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On to a loser with system

If I say that I handle complaints to the FOS for a number of IFAs, then your IFA readers will understand why it is always with a very profound sense of relief that I reflect that legal services in Scotland are not, as yet anyway, subject to the same surreal system.

Where you have a system in which a complaint may be raised without any sanction of adverse cost, no matter how spurious the grounds may be, and no sanction against telling anything other than the unvarnished truth, then it can come as no surprise either that the number of complaints soars or that the quality of evidence on which such complaints may be determined can be so poor. Lack of time and lack of evidence simply leads to speculation by adjudicators in place of factual assessment.

If you then add what appears to me to be an almost complete and widespread ignorance among adjudicators as to the concepts of investment risk, risk profiling and risk assessment, subjective hindsight then replaces objective assessment of the circumstances prevailing at the time that advice was given. If that is not enough, all too frequently, common sense and legal principle are rejected.

To top it all off, there is no means of appeal against the decisions of those who have more or less stated that they make up the law as they go along. A Star Chamber by any other name.

I offer the following extract from an FOS decision as a beacon of light and which I will most certainly include in every single FMDL for an IFA client and every response to an FOS complaint.

“At this point, I should explain that we are not regulators of the financial industry. It is not part of our role to supervise, regulate or discipline the firms we cover. Therefore, it is not for us to award punitive damages or to require a firm to alter its systems. Our role is simply to resolve individual disputes between consumers and financial firms, where consumers think they have lost out. We provide an informal alternative to the civil courts and we have the power to award monetary compensation to make good actual loss, damage or substantial inconvenience that is caused to a consumer by a breach of duty on the firm’s part.

“Whilst I appreciate the time you have spent on this matter, I am sorry to disappoint you but in my view the complaint would be unsuccessful if we were to investigate it further for the following reasons.

“The complainers made their own decision to proceed with the application and were not compelled to accept any proposals put to them.

“If the complainants were concerned regarding any terms and conditions, it would have been open to them to have raised their concerns with the firm before accepting its offer or perhaps seek the mortgage from another lender. The general legal principle is that a person is bound by the terms and conditions that they have signed, irrespective of whether they have read or understood them.

“We do not continue to look into a complaint where, in our view, it is clear it will not succeed. Accordingly, and for the reasons I have explained, I do not consider that the complainers’ complaint should be considered further.”

We will only achieve that level of common sense when the IFADU achieve their end in the European Court of Human Rights, and more power to Evan Owens’ elbow, and when this Government agrees to amend FSMA 2000 by creating an appeal procedure to challenge the idiocies of the FOS.

Alasdair SampsonPartner,

Drummond Miller WS,

Solicitors,

Glasgow

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