Bill to bring financial services and pension complaints procedure in line with Irish Constitution

The Irish government’s recently published Financial Services and Pensions Ombudsman (FSPO) (Amendment) Bill (10 pages / 585 KB) is intended to enhance the legal clarity of provisions within the Financial Services and Pension Ombudsman Act 2017 (65 pages / 615KB). The FSPO is an independent statutory body which investigates, mediates, and adjudicates unresolved consumer complaints about financial services firms and pension providers in Ireland.

The bill is primarily a response to the constitutional justice issues raised in a 2021 Supreme Court ruling in respect to the adjudication process applied by the Workplace Relations Commission (WRC) to employment disputes in its quasi-judicial role. This role allows the WRC to administer justice despite not being a judicial body itself, and the Supreme Court held that the WRC was required to do so to a standard equivalent to that of a court.

Lisa Carty, financial services expert at Pinsent Masons said: “The FSPO offers consumers an independent, impartial, and free service that helps resolve complaints with pension providers and financial service providers. The amendments proposed in the bill will serve to enhance the FSPO’s ability to withstand potential legal challenges on constitutional justice grounds.”

The proposed changes would widen FSPO powers of examination under oath to cover cross examination. It means that a party involved in an investigation could be required to be “examined or cross-examined on oath or affirmation” to provide evidence during the complaints process. This would bring the powers in line with the Constitution, with cross-examination an aspect of constitutional justice referred to by the Supreme Court in its 2021 judgment. The bill also proposes the introduction of a new offence of “obstruction the work” of the FSPO by giving evidence on oath or affirmation that is false or known to be false.

The current legislation allows the FSPO to conduct oral hearings if required. If the proposed amendments enter into law, oral hearings will be permitted to be held in public. However, parties who would be involved in the hearing will be consulted prior to a decision to publicise, considering the nature of the issue before deciding to hold a public hearing. A further proposed amendment confirms that FSPO mediations will continue to be conducted in private.

Although not currently included in the bill, Minister for Finance Michael McGrath indicated in a recent Dáil Éireann debate that he would seek to introduce an amendment to provide the FSPO with the discretion to identify the parties to a complaint in a decision, case study or report where a public oral hearing has been held. At present, FSPO decisions and case studies are published on an anonymised basis, although the FSPO does have the power to annually “name and sham financial service providers which have had at least three complaints upheld against them in the preceding financial year.

Among other things, the proposed amendments also aim to ensure consumers can make complaints in respect of the conduct of financial service providers and pension providers who have left the Irish market. They aim to clarify any potential overlap in the powers split between the FSPO and the “credit reviewer” – a body appointed by the government to review decisions to refuse credit facilities and loans made in a business or corporate finance context. Under the current legislation, a consumer could appeal a decision to refuse a credit facility to the credit reviewer while at the same time lodging a complaint with the FSPO regarding the same conduct. The bill proposes to remove the option of making a complaint to the FSPO in circumstances where the conduct complained of related to a matter which is within the authority of the credit reviewer.

The bill will pass through several stages before the Dáil and Seanad and may be subject to significant amendments before it is signed into law.

Co-written by Sadhbh Kelleher of Pinsent Masons.