Proposed Amendments to the Financial Services and Pensions Ombudsman Act 2017

The General Scheme of the Financial Services and Pensions Ombudsman (Amendment) Bill (‘General Scheme’) was published in April 2023.

The General Scheme proposes a number of amendments to the Financial Services and Pensions Ombudsman Act 2017 (‘2017 Act’), which established the Office of the Financial Services and Pensions Ombudsman (the ‘FSPO’).

Purpose of the General Scheme

Notable amendments proposed by the General Scheme follow the Supreme Court decision in Zalewski v Adjudication Officer, the WRC and Ors. [2021] IESC 24 (‘Zalewski Case’), which held that certain processes of the Workplace Relations Commission (‘WRC’) were inconsistent with Article 34 of the Constitution. This included the prohibition on the hearing of oral evidence in public and the lack of provision for the administration of the oath. The General Scheme is, in part, proposed to protect against any similar constitutional challenge to the 2017 Act on account of the quasi-judicial processes and procedures exercised by the FSPO.

In addition, the General Scheme seeks to prevent jurisdictional overlap between the FSPO and the Credit Reviewer and includes proposals to strengthen consumer protections and safeguard access to the FSPO.

Key Changes Proposed

Some of the key changes proposed in the General Scheme include the following;

Conduct of Investigations

• Oral evidence in public or private

At present, the 2017 Act makes no provision for the public hearing of oral evidence.

Head 8 of the General Scheme proposes to amend section 56 of the 2017 Act to allow the FSPO to hold oral hearings in public based on a consultation with the parties and having regard to the “nature or circumstances of the complaint and whether it is in the interest of justice to do so”.

• Administration of the Oath and Cross Examination

Head 6 of the General Scheme proposes to amend section 47 of the 2017 Act to provide for the cross-examination of witnesses under oath.

Head 10 proposes to amend section 59(1) of the 2017 Act to provide that giving false evidence on oath, whether wilfully or corruptly, is an offence punishable by a fine or up to 3 months imprisonment, or both, if convicted.

• Ensuring mediation is always conducted in private.

Head 9 seeks to ensure that mediations conducted by the FSPO are held in private and that anything said or admitted during such a mediation is not admissible in any subsequent investigation by the FSPO or in proceedings before any tribunal or court in the State.

Jurisdiction of the FSPO and Credit Reviewer

The General Scheme proposes to amend section 44 of the 2017 Act by including in Head 5 that;

• A complainant may not make a complaint to the FSPO where the Credit Reviewer has already issued an opinion on the same issue; and

• The FSPO may not investigate or adjudicate on a complaint where the Credit Reviewer has already issued an opinion on the same issue.

Access to the FSPO for customers of banks leaving the Irish market

It is proposed that section 2 of the 2017 Act will be amended to expand the scope of the definition of a financial service provider (‘FSP’) to include FSPs which were regulated at the time of the conduct the subject of the complaint, even if the FSP has lost its regulated status before the complaint was made to the FSPO, or before the FSPO’s investigation has concluded. The purpose of this amendment is to allow continued access to the FSPO for customers of banks leaving the Irish market.

Clarification of FSPO Jurisdiction

The General Scheme seeks to clarify that the FSPO may accept a complaint where the FSP has initiated legal proceedings and the FSPO reasonably believes that these proceedings have been initiated to frustrate or delay its investigation or to prevent the making of a complaint.

Conclusion and Next Steps

The General Scheme, once enacted, aims to develop the processes and procedures of the FSPO and deal with any potential challenge similar in nature to the constitutional issues raised in the Zalewski Case. It also serves to safeguard consumer interests, while the proposed protection for customers of FSP’s leaving the Irish market would be an important addition to the 2017 Act.

It is anticipated that the legislation will progress through the Houses of the Oireachtas in the coming months.

The author would like to thank Andrew Finlay for his contribution to this article.