legislation for the administration of an oath, or the cross-examination of witnesses before the WRC.
A central purpose of the proposed amendments to the 2017 Act is to strengthen consumer protections and to safeguard access to the Financial Services and Pensions Ombudsman (FSPO) for customers of financial service providers who have left the Irish market.
The General Scheme will be referred to the office of the Attorney General for drafting of the Bill. The government has signalled its intention to progress the legislation through the Oireachtas in the coming months.
Notable Amendments
The General Scheme incorporates the following:
Head 3 – Section 2 – Interpretation:
It is proposed under this Head of the General Scheme to include a new sub-paragraph (i) to Section 2 in the 2017 Act. This will clarify that the FSPO has statutory power to investigate complaints against a financial service provider (FSP), which was regulated at the time of the conduct complained of, even if the provider has lost its regulated status before the complaint was made to the FSPO, or before the FSPO’s investigation had concluded.
Head 5 – Section 44 – Making of Complaints and Section 50 – Jurisdiction of Ombudsman:
Head 5 purports to clarify any potential overlap in jurisdiction between the FSPO and the Credit Reviewer. Currently, a consumer can appeal a decision of a FSP to the Credit Reviewer and lodge a complaint with the FSPO regarding the conduct of the FSP in relation to the same decision. This could result in the Credit Reviewer upholding a decision of the FSP, while the FSPO could uphold a complaint concerning how the decision was made.
If the changes are enacted, complainants may not make a complaint to the FSPO where the Credit Reviewer has already issued an Opinion to the complainant (Section 44) and the FSPO shall not investigate or make a decision on a complaint where the Credit Reviewer has issued an Opinion to the complainant (Section 50).
Head 6 – Section 47 – Powers of FSPO in relation to Investigation of a Complaint:
Currently the 2017 Act provides that the FSPO may request a person to attend before him and be examined on oath. Head 6 proposes amending the 2017 Act to include an express provision specifically providing for the cross examination of witnesses on oath.
Head 7 – Section 50 – Jurisdiction of FSPO:
The purpose of this Head is to correct a cross-referencing issue. Currently Section 50(1) of the 2017 Act refers to Section 54(1) instead of Section 50(3)(b). When the amendment is passed, the FSPO may accept a complaint against a FSP or pension provider where the FSPO believes on reasonable grounds that a FSP or pension provider initiated legal proceedings in relation to a complaint to prevent the making of the complaint or, to frustrate or delay the FSPO investigation.
Head 8 – Section 56 – Conduct of Investigation:
Head 8 purports to clarify provisions regarding the conduct of an FSPO investigation. The proposed amendment allows the FSPO to hold oral hearings in public (currently they are held otherwise than in public). Any decision is to be taken after consulting with the parties involved. Consideration will also have to be given to the nature or circumstances of the complaint and the interests of justice.
Head 11 – Section 62 – Decisions of Ombudsman:
General Scheme Head 11 proposes to amend a typographical error at Section 62 of the 2017 Act. Currently Section 62 refers to “a decision of the Ombudsman under section 61 or 62 in respect of a complaint” rather than “a decision of the Ombudsman under section 60 or 61 in respect of a complaint”. Section 60 relates to “Complaints and redress: financial service providers” and Section 61 relates to “Complaints and redress: pension providers“.
Conclusion
The General Scheme introduces welcome amendments to the 2017 Act. It is anticipated that the proposed amendments will significantly enhance the FSPO’s capacity to withstand potential legal challenges similar to those brought in the Zalewski case, and reinforce the statutory basis of the FSPO, which is a key element of consumer protection in Ireland.
Contributed Kate Abell
