Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I welcome that Deputy Pearse Doherty's Bill has reached Report Stage and commend him in that respect.

There is general consensus in the House that the kernel of the Bill, the six-year rule, needs to be addressed. There have been a number of pieces of legislation at various stages of the system in an effort to tackle that issue and I hope we can reach an agreement as to how to do it. The reality is that many thousands of financial services consumers are potentially affected by this issue.

I ask the Minister of State to clarify where this Bill sits in relation to the Government Bill. We seem to have this parallel discussion on an ongoing basis, with Second Stage of the Government Bill being taken on Thursday. The Government Bill is a much longer Bill and deals with a number of wider issues as well as this issue. If this Bill is enacted before the Government Bill, will the Government Bill supersede this Bill if it becomes an Act? Will this Bill be repealed by the enactment of the Government Bill? How will it work in practice if Deputy Doherty's Bill is enacted first and followed shortly afterwards by the Government Bill being enacted? Where will the two sit legally side-by-side?

On the issue of the definition of a long-term financial service, I fully understand that a financial service product that is subject to an annual renewal is not a long-term financial product. That is based on common sense. My issue with the Government's amendment No. 1 is that if the financial service product contains a right to unilateral cancellation by either party, prior to the expiry of the actual or intended duration, in effect, under the Government's definition, it does not constitute a long-term financial service product.

My understanding of a long-term financial product would be along the lines of a pension, mortgage, life assurance policy, life insurance policy or long-term investment product. In the past we have raised issues related to whole-of-life insurance policies and payment protection policies, which Deputy Doherty mentioned. My view on amendment No. 1 is that I accept that if a product has an annual renewal, it is not a long-term product. However, just because a product has a clause in it that the financial service provider can cancel it does not mean it is not a long-term financial service product. I am not a legal expert, but I imagine that if one went into the minutia of the terms and conditions of most of the types of product I mentioned, there would be some get-out clause for the financial services firm. I hope the Minister of State can address that issue. My instinct is that I would not agree with the Government's provision in amendment No. 1 that if it contains a clause for unilateral cancellation, it is not a long-term product.

The nub of the issue relates to amendment No. 7, which Deputy Doherty is inclined to accept. This amendment would replace the existing six-year rule. I just went through some examples in my own mind. Looking back at the payment protection insurance situation, 83,500 customers gained recourse following the Central Bank investigation, involving refunds of over €71 million, but of course it only related to customers who had taken out their policy since 1 July 2007 from 11 different credit institutions.

In a scenario where somebody took out their product prior to 1 July 2007, but only became aware of it in 2013, it could be argued that they are not covered by the Bill. However, there is the provision for the ombudsman to take a longer view of it provided the subsection (3D) provision that "the conduct complained of occurred during or after 2002" is relevant and that "that the long-term financial service concerned has not expired or otherwise been terminated more than 6 years before the date of the complaint". Taking the example I cited, if somebody had bought a PPI policy prior to 1 July 2007 and became aware of a problem in 2013, then at the discretion of the Financial Services Ombudsman, that complaint could now be taken. I ask the Minister of State to clarify that my interpretation of it is correct in that regard.

I welcome this discussion and I hope we can reach agreement on the key issues involved in the Bill over which I believe there is wide agreement. We are down to the finer details of this, which are important. Tens of thousands of customers have been denied justice by virtue of the six-year rule, which I know was caught up in a wider Statute of Limitations scenario. The Government has said for some time that it is willing to review this - here we are now and I hope we can get the job done. I would appreciate a response to those issues.

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