Banking APPG calls to create financial services tribunal after scandals ‘eroded public trust’
The All-Party Parliamentary Group for Fair Business Banking (APPG) has recommended a creation of a new financial services tribunal after a series of high-profile scandals “eroded public trust”.
The cross-party group outlined its recommendation on building a framework for compensation and redress in its report, which stated that the existing landscape of institutional mechanisms for redress is “fragmented”.
Examining the report, Maria Ward-Brennan of City A.M. spoke to Hausfeld Partner Ned Beale, who is currently leading the All-Party Parliamentary Group on Fair Business Banking’s judicial review against the Financial Conduct Authority in relation to their handling of the IRHP redress scheme. He commented: “This report is the UK’s first systematic review of redress and compensation schemes, and the first guide to best practice when schemes are designed and implemented. We should aspire to a world where the requirement for redress schemes does not arise in the first place.”
One of the report’s recommendations was setting up a permanent body to adjudicate disputes in the financial sector, where both businesses of all sizes and individuals would be eligible to participate. The report explained that a financial services tribunal would be funded by the HM Treasury in the same way as other tribunals. However, it would introduce a small levy on financial services companies to meet the cost which would require legislation.
The tribunal was one of the three recommendations the report suggested. The second was urging the Government to publish a handbook establishing compulsory guidelines by which any public agency or private firm or organisation must abide when setting up a redress scheme.
The report outlines that the body should be composed of expert panels, to ensure guaranteed independence of judgement, and will be accountable directly to Parliament and regulators.
Ned further highlighted: “Compensation and redress schemes are vehicles deployed to remedy the most sensitive problems in financial services. They must bear heavy loads. These include delivering justice for large groups of consumers and resolving complex legal claims without court proceedings”.
