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We must call time on complaints

THE EDITOR’S COMMENT OF THE WEEK

Further to Peter Hamilton’s recent authoritative article in Money Marketing, both he and Anthony Speaight, QC, may well find it easier in their submissions to the Treasury to first use the example of a departed firm when attempting to illustrate their concerns.

We have acted unsuccessfully on behalf of a partnership which resigned from PIA authorisation in 1995. The partnership was dissolved over six years prior to the enactment of FSMA 2000 and creation of the FSA and the FOS (and the “comp-ulsory jurisdiction”) on December 1, 2001.

The FSA would clearly not attempt to argue that the firm or its former principals (whether they advised or not) are subject to FSA regulation.

However, the FOS seeks to argue that they have jurisdiction to make binding awards against the firm, even where the advice was given under Fimbra rules.

There was no requirement to document the reasons for recommendations in writing (or the risks) until January 1, 1995 (or earlier for pension transfers), files could be destroyed after six years and both Fimbra and the PIA followed the law on limitation. Despite this, complaints viewed under subjective views taken now of suitability then may be upheld simply because of the lack of evidence of prior investments or because the FSA has changed the rules on time-barring (on at least three occasions) to extend the time limits to complain and allow the FOS to assert jurisdiction.

Subject to the agreement of our client, we will write separately to Peter Hamilton in an attempt to support a clarification of the law, which would be of assistance to all.

Dexter Perrott
Director Regulatory Legal Solicitors

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. It’s an absolute disgrace that FOS is even trying to assert jurisdiction. It’s yet another example of everything that’s wrong with financial services.

  2. Both sides can choose to ignore the law and that is what the FOS and it’s staff are doing. As such, if it happened to me, I’d make sure whatever they tried to take from me “outside common law” I’d take off those involved in the decision.
    Forget teh lawyers, most of their mates work at the FSA!

  3. This was a conclusion that was inevitable not because of FOS but the way in which Transitional Order was drafted by Parliament. FOS is only doing what the elected representatives in 2000-2001 asked it to do.

    By the way, FOS in such cases applies the rules applicable to the adviser, which is the FIMBRA rules (as adapted by PIA for the period of PIA membership and the law not the fair and reasonable jurisdiction. In practice, the law and fair and reasonable are interpreted in almost identical fashion in advice cases by FOS as readers should be aware from the HME case and the decisions on this subject by both the Court of Appeal and the European Court of Human Rights. (HME lost both.)

    Those who know the FIMBRA rules are aware that they are very similar in their meaning to the current rules actually.

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