Advisers want the Government to extend its plan to introduce fees for employment tribunal complainants to the Financial Ombudsman Service.
On Monday, Chancellor George Osborne told the Conservative conference in Manchester that introducing fees to bring cases to employment tribunals would stem the flow of “vexatious claims” against small businesses. Workers face a £150-£250 fee to launch a case and at least £1,000 if it goes to a hearing. Fees are refundable if the case is successful.
PMI Independent Financial Advisers director John Stewart says: “The way the FOS complaint system works is morally indefensible. I think this is a fantastic idea as it will reduce opportunist complainants.”
Baronworth Investment Services director Colin Jackson says: “If people litigate in the small claims court, they have to pay a court fee and if they succeed, they get the fee back.
“This court fee deters very frivolous claims. I am 100 per cent behind this proposal.”
Jackson’s Financial Services managing director Pete Matthew says: “I support this idea but I think it would be wise to have a higher fee for claim management firms and lower fees for individuals to make it fair.”
Treasury select committee member and Conservative MP Mark Garnier says: “In principle, it could work but the details are important. You have to strike a balance so that victims of misselling or bad advice do not have their rights compromised.”
Advisers are not charged for FOS complaints judged frivolous or vexatious. These made up 1 per cent of claims last year.
A FOS spokeswoman says: “Just because a complaint is rejected does not mean the consumer was wrong to have complained – we see many cases where a clear and helpful explanation from the business would have resolved the complaint.”