Barristers warn Myners that Financial Services Bill may breach rule of law
Share
Two financial services lawyers have written to City minister Lord Myners warning that some new FSA powers proposed under the Financial Services Bill could breach the rule of law.
4 Pump Court barrister Peter Hamilton and financial services lawyer Anthony Speaight QC today wrote to Myners on concerns over proposals to give the FSA power to impose a penalty on a person who has “at any time” performed a controlled function without approval.
Hamilton and Speaight, who also wrote to Lord Hunt of Wirral and Lord Newby, say the term “at any time” gives the new provision retrospective force, which goes against the rule of law.
Speaight and Hamilton also highlighted concerns with consumer redress proposals, giving the FSA power to decide whether a firm has been guilty of failing to comply with the FSA’s rule-book.
The regulator would also define the rules of the consumer protection scheme and define how any redress is to be calculated under the proposals.
Hamilton says this puts the FSA in the position of “both prosecutor and judge, with wide discretion”.
He says: “We respectfully submit that there ought to be a requirement that the FSA should have to apply to a court for the court’s approval of the proposed [consumer redress] scheme, and the firm should have the right to be heard. The court should have power to order amendments to the scheme, or indeed, to refuse the FSA’s application altogether.”
The Lords’ amendments to the bill are due to be considered in the Commons this week and the bill will have to be finalised by Monday, April 12 when Parliament is dissolved.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
Readers' comments (2)
LOL | 7 Apr 2010 6:09 pm
Since when did the fsa care about breaching the rule of law?
Unsuitable or offensive? Report this comment
Anonymous | 8 Apr 2010 10:00 am
Funny that lawyers are complaining that the courts may be bypassed by this Bill.......meaning less work and therefore less money for lawyers!
The FSA absolutely should have the powers to force customer redress on firms, whether that makes them 'judge and jury' or not.
In the current system the customer has to instigate legal action themselves which costs an enormous amount of money and the firm will then simply attempt to 'depocket' the complainant ie spend so much that the customer has to give up.
I cannot believe anyone thinks this is a fair system in a regulated industry!
Yes the FSA will sometimes get it wrong (but the firm should be insured anyway) but this proposal is quicker, cheaper and less stressful for a legitimate complainant and that is the priority.
Unsuitable or offensive? Report this comment