Dáil Éireann Debate, Thursday - 28 February 2019
10. Deputy Pearse Doherty asked the Minister for Finance his views on whether sections 44(2) and 50(3) of the Financial Services and Pensions Ombudsman Act 2017 are in need of amending (details supplied). [9848/19]
Amharc ar fhreagraThis question concerns the amendment and revision of section 44(2) and section 50(3) of the Financial Services and Pensions Ombudsman Act 2017. I am concerned about the interpretation of this Act which means that any court proceedings at all involving a consumer is enough for the ombudsman's office to wash its hands of the complaint. I know of a case where proceedings were struck out by the court. Those proceedings were not related to the specific complaint made to the Financial Services and Pensions Ombudsman, but the office could not investigate the claim because of the interpretation of the Act. There is a need for this Act to be amended.
I thank the Deputy for bring this matter to my attention and the attention of the House. One of the functions of the Financial Services and Pensions Ombudsman is that he may advise and, as appropriate, make recommendations to the Government in respect of any proposed legislative changes concerning financial services or pensions.
I sought the ombudsman’s observations on section 44(2) and section 50(3) and he has not identified any difficulty with the operation of either section. Section 44(2) of the Act, among other things, prescribes that a complainant may not make a complaint to the Financial Services and Pensions Ombudsman, FSPO, where the conduct giving rise to the complaint is or has been the subject of legal proceedings before a court or tribunal. I need to stress that it is the conduct giving rise to the complaint that is referred to here. This is considered to be the right approach, as it would not be appropriate for the FSPO to become involved in an issue which has already been, or still remains, before the courts.
The FSPO provides an avenue for resolution of complaints about the conduct of financial service providers or pension providers as an alternative to the courts. It cannot undertake investigations in parallel to an issue which is being litigated or has been litigated before the courts. Subsections (1) and (2) of section 50 provide a counterbalance to this restriction. These allow the ombudsman to investigate a case where he believes the provider has initiated legal proceedings to frustrate an investigation. Section 50(3) prescribes 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".
I do not accept the ombudsman's position. I find it quite surprising. I have worked with that office and I have introduced and passed legislation that impacts on that office. I am referring to a situation where a consumer has taken a complaint to the ombudsman. The complaint concerns payment protection insurance, PPI, and completely different from what was before the courts. What was before the courts was also struck out. It was not adjudicated upon. In response to the complainant, the ombudsman stated that although it noted the proceedings were struck out, nevertheless it took the position that the matter had been subject to legal proceedings. The PPI issue was not subject to legal proceedings and was not part of that case. An issue concerning this individual's mortgage was before the court, and because of that it was deemed, under these sections of the Act, that the PPI issue was before the courts. That was the case even though the PPI issue was never adjudicated upon. It was simply struck out. It is unacceptable that where the courts have not ruled on the substance of an issue, the Financial Services and Pensions Ombudsman is locked out from engaging with the complainant.
Given the work the Deputy has done with the office of the Financial Services and Pensions Ombudsman, I hope he is aware, and I am sure he is, of how seriously that office takes its responsibilities and the important work it does in this area. The office has indicated to me that it does not believe there is a need for this change to the Act. All I have in the details supplied as part of this question is information on the policy issue as opposed to the particular case referred to by Deputy Doherty. If the Deputy, however, would be willing to share with me the specific details of the case, I will be happy to raise it with the Financial Services and Pensions Ombudsman and get a more detailed answer for him. From the work I have done with the ombudsman, and what that office has shared with me regarding how it does its work, I think it gets the balance right on the vindication of the rights of consumers and citizens. If the Deputy believes the office of the Financial Services and Pensions Ombudsman is being frustrated in its work in not following up on an issue that the Deputy takes seriously, I would be surprised by that and I will be happy to investigate the matter further for him.
I appreciate that and I will take up that offer from the Minister. This is a serious issue and not an isolated one. It is part of a broader concern. We are familiar with this legislation. I believe it was pushed, to a certain extent, to catch up with my own legislation at the time. It may have been slightly rushed. I think there is an issue with what is in the Act. Let us look, however, at the case and see how that applies. I am also conscious that the ombudsman’s office is under significant pressure. I hope it has the resources to help it deal with the cases before it. We learned last week, through a parliamentary question, that it has 1,200 tracker mortgage cases to deal with. About half of those cases are live and the other half are awaiting the outcome of an independent appeals process. That will put a huge burden on the office of the Financial Services and Pensions Ombudsman, given the number of cases to be dealt with at one time. I will give the details of this case to the Minister. If this is going to be the approach of the ombudsman’s office to cases, then I am concerned. Legitimate claims to the Financial Services and Pensions Ombudsman may be frustrated.
I have three points in response. Regarding the resources available to the office of the Financial Services and Pensions Ombudsman, I recently visited its new facilities located around the corner from the Houses of the Oireachtas. Those new facilities allow the ombudsman’s office to meet citizens and follow up on issues raised. It will also be possible for the Financial Services and Pensions Ombudsman to be involved in mediation on important issues brought to the office.
Turning to the substantive issue raised by the Deputy, it is not unusual for the ombudsman, and similar bodies, to state that it will not adjudicate on issues that are either in the courts or have been dealt with by the courts. That is because one of the roles of the Financial Services and Pensions Ombudsman is to try to provide alternative ways to resolve issues apart from having to go to court.
Third, as I have said, if the Deputy will give me the details, as he has said he will do, I will follow up on the matter. In my engagement with the ombudsman's office, I have found that it takes and discharges its responsibilities very seriously. I discussed with the ombudsman's office the specific consequences that may affect the organisation in trying to deal with the tracker mortgage issue.
