The Finance Minister has appointed January 1, 2018 as the date on which the Financial Services and Pensions Ombudsman Act 2017 (the “FSPO Act”) will come into operation.

Headline changes under the FSPO Act:

1. Dissolves the offices of the Pensions Ombudsman and the Financial Services Ombudsman Bureau
2. Establishes the office of Financial Services and Pensions Ombudsman (“FSPO”)
3. Appoints a single office holder, the ‘Financial Services and Pensions Ombudsman’ (the “Ombudsman”)
4. Regulates procedures for complaints to the Ombudsman.

Time Limits for complaints against financial service providers:

Since July 2017, legislation has been in place (the Central Bank and Financial Services Authority of Ireland (Amendment) Act 2017 (the “CB Act”)) which extends the previous time periods for complaints in relation to long-term financial services.  The FSPO Act will repeal the CB Act, whilst retaining the extended time limit for such complaints.  Under the FSPO Act, a “long-term financial service” is defined as a financial service with a duration of 5 years and 1 month, or more, and also life assurance policies.  Section 51 of the FSPO Act provides that such complaints against a financial services provider can be made on the later of:  

1. 6 years from the date of the act or conduct giving rise to the complaint; or
2. 3 years from the earlier of the date on which the person became aware of the act or conduct given rise to the complaint or ought reasonably to have become aware of that act or conduct; or
3. within such longer period as the Ombudsman may allow where it appears to him just and equitable to so extend.

To avail of the extended time period, the long-term financial service must not have expired or been terminated more than 6 years before the complaint, and the conduct complained of must have occurred during or after 2002.  This in effect means that the FSPO Act has retrospective effect.   

For other short-term financial services, the current 6 year time limit is retained.

Other Notable Aspects of the FSPO Act: 

• Allows a complainant whose complaint was refused on the basis of time under the old regime to re-submit their claim to the Ombudsman, where it falls within the time limits under the FSPO Act.
• Enables the Ombudsman to require “any person” to provide information, documents or give evidence that the Ombudsman believes is relevant to the investigation of a complaint. Previously, the Ombudsman’s powers only extended to compel documents or information from a financial services provider or an associated entity thereof and to officers, members, agents or employees of the financial services provider to give evidence. 
• A decision of the Ombudsman is final, subject to right of appeal to the High Court within 35 days (previously 21 days).
• The Ombudsman may consider a complaint before the internal dispute resolution process is complete where a financial services provider has failed to complete the review within the time limit or the Ombudsman determines a complaint is of such importance as to warrant waiving the internal dispute resolution procedure.
• Allows an appropriate person to refer a claim on behalf of a deceased complainant, a minor or a complainant that is unable to act for himself or herself.
• The Ombudsman is obliged to inform the Central Bank of Ireland where there is a persistent pattern of complaints or facts or evidence against a financial services provider.   
• Retains the ‘name and shame’ provisions of the previous regime, such that where a financial service provider has 3 or more complaints against it upheld, substantially upheld or partially upheld in the preceding financial year, the Ombudsman can name the financial service provider in its annual report.

Whilst the FSPO Act is a welcome modernisation of the legislation governing complaints against financial services providers, the extended limitation period will result in a significant increase in complaints.  All financial service providers, including insurers, should consider the resulting impact on their complaints processes and procedures. 

Contributed by: Catherine Carrigy and Gail Nohilly

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