Wednesday, 10 March 2021
Department of Finance
292. To ask the Minister for Finance if his attention has been drawn to defects in sections of the Financial Services and Pensions Ombudsman Act 2017 whereby banks can initiate proceedings to avoid adjudication in defects in their treatment of a customer; and if there are plans to consult the Ombudsman regarding the need to amend the Act to make it more fit for purpose in this respect or in other respects. [13186/21]
As the Deputy will be aware, the Financial Services and Pensions Ombudsman (FSPO) is independent in the performance of his statutory functions. I have no role in the day to day workings of the office or in the decisions which he takes.
One of the main roles of the Ombudsman is to investigate, mediate and adjudicate complaints about the conduct of financial or pension service providers. The Financial Services and Pensions Ombudsman was established on 1 January 2018, by the Financial Services and Pensions Ombudsman Act 2017 (‘the Act’). The Act outlines the functions of the FSPO in the investigation of complaints against financial service providers and pension providers.
Section 44(2)(a)(i) of the Act prescribes that
“a complainant may not make a complaint...where – the conduct giving rise to the complaint is or has been the subject of legal proceedings before a Court or Tribunal.”
This position is however, counterbalanced by the provisions of Section 50(1) which provides that:
“Notwithstanding Section 44(2)(a)(i)the Ombudsman may accept a complaint against a financial service provider or a pension provider that has initiated legal proceedings in relation to a matter to which the complaint relates, where the Ombudsman believes, based on reasonable grounds, that the financial service provider or the pension provider, as the case may be, has begun those proceedings in order to prevent the making of the complaint, or to frustrate or delay its investigation.”
The provisions of Section 50(3)(b) are also relevant, as these prescribe that
“The Ombudsman shall not investigate or make a decision on a complaint where... there are or have been proceedings (other than where the proceedings have been stayed under Section 49) before any Court in respect of the matter that is the subject of the investigation.”
Section 49 makes clear that where one of the parties to a complaint before the Ombudsman subsequently commences proceedings in any Court, then any party to those proceedings may apply to the Court for an Order to formally staythe proceedings. It is a matter for the Court to make an order pursuant to Section 49 if it is satisfied that:-
“(i)there is no sufficient reason why the matter in respect of which the proceedings have been commenced, should not be investigated by the Ombudsman, and
(ii) the party that commenced the proceedings was at the time when the proceedings were commenced and still remains ready and willing to do all things necessary for the proper conduct of the investigation.
It is also notable that pursuant to Section 52 of the FSPO Act 2017:
“The Ombudsman may decline to investigate or may discontinue an investigation of, a complaint where in the opinion of the Ombudsman ... the subject matter of the complaint is of such a degree of complexity that the Courts are a more appropriate forum.”
The Ombudsman has informed me that these counterbalancing provisions within the governing legislation, recognise the statutory functions of the FSPO to impartially investigate complaints against financial service providers and pension providers, against the background of the overarching jurisdiction of the Courts. Together these statutory provisions ensure that any issues to be determined between a financial service provider and its customer, can be determined by one forum, being the one more suitable to the particular circumstances.