Govt proposes to cut long-stop to 10 years
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The Ministry of Justice is consulting on changes to the Limitation Act that will see the 15-year long stop shortened to 10 years, prompting IFAs to question why they do not benefit along with other industries.
An MoJ spokeswoman says the change is part of the Civil Law Reform Bill, due to be published this year, which may also include a three-year limit on complaints from the date a problem is identified.
Panacea IFA chief executive Derek Bradley says: “Buying a home is supposedly the biggest financial commitment one undertakes. Under these proposals, we have the possibility that the builder walks free after a minimum three-year and maximum 10-year period, yet the IFA who arranged the mort- gage remains liable forever. Some joined-up thinking is needed. This should create a level playing field for all against any stale claims.”
Highclere Financial Services partner Alan Lakey says: “This is only going to widen the imbalance between financial services and other industries and the FSA should reconsider its stance in light of these proposals.” He says the Ministry of Justice might be an avenue for further debate of the issue after the joint committee on human rights dropped its investigation into the long stop.
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Readers' comments (6)
Peter Duffy | 28 Oct 2009 11:47 am
In the words of the once great John Lydon, "ever get the feeling you've been cheated ?".
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Anonymous | 28 Oct 2009 12:11 pm
I would argue that defects made by builders could take longer to discover than 10 years, but you would reasonably expect any mistakes made on the mortgage to be discovered in a shorter period than this.
I guess we have endowments to blame for the unlimited amount of time for complaints to be raised, as some people have only realised they have been mis-sold endowments at the end of their mortgage term and raise the complaint then.
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Julian Stevens | 28 Oct 2009 12:55 pm
There is, of course, the distinct possibility that even if the longstop is shortened to 10 years, the FSA will still hold out for it to be denied to IFA's on the crackpot grounds that if we were to be allowed this protection of English Law, the public would, by some strange and unfathomable quirk of reasoning, be discouraged from investing for their retirement. What a load of utterly mendacious tripe.
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Alan Lakey | 28 Oct 2009 2:23 pm
Peter is right - it's rotten
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Phil Castle | 29 Oct 2009 8:17 am
For all my arguing about the fact we should NOT have infinite liability I find myself likely to be arguing on behalf of my clients that the longstop for every other profession should NOT be reduced to 10 years and nor should the timebar be reduced from 6 to 3 years.
I don't know about you, but I can think of loads of reasons why people might not realise they've got a problem until after 10 years in ALL walks of life and the House of Lords struck a fair balance first time round when they said 15 years.
I think we need to be putting pressure on the ministry of justice NOW not to reduce the longstop to 10 years and for them to do a proepr review and apply that same justice to US i.e. 15 years from last seeking advice, NOT sale of the product which I think was what the law implies anyway i.e. it is not a longstop on the producy, it is on the service BOTH parties committed to, so if a client keeps paying for advice on the contract (that is NOT trail commission which is different), then 15 years all the time both parties confirm advice is being paid for which was what the Client Agreement and Terms of Business we drafted (and the FSA threatened us over without even reading) was trying to achieve..
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Les Clark | 4 Nov 2009 10:46 am
A mainstay in the concept of the Rule of Law is that, in the absence of overwhelming reasons to the contrary, the Law applies equally to all subjects. It is difficult to see any overwhelming reason why IFAs should be subject to a limitation rule different from that which applies to others.
As a further erosion of the Rule of Law and shift to arbitrary decree, this issue has constitutional as well as professional significance.
The wider public needs to realise this.
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