New Act makes changes to FSPO complaints process

The Financial Services and Pensions Ombudsman (Amendment) Act 2025 (the Act) was signed into law by the President today. The Act is expected to be published in the coming weeks and is subject to commencement orders.

Once commenced the Act will amend the Financial Services and Pensions Ombudsman Act, 2017 including:

• to ensure that the Financial Services and Pensions Ombudsman (FSPO) can continue to carry out its statutory functions in accordance with the Constitution the Supreme Court judgment in Zalewski
• to clarify the definition of ‘financial services provider’ in respect of providers that have exited the Irish market
• to make a number of other administrative amendments

Exercise of quasi-judicial functions

The legislation was introduced primarily to give effect to the 2021 Supreme Court judgment in Zalewski -v- Adjudication Office & ors [2021] IESC 24 and thereby ensure that the FSPO can continue to carry out its statutory functions in accordance with the Constitution.  

In Zalewski,  the Supreme Court examined the constitutionality of the quasi-judicial adjudication process conducted by the Workplace Relations Commission. The Supreme Court held that the adjudication process was permissible under Article 37 as it could be considered “limited functions and powers of a judicial nature.” However, the Supreme Court identified procedural deficiencies in the Workplace Relations Act 2015 that it found to be inconsistent with the Constitution including:

• the blanket prohibition on public hearings
• the absence of provision for the administration of an oath or cross-examination
• the absence of any possibility of punishment for giving false evidence

The Supreme Court noted that the standard of justice administered under Article 37 cannot be lower or less demanding than the justice administered in courts under Article 34 and therefore mandated certain procedural safeguards required to ensure compliance with constitutional standards. See our previous insight for further detail on the Zalewski ruling.

Following the Zalewski decision, the FSPO engaged with the Department of Finance regarding any legislative amendments required to develop the processes and procedures of the FSPO to address any potential challenge similar in nature to the constitutional issues raised in Zalewski.

Once commenced, the Act will make the following key amendments to the Financial Services and Pensions Ombudsman Act, 2017 (the Principal Act) to reflect the findings in Zalewski:

• Examination of Witnesses – Amendment to allow for witnesses to be cross-examined on oath or affirmation.
• Conduct of Investigation – New sub-section inserted to provide for the Ombudsman to decide, on their own motion or on application by or on behalf of a party to a complaint, and having consulted with the parties to the complaint and having considered the nature or circumstances of the complaint and whether it is in the interests of justice to do so, whether an oral hearing should be conducted in public.
• Mediation – New sub-section inserted stipulating that mediations shall be conducted in private. This amendment seeks to ensure that mediation will not be impacted by the provision allowing for oral hearings to be conducted in public.
• Obstruction of work of Ombudsman – Amendment to include the following within the scope of the ‘obstruction’ offence for: (i) the refusal to be examined or cross-examined on oath or affirmation; and (ii) giving evidence on oath or affirmation that is false or known to be false.
• Decisions of the Ombudsman – Amendment allowing the Ombudsman to identify the parties when publishing decisions, case studies or reports if an oral hearing was conducted in public as part of the investigation.

Financial Service Provider

The Act includes consumer focussed changes to the definition of ‘financial service provider’ which:

• Clarify that customers of financial service providers that have departed the Irish market can continue to access the existing services and consumer protections offered by the FSPO
• Address the position of mortgage holders whose loans had been sold prior to 2015 and between 2015 and 2018

 The Act also provides for matters including:

• the appointment of more than one person to act as Ombudsman
• the making of Regulations by the Minister for Finance which would require certain classes of financial service provider or pension provider to establish internal dispute resolution procedures for dealing with complaints, and to publish their internal dispute resolution procedures
• an amendment to the calculation of expenses incurred by the FSPO
• cooperation with the Credit Reviewer (as defined in the Guidelines issued under the NAMA Act 2009)

Comment

On the passing of the Bill, Minister for Finance Paschal Donohoe commented that the new act “…will significantly improve the consumer protection framework in Ireland." Consumer protection and the Central Bank’s recently launched revised Consumer Protection Code featured in debates during the legislative process.

The amendments giving effect to Zalewski introduce welcome clarity for both consumers and financial services providers and minimise the risk that decisions made by the FSPO will be subject to challenges similar to that brought in Zalewski.  

For more information, and how ALG can assist your business, please contact Dario Dagostino, Partner, Patrick Brandt, Partner, Mark Devane, Partner, Chloe Culleton, Partner,  Laura Mulleady, Partner, Sinéad Lynch, Partner, Laura Corrigan, Senior Associate, Sinéad Hayes, Knowledge Consultant, Sarah Lee, Senior Knowledge Lawyer, or your usual ALG contact.

Date published: 15 April 2025