"As always, you are so bloomin' impressive. It's lucky, as they said about Sherlock Holmes, that you did not decide to go to the bad."
Neasa McErlean

"Consumer Complaints and Compensation: A Guide to the Financial Services Market" City & Financial

"Consumer Complaints and Compensation: A Guide to the Financial Services Market" City & Financial

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Consumer financial services complaints and compensation, 2nd edition, came out in the last week of July. To learn how to buy the only book on consumer financial services complaints in the UK, click here.

The FCA managed to publish its final rules for MiFID cases as the book was at the printers. The rule changes are nominal and largely unhelpful with the regulator deciding to create a whole new DISP 1.1A to cope with this subject.


The FCA?s PS 17/3 lays down final rules for dealing with the Plevin mess surrounding payment protection insurance misselling.Where lenders added PPI insurance premiums to their loans and failed to disclose the commission and profit share amounts that they and others would be receiving totalling over 50% of the premium, the Plevin case would probably have awarded customers full amount of any undisclosed commission. The FCA instead requires lenders essentially to repay the amounts above 50% but only where nobody has awarded any sort of compensation for selling the wrong policy. Claims payments must be ignored here and refunds only deducted to the extent that they relate to commissions and profit share above the 50% limit. Loan interest is added to this figures until repayment and then interest at 8% to payment is put onto the total. The regulator still refuses to make all commission disclosure compulsory which should be done to avoid claims for returns of such amounts when paid to anyone that is not exclusively an agent of the provider under the Hurstanger rule.

In the Aviva case, Mr Justice Jay continued the fallacy that the Financial Ombudsman Service has to explain why it is not applying the law. This is not in the Financial Services and Markets Act and derives from obiter remarks in the Court of Appeal in HME and now Aviva. The Court, though, refused to rule that the Ombudsman could not reasonably reach the result she came to, remitting the whole complaint to FOS for re-examination by a different Ombudsman. This correctly left open the option for FOS to uphold a different complaint in the case, namely that a mentally ill policyholder cannot give an effective consent to surrender a life policy even when his estranged wife of sound mind did give such a consent.

In Full Circle, Mr Justice Nichol, rightly rejected the argument that FOS was bound by the findings of the FCA in enforcement proceedings or any other sort of investigation. He rejected the argument that a medium-risk fund is automatically suitable for a medium-risk client. Recommendations have to match customers? wishes and needs in a wide variety of ways.


Readers might find this decision interesting. It’s an “ordinary tale” of Soho life.

An English High Court Judge has criticised the inclusion in the non-waivable red list of the IBA Guidelines on Conflicts of Interest for arbitrators of situations where the arbitrator’s law firm earns significant revenue from a party’s affiliate. In re W, Mr Justice Knowles refused to set aside the resulting arbitration award. He concluded that there could not be justifiable doubts about the independence of a semi-detached partner of the firm who was totally unaware of the post-appointment merger of his firm’s big client with an affiliate of the party to the arbitration.

Mr Justice Hamblen removed an arbitrator for failing to disclose multiple arbitrator appointments involving a party either as a litigant or a claims handler made through appointing organizations in Cofely v. Bingham. The arbitrator might have been better advised to have followed the Chartered Institute of Arbitrators 2011 Guidelines on handling court applications, rather than attempting to cross-examine counsel asking about his prior appointments.

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