Central Bank and Financial Services Authority of Ireland (Amendment) Bill 2014: Second Stage [Private Members]

I move: "That the Bill be now read a Second Time."

Caithfidh mé a rá go bhfuil áthas orm a bheith ag cur an Bhille seo chun tosaigh, Bille atá scríofa agam ó bhí 2014 ann. Ba mhaith mo bhuíochas a ghabháil le Free Legal Advice Centres, FLAC, go háirithe Paul Joyce a bhí ag obair liom ar an mBille seo agus a rinne tuairisc in 2014 ar son FLAC dar dteideal Redressing the Imbalance. Léiríonn an tuairisc sin go soiléir na míbhuntáistí atá ann ó thaobh na rialacha nuair a bhíonn gnáthdhaoine ag déileáil le hinstitiúidí móra airgeadais.

I am very glad to move Second Stage of this Bill. It has been drafted since 2014 and deals with an issue I have raised with the Government on numerous occasions, that of the need to change certain sections of the Ombudsman Act which would allow with respect to products that were mis-sold to customers more than six years ago for redress to be able to be sought outside that timeframe. It is unfortunate we have not had redress of that issue up to now with the bringing forward of this Bill, although I acknowledge the Government issued a press release drawing attention to the heads of a Bill that would bring this provision into being whenever that Bill would be passed by both Houses of the Oireachtas.

I commend the work of the Free Legal Advice Centres, FLAC, and in particular Paul Joyce, in working on the 2014 FLAC report, Redressing the Imbalance. It is an excellent piece of work that shines a light on just how imbalanced and unfair many of the rules are and how much they are tilted in favour of the banks and financial institutions over the customers. That report made many recommendations. Some of them would need to be addressed at European level and others are matters of policy or regulation, whether it be for the Ombudsman or other institutions. The report also pointed out many actions we as Members of the Oireachtas could and should take to help level the playing field. In that spirit I was happy originally to publish this legislation in 2014 and to bring it to Second Stage today. I signalled from the start my willingness to engage with all parties and with the Government to make sure as many of that report's recommendations as possible are made part of the law of the land.

I thank the Financial Services Ombudsman for his and his office’s engagement with me on this Bill. He has given of his time, and he allowed his deputy to make his time available to me, and he also attended the briefing session we had yesterday. I also acknowledge that the Financial Services Ombudsman has in recent years started to live up to the potential of the office, which is now a valuable element of the consumer protection armoury of this State. I could probably not have said that a few years ago because the full potential of that office was not being reached. There has been a marked shift in recent times. It is right for people like me who have criticised that organisation in the past to acknowledge the improvements we are seeing.

To say the relationship between the Irish people and their banks during recent years has been fraught would be an understatement of massive proportions. We all know that the banks have cost the Irish people billions of euro and that they are still not playing the role in the economy they should be playing. That is largely a debate for another day but the fact remains, and is worth stating, that the banks’ behaviour caused an unprecedented crash exposing the weak foundations on which this economy was built. If we think back to that behaviour which came to the fore in 2008 and 2009, behaviour that is still being investigated by arms of this State today and rightly so, and applied the same rules that apply for individuals seeking redress for a breach of their rights from the same institutions, then under the current rules there would be no investigation. The doors would be shut because it happened more than six years ago.

That issue goes to the core aim of this measure. This Bill, if passed, would remove the blanket ban on a consumer seeking redress for a breach of his or her rights by a financial institution if that breach occurred more than six years ago. Instead the law would be changed so a consumer would have full access to the Financial Services Ombudsman and legal routes if he or she seeks redress within two years of becoming aware of the breach. This is not an academic argument but one of real concern. We all know of cases of people being sold endowment mortgages only to find out many years later that what they were promised never materialised. Losses of €30,000, €40,000 and up to €100,000 have been reported in the media in the past. We all know about the scandal associated with payment protection insurance. We also all know about individuals being moved from tracker rate mortgages onto variable rate mortgages against the terms and conditions of their original mortgages. If those products were sold more than six years ago, customers have no avenue to seek redress with respect to the mis-sold product from the financial institution.

As we speak, the Central Bank is supervising the main banks as they go through their records to see how many families and individuals were moved off tracker mortgages over the last number of years. Unless we bring in this change, many of those families could be left legally stranded - in the right but with no redress available to them because the product was sold to them more than six years ago. I hope all sides of this House can unite behind this issue and get it sorted once and for all. I acknowledge that the Minister in the Government's press release yesterday drew attention to the heads of a Bill, a section of which would deal with that area, and that is to be welcomed. It is appropriate to acknowledge that. The irony of it is that next week's lottery has selected a Bill drafted by Deputy Michael McGrath, which also seeks to achieve the same purposes. I believe this is an issue on which we are united. It is pity it has taken a number of years to progress this Bill and that it is more likely it will be enacted in 2017 as opposed to 2014, when it was originally drafted.

I wish briefly to go through a number of other changes. Section 2 seeks a redefinition of "consumer" so that it is in line with the consumer protection code and the Consumer Credit Act. As it currently stands, it has been argued that by defining a consumer as including a company with a turnover of less than €3 million, the possibility exists that the role of the Financial Services Ombudsman in standing up for the small individual might be diluted by larger groups using up many of the limited resources of the office. For example, the 2014 FLAC report advises of cases where the Commercial Court would have offered the more natural environment but the definition of consumer currently applying allowed a process such as in the Lyons case where businesses with loans of millions of euro were availing of the Financial Services Ombudsman process. That is not what that Financial Services Ombudsman is there for. I cite the example of a credit union that was given previously, which was perhaps given dodgy legal or financial advice, and which could apply to the Financial Services Ombudsman for redress. It is not supposed to be like that; rather it is supposed to be there for individual consumers. There may be a case, and this should be dealt with in greater detail on Committee Stage, for taking a longer-term view of whether a two-tiered approach for individuals and businesses may be envisaged.

Section 3 removes the words "in an informal manner" and "without regard to technicality and legal form".

I have engaged with the Financial Services Ombudsman about this on numerous occasions. I am aware that this section may be sharpened up on Committee Stage to achieve the desired aim of allowing the Financial Services Ombudsman to be open to all, on one hand, and to stand up to scrutiny in a formal legal setting, on the other. This deletion should not be interpreted as forcing the ombudsman to act in a more formal manner. We all know that the fact the ombudsman's office can act in an informal manner is one of its attractions. I encourage people to submit letters in their own words to the Financial Services Ombudsman. They do not have to be overly formal. It needs to be kept that way. Given the decisions that are being made, there has to be due regard to the legal form and technicality.

Section 4 is the meat and veg of this Bill. It is an amendment to the statute of limitations in these matters so that there will no longer be a blanket ban on complaints after six years have elapsed.

Section 5 seeks to make mediation the norm in disputes. Specifically, it tries to compel financial institutions to enter into mediation. It requests that where a financial institution refuses to enter into mediation it has to submit a valid or justifiable reason for not doing so to the Financial Services Ombudsman. It is appropriate to recognise the good work of the Financial Services Ombudsman's office. It is welcome that mediation has now become far more the norm and financial institutions have been persuaded more and more to engage in it. There is no guarantee it will continue to be the norm. For those who still do not engage in that form of mediation, we are saying that they need to give a reason why they have decided not to do so. It should be enshrined as the best way of solving disputes. The amendment would place pressure on banks and financial institutions to engage in mediation. I welcome that this is happening more often but current form is no guarantee of future behaviour.

Section 6 appears to be a technical section but is quite important. By allowing the Financial Services Ombudsman more scope to better report on his findings, we can give a more accurate picture. Currently the Financial Services Ombudsman must report cases as upheld, partly upheld and not upheld. There are three categories. Such a limited range of options can give misleading statistics. In many cases "partly upheld" was from a consumer's point of view a largely irrelevant finding that did not reflect how they felt. It was as if one was right on a technicality but wrong in the substance of one's complaint or appeal. If it was deemed partially upheld, it seemed as if it was a positive for the consumer when, in reality, it was largely negative. The solution for a better and more accurate understanding of how the results of the process are really panning out is to allow a wider range of reported findings. The finding of "substantially upheld" or "substantially rejected" should be added instead of the sometimes misleading finding of "partly upheld". This would have to be followed through on the amendment in 2013 that provided for the "name and shame" power the ombudsman now has.

Sections 7 and 8 are among the most important in the Bill. While I fully respect the autonomy and role of the Financial Services Ombudsman, the option for a citizen to access the courts must also be fully respected. In an ideal world, the Financial Services Ombudsman process would end in each case with satisfied parties accepting the decision. We do not live in an ideal world. We will never have that perfect situation and so we must always protect the right of all to access the courts system in a way that is affordable. That means allowing a right of appeal to the Circuit Court. Currently, the right of appeal is to the High Court and this has two effects. The first is that the costs are significantly higher than they would be in the Circuit Court, which means it is outside the reach of many consumers. Second, the appeal to the High Court can only be made on a matter of law as opposed to there being a full rehearing. Taken together, these two facts mean an appeal to the High Court is not a realistic option for many. Therefore, it closes the avenues of justice for many consumers. There are arguments as to why the current process protects the consumer but, as I have argued in other debates about the right to access the courts, the overriding principle must be that the consumer can, if he or she chooses, have his or her day in court. It should not be lost in the wider debate that the other element of this section is to extend the time a consumer or financial institution has to appeal to 60 days instead of the current 21. This is an important amendment which, like the other sections of the Bill, will empower the consumer and was one of the overarching goals of FLAC's 2014 report, to redress the imbalance and level the playing field for the small person. If one thinks about it, a person makes his or her complaint to the ombudsman in an informal manner. The ombudsman rules against him or her to the effect that he or she does not have a valid complaint but the person feels that it is valid. He or she must now to appeal to the High Court. We would like it changed to the Circuit Court. The person is given 21 days and in that time, he or she will have to decide if he or she should go to the Circuit Court and weigh up the options. Costs could be awarded against him or her. He or she would have to get legal representation. He or she would have to brief his or her legal representatives, who must then file the appeal. There is simply not enough time in that tight window. We are of the view that 60 days would be more appropriate.

I hope all parties and Independents can support the Bill. I have indicated there are sections in the Bill that will benefit from a full and open debate and I look forward to hearing the view of colleagues and Ministers. I have already acknowledged that similar proposals have come from Deputy Michael McGrath and that he has penned legislation on the matter. The Minister, Deputy Noonan, and Minister of State, Deputy Eoghan Murphy, highlighted yesterday in a press release that they will deal with this issue. I am aware there is legislation regarding the eventual amalgamation of the Pensions Ombudsman and the Financial Services Ombudsman. There is no date yet for that Bill and I see no reason why consumers should have to wait until then to have these issues dealt with. The whole purpose is to make sure that time cannot run out for many. It is crucial that we amend the statute of limitations. We have been out of synch with international norms for many years. It is three years since the Minister became aware of the mis-sold products issue. Hundreds and possibly thousands of people have been denied access to justice because of a very flawed piece of legislation a number of years ago. That can be redressed and hopefully it will be. This debate should act as an impetus for that.

I thank Deputy Pearse Doherty for his Private Members' Bill on the topic of the Financial Services Ombudsman. Unfortunately the Minister, Deputy Noonan, and the Minister of State, Deputy Eoghan Murphy, are unable to be here today so I am taking the debate on their behalf. They both understand the intention behind the Bill, which seeks to provide for the strengthening of the functions of the Financial Services Ombudsman, the consumer complaint procedure and related matters. While we support the intention behind the initiative overall, the provisions as set out do not necessarily achieve all of the aims. I will address the reasons for this in a moment.

As the Deputy has seen from the Government's legislative programme, we are progressing legislation to amalgamate the Financial Services Ombudsman and the Pensions Ombudsman and to consolidate and generally update the legislation. The Government decision to amalgamate both offices follows from the recommendation of the critical review under the public service reform plan. The Financial Services Ombudsman is a statutory officer who deals independently with unresolved complaints from consumers about their dealings with all regulated financial service providers. This role is to investigate complaints of financial loss due to maladministration and disputes of fact or law in occupational pension schemes, trust retirement annuity contracts and personal retirement savings accounts. The Pensions Ombudsman performs these functions independently and acts as an impartial adjudicator. The Pensions Ombudsman is funded by the Exchequer.

The detailed heads of a Bill relating to the amalgamation were recently submitted to the Committee on Finance, Public Expenditure and Reform, and Taoiseach by the Minister following a full analysis and consultations with relevant stakeholders. This is priority legislation for the Minister, Deputy Noonan. The most significant change in the draft heads of the Bill is the amendment of the time limit in which complaints can be made to the Ombudsman in respect of financial services.

Providing the necessary protection to the consumer over the longer term is paramount but needs to be achieved within the law and be able to operate practically. The design of the appropriate mechanisms to achieve this is complex as it involves a range of considerations, including the interface with the Statute of Limitations, existing consumer protection laws, complaints mechanisms and availability of records.

After significant consideration and consultation with several stakeholders, the Minister for Finance proposes to extend the time limits for complaints about certain long-term financial services to the same time limit that applies to pension products, namely, six years from date of the conduct complained of or three years from the date the complainant knew, or ought to have known, about the conduct. This greatly improves access to the ombudsman for consumers of long-term products who may not become aware of an issue until well after the original six years has passed.

For short-term financial services, the time limit for complaints to the ombudsman is unchanged at six years from the date of the conduct complained of. This approach was taken as it was considered to be a balance between the concerns of the consumer representatives to give consumers greater protection and those concerns of the industry about record-keeping and availability of documentation.

The draft Bill will provide that the power to appoint the ombudsman and deputy ombudsman for the financial services and pensions office will be the responsibility of the Government and the candidate should be appointed following a Public Appointments Service competition. The heads of the Bill will also provide for the addition of a deputy financial services and pensions ombudsman. The draft heads will harmonise the rules under which the financial services and pensions ombudsman can investigate a complaint and extends the strongest powers of the Financial Services Ombudsman and the Pensions Ombudsman to the new financial services and pensions ombudsman.

The heads of the Bill will require that the ombudsman implement measures to increase the understanding of complaints against financial and pension providers as well as the basis for decisions made by the ombudsman across pensions and financial services issues by issuing preliminary determinations, publishing anonymised determinations and case studies. The ombudsman will also be required to report in more detail information on all investigations, including those terminated and settled.

The heads of the Bill will remove the requirement for mediation in all investigations. The lack of engagement from institutions in the process can be a source of frustration for complainants. The draft legislation will strengthen the role of the ombudsman in promoting engagement in the mediation process and will continue to provide for mediation as a tool for the ombudsman in cases where he sees fit. Finally, the draft legislation will provide for carryover of and any necessary changes to the naming-and-shaming provisions for complaints against regulated financial services entities.

These measures have the potential to strengthen the functions of the Financial Services Ombudsman under the new body, the proposed financial services and pensions ombudsman, as well as improving the consumer complaints procedure and experience for consumers of both pensions and financial services.

I will now address each of the main sections proposed by Deputy Pearse Doherty in the Central Bank and Financial Services Authority of Ireland (Amendment) Bill 2014.

Section 2 proposes to bring the definition of "consumer" in line with the version used in both the consumer protection code and in the Consumer Credit Act. The Deputy's intention is to bring the definition of "consumer" in line with versions used elsewhere, but I note that the proposed definition excludes unincorporated bodies. This may have the unintended consequences of narrowing the definition to exclude small businesses, sole traders, and bodies such as charities. The recast definition of "consumer" in the heads of the Bill prepared by the Minister for Finance, Deputy Noonan, will provide for the personal consumer and commercial consumer, as proposed by Deputy Pearse Doherty, and for unincorporated bodies, such as charities. This is the most appropriate definition to use.

Section 3 removes the requirement for the ombudsman to act in an informal manner and deletes the words "without regard to technicality and legal form". These deletions are designed by Deputy Doherty to reflect the fact that many complaints involve the alleged breaches of statutory rules. The provisions outlining that the ombudsman need not have regard to technicality or legal form is considered by the ombudsman to be a valuable and fundamentally important provision upon which reliance can be placed, while the ombudsman nevertheless complies with the requirements of natural justice. Additionally, it is noted that the phrase in question has never prevented the ombudsman from technical or legal argument when the need arises. After extensive review, the Minister's own draft legislation makes minor changes to this provision with the addition of the term "undue" into the phrase "without regard to technicality and legal form". It is hoped this change will continue to allow for the informality, while also acknowledging that such formality is to be bounded by an appreciation for due process and fair procedures.

Section 4 provides for a two-year extension of time to make complaints to the Financial Services Ombudsman in respect of the conduct of regulated financial service providers. I have already mentioned comparable provisions in the Minister's draft legislation earlier. It is proposed in the Minister's heads of the Bill to expand the broader time limits currently applicable for complaints for pension products to long-term financial service. The rationale for this expansion is that, for those who have long-term financial services, they may not become aware of an event to be complained of until their service matures, such as with endowment mortgages, and should have some access to the Financial Services Ombudsman.

Section 5 seeks to put greater pressure on the financial service provider to engage in the mediation process. We agree the existing provisions for mediation can be improved. The Minister's heads of the Bill will provide for the proactive approach of the ombudsman to encourage participation. In addition to this, I note Deputy Pearse Doherty's Bill was published at a time when the use of mediation in the Financial Services Ombudsman was less than 1% of all cases. I am informed by the ombudsman that, following a significant strategic and organisational change programme with the specific objective of putting mediation at the centre of the its procedures, a minimum of 60% of cases will be resolved in the future by dispute resolution using mediation techniques.

Section 6 allows for a greater range of findings on completion of an investigation. Currently the possible findings are limited to substantiated, not substantiated and partially substantiated. The Bill allows for findings of upheld, substantially upheld, substantially rejected or rejected. Transparency and better reporting aims may be at the source of the amendment. We support the intention behind this provision. Any change to the determination categories would need to operate harmoniously with the name-and-shame provision to be effective in increasing transparency. As currently drafted, it could operate to limit the name-and-shame provisions. This proposal would benefit from further consideration by the Attorney General's office.

Other steps have been taken in the comprehensive set of heads drafted by the Minister for Finance, including the introduction of preliminary determinations, more detail and publication of all determinations for financial services complaints, as well as more transparent information in the annual report on all investigations, including those terminated and settled.

Sections 7 and 8 allow for an appeal of the determination to be taken to the Circuit Court rather than the High Court, with subsequent appeals to the High Court. This would be a full rehearing of the complaint, and a period of 60 days should be allowed for this appeal to be lodged, as the Deputy said. The purpose of the ombudsman is to be a free alternative to the courts system for consumers. The intention behind section 7 may be to improve consumer protection by offering a de novo appeal in the Circuit Court to avoid the expense of the High Court, namely, the expense for consumers, but we have some concerns. A de novo appeal to the Circuit Court would involve the Ombudsman as a notice party only. This would mean that if the financial services provider appealed a decision that favoured the complainant, the complainant would have to defend the appeal in the Circuit Court, with all of the consequent or attendant expense. The provider is in a considerably stronger position, in terms of finances and resources, both to go to the Circuit Court and to succeed owing to the lack of inquisitorial powers of the Circuit Court.

In the existing statutory appeal to the High Court, the complainant is shielded by the high threshold that is applied to the statutory appeal and by the fact that the Financial Services Ombudsman can be a party to the complaint and thus take the role of defending its own decision. Neither of these factors operates in a Circuit Court de novo appeal so the real effect is not only that the provider is in a stronger position on a case-by-case basis but also that the existence of the threat of an appeal by the provider operates as a deterrent to consumers generally. In addition, in a High Court appeal, the ombudsman can defend his decision as a party to the statutory appeal. This has the effect of protecting the consumer from the costs or threat of costs of a High Court appeal made by the provider. Furthermore a re-hearing could allow for a situation where people use the ombudsman as the first step in litigation before inevitably going before the courts and taking their case again to the courts if unsuccessful. This could result in a floodgate scenario for the office, which would have implications for staffing and the effectiveness of the office to process and determine complaints. Time limits for appeals should be within such limits as the relevant court determines. This issue seems to be one that could be teased out in much more detail on Committee Stage.

We do not oppose this Bill because we recognise the need to extend the time limits and make other improvements to the existing legislation. We look forward to debating these issues and any differences that may arise at pre-legislative scrutiny stage or during the passage of the legislation through the Oireachtas. I therefore commend this decision to the House.

On behalf of Fianna Fáil, I very much welcome the opportunity to speak on this Private Members' Bill. Fianna Fáil will be supporting its passage on Second Stage. It is a little like the buses in that one must wait a long time for one, only to have three come pretty much at the same time. We have the heads of the Government Bill, Deputy Pearse Doherty's Bill and, as he has indicated, the Fianna Fáil Bill. The latter, which focuses on the six-year rule, has been selected in the lottery to be taken in two weeks' time. Our Bill is narrower in scope than Deputy Pearse Doherty's because it predates the FLAC report, which was issued in 2014. Our Bill was published in 2013. Therefore, the scope of Deputy Pearse Doherty's Bill is wider and it deals with a number of amendments suggested as part of the FLAC report.

Along with Deputy Pearse Doherty, I commend FLAC on the work it has done, not just in this area but also in so many others. The report it has published has provided the template for badly needed reforms. While a number of other important elements have been identified in the Sinn Féin Bill, the key issue is the time limit within which complaints can be made. The current position is indefensible and many consumers of financial products are being denied justice and access to a proper complaints mechanism. That has been highlighted in so many different examples. The Central Bank's investigation into payment protection insurance policies reveals that €67 million was paid out by way of refunds and compensation to 77,000 customers. However, it could go back only so far - to 2007, I believe - because of the six-year rule. It begs the question as to how many tens of thousands of other customers who may have been mis-sold payment protection policies, whole-of-life insurance policies and endowment mortgages do not have recourse to the ombudsman. It is a source of regret that this issue was not dealt with before now. We will have to take a mature decision collectively on how to make progress on the issue legislatively. There is no point in having three Bills before the Oireachtas finance committee. That decision can be made in due course but the most important point is that the matter needs to be dealt with.

There are so many examples in respect of which it is alleged that there was serious and systematic mis-selling of products. An example is in the area of life loans, which matter I raised previously. Last year, a constituent came to me and highlighted his own quite remarkable story. He was enticed by a bank to release €68,000 of equity in his home in 2002, with a fixed rate of interest of 6.77% for a 15-year period. The amount he owed climbed rapidly. After five years, the liability was €95,000, having started out at €68,000. After ten years, it was €133,000, and after 15 years the initial loan of €68,000 had risen to €186,000. After a prolonged battle during which the bank said early repayment of the loan would involve financial penalties, it eventually agreed to start accepting repayments from the customer, who was so concerned about how the value of the loan was increasing. That customer was adamant that the escalation in the amount owed was not properly explained at all when the product was sold by the bank. This is but one example among many involving people who have not had the opportunity until now of taking a case to the Financial Services Ombudsman.

Another example concerns whole-of-life insurance policies. My colleague, Senator Ned O'Sullivan, has raised this in the Seanad on a number of occasions. Many complaints on whole-of-life insurance policies have been taken to the ombudsman. For example, there were 104 complaints in 2013, of which the ombudsman upheld 31 in full or in part. Many more cases simply never made it that far because of the deterrent of the six-year rule.

Let me give an indication of the number of cases that could have been dealt with. Approximately 1,000 complaints per year, or 12% of the annual number received by the ombudsman, fall outside the six-year period. These are the cases in which the consumer actually brings the complaint, despite not being within the six-year period. Of course, many multiples of this number do not take the issue that far because there simply is no recourse. Other examples include the various equity release products that were all the rage during the so-called Celtic tiger years.

Mis-selling is particularly difficult to prove. I refer to proving the level of engagement between the financial services provider and the consumer. The ombudsman is equipped to make these calls, carry out the investigations and arrive at a conclusion in respect of each case.

I welcome a number of the other measures in the Sinn Féin Bill, including on the definition of "consumer", the reference to the informal manner and the ombudsman acting without regard to technicality or legal form. The mediation process needs to be reformed.

The range of potential findings that are open to the ombudsman must be expanded and there are changes proposed to the appeals process. It is clear from the Minister of State's reply that the Government has considered all the issues in detail in respect of the heads of the Bill. They will be the subject of considerable discussion, debate and amendment on Committee Stage. The various parties must make a decision as to what is the most expeditious way of dealing with this issue. There is no point in clogging up the finance committee with three Bills that are essentially around the same purpose. That is for another day.

We welcome Sinn Féin's legislation and will support it. Hopefully it will not go to a vote. We welcome the Government's publication of the heads of the Bill to amalgamate the Financial Services Ombudsman and the Pensions Ombudsman and to deal with some of the issues set out in the FLAC report. Fianna Fáil is committed to doing whatever we can to ensure these changes are enacted as quickly as possible in whatever form it is done. We are open-minded on the issue.

A member of the Government or Minister of State may speak twice and is entitled to make a contribution not exceeding five minutes. If there are no other contributors, I call on the Minister of State, who has five minutes, followed by Deputy Pearse Doherty, who has ten minutes.

I concur with both speakers and add my thanks to FLAC and the ombudsmen for the work they do. All of us have significant engagement with them and they do great work on the ground. The Government fully supports the intention behind the Bill. The Minister for Finance strongly supports the intention, and his legislation to consolidate and update the role of the ombudsman is a priority on the Government's legislative programme. There has been an extensive consultation process which has included a regulatory impact analysis, a public consultation, meetings with consumer and industry representatives and engagement with key stakeholders. Consideration has been given to a very broad range of issues.

Many of the issues covered by Deputy Pearse Doherty's Private Members' Bill being discussed today are provided for in some fashion in the draft heads of the Bill which have been published. The heads of the Bill are, perhaps, more comprehensive in some ways. They cover many more issues related to the Financial Services Ombudsman and the Pensions Ombudsman under one unitary structure to be known as the financial services and pensions ombudsman. Some proposals may go further than those suggested by Deputy Pearse Doherty, for example, the question as to whether the change to time limits for complaints will be retrospective. The draft heads do not provide for any commencement date of the legislation as of yet. The appropriate commencement date for particular provisions, such as the extension of a time limit for complaints to the ombudsman, is a matter that must be considered very carefully and fully during the legislative process, especially during the pre-legislative scrutiny. The appropriate commencement date must be carefully considered during the course of the drafting of the Bill in very close consultation with the Office of the Parliamentary Counsel and the Office of the Attorney General.

The definition of "consumer" as set out in the Minister's draft heads of Bill includes a person or group of persons, that is, a natural person, sole trader, club or charity and incorporated bodies with a turnover of €3 million or less. It seems this definition is broader than the definition in the Private Members' Bill, which is limited to natural persons and incorporated bodies. The date of knowledge test proposed does not provide for the possibility of commencement or the limitation period from the date the consumer ought to have become aware of the conduct complained of. The Bill refers to becoming aware of the consequences of the conduct. This would be a further departure from the limitation period as currently formulated for complaints to the Pensions Ombudsman, which refers to the knowledge of the act as opposed to the consequences.

The recent changes to the Pensions Act has enabled the appointment of the Financial Services Ombudsman, Ger Deering, as Pensions Ombudsman following the retirement of Paul Kenny. The appointment was made pending the passing of legislation by the Minister for Finance to merge the two offices. We are happy to consider further proposals during the legislative process when a more comprehensive set of heads of the Bill should be debated. We are not opposing the Private Members' Bill. As Deputy Michael McGrath said, three Bills have come together and the Minister suggests the issues should be debated further during the passage of the Minister's detailed and comprehensive heads of Bill, including any pre-legislative scrutiny. It is a matter for discussion and it is welcome that there is a shared ambition as to where we wish to end up. I thank Deputy Pearse Doherty and apologise for my congested delivery. Winter is coming.

Ba mhaith liom mo bhuíochas a chur in iúl don Aire Stáit, Teachta Dara Murphy. Is é sin b'fhéidir an chéad uair a dúirt mé na focail sin. Cuirim mo bhuíochas in iúl dó agus don Teachta Micheál McGrath as ucht tacaíochta a thabhairt don Bhille seo. Tá a fhios agam go bhfuil an tAire Stáit, Teachta Murphy, ag déanamh ionadaíochta ar son an Aire, Teachta Noonan. Ba mhaith liom feasta mo bhuíochas a chuir in iúl don Aire, Teachta Noonan, agus don Aire Stáit, Teachta Eoghan Murphy.

The Minister, Deputy Michael Noonan, and the Minister of State, Deputy Eoghan Murphy, in preparation of the heads of their Bill, have very much considered the legislation I drafted in 2014. When I went through the sections, I flagged some of the areas that would need further scrutiny. We were aware that charities and sole traders would need to be encompassed in the legislation. The spirit of it was to have the issue on commercial and ordinary people separate and it has been achieved in terms of what the heads of the Bill suggest. We will examine it more closely.

In all the sections suggested here, while there may be some minor differences from what the Government proposes, probably the area which is most contentious is in relation to the High Court and the Circuit Court. We have been dealing with the Financial Ombudsman about this and I signalled that it would need a proper and thorough debate. I am familiar with the fact that under the previous Government there has been a trend to move from the Circuit Court to the High Court. We have seen it in other matters, such as the fact that the Revenue Commissioners' appeal is to the High Court rather than the Circuit Court. It is a trend.

The Minister makes valid points, and I have heard them from the ombudsman regarding the difficulty if financial institutions try to frustrate the process by appealing, or threatening to appeal, to the High Court and having the costs awarded against the consumer. The intention is that the Financial Services Ombudsman would be represented there. However, the Minister did not talk about what happens if a consumer has to take the Financial Services Ombudsman to court. This is where there is a difference in how we would sort it out. It has happened, and consumers have won. It is not a case that it is some type of scenario that may not be envisaged or that is so far out there that it is unlikely to happen. We are all human. We all make mistakes despite our best efforts.

Someone would need to be willing to risk going to the High Court, have the financial means to do so and be well up on his or her own case, given the limited window of 21 days. We need further discussion on how to protect the consumer. The Minister of State referred to a common purpose in trying to strengthen consumer protection, but there is quite a bit of difference.

This legislation was drafted in 2014. We have drafted an amended Bill but, before we could add it, the version before the House was selected in the lottery. We were going to bring a number of amendments to Committee Stage in the new legislation, which is sitting on my desk, to deal with charities, corporate bodies, the nuanced position regarding the undue regard to formal and legal technicalities, and the "name and shame" provision, which I had signalled. It is broadly accepted that we need a wider, truer classification concerning how cases are dealt with or not.

The Financial Services Ombudsman's office reports that one of the most frustrating types of complaint it receives comes from people who have been locked out of the process. The figure in this regard is approximately 1,000 per year. Far more affected people are out there, but they have Googled the process and know that they cannot do anything after six years. This Bill opens the doors of justice to the thousands of consumers who allege that they have been badly served by financial institutions. There is no doubt that a proportion of them, and quite possibly a large proportion, have been fleeced.

We all agree that we need to get rid of this provision, and it is a pity that this did not happen a couple of years ago. It should have, but that is in the past and we are moving into 2017. Hopefully, this will be sorted by then. We must figure out what to do with the people who were sold the products in question previously. We mentioned endowment mortgages, a considerable number of which were sold in one period. Consider someone who was sold an endowment mortgage in 1989 or 1990 and a next-door neighbour who was sold one in the same year, possibly even on the same day. The first person realises in March of next year that he or she has been hard done by, meaning that he or she can access the Financial Services Ombudsman, but is it the case that the neighbour, who realised four years ago, cannot access the Financial Services Ombudsman?

There are issues that we must address. This will take a great deal of time, we will need the Attorney General's advice and we will need to work in an open and frank way. We must ensure that we support as many individuals as possible. We all know about some of the recklessness that occurred in financial institutions. I am not referring to just the banks in this regard because we also saw such behaviour in the insurance industry. Ireland was referred to as "the wild west" but that phrase was coined about insurance, not banking.

I welcome the fact that the Government is not opposing the Bill and I also welcome Deputy Michael McGrath's support for it. I acknowledge that his Bill deals specifically with the six-year rule, but ours goes much further. A number of aspects need to be considered and accepted. In fairness, the Government has done that, which is welcome, and I am glad to have the opportunity to do so eventually. It is crucial that we progress.

This is my Bill and it will move to Committee Stage. However, the heads of other legislation were published yesterday. I am glad that my Bill has acted as a prompt to that. I will do whatever I can in the finance committee to ensure that pre-legislative scrutiny takes place as quickly as possible because the legislation in question is wider in scope than mine, although it also deals with the issue that is at the core of this Bill, namely, consumer protection. That provision needs to become Irish law sooner rather than later.

Question put and agreed to.