“150. – Actions for damages. (1) A contravention by an authorised person of a rule is actionable at the suit of a private person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty. (2) If rules so provide, subsection (1) does not apply to contravention of a specified provision of those rules.”
“(2) A complaint is to be determined by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case.”
“(a) an award against the respondent of such amount as the ombudsman considers fair compensation for loss or damage…suffered by the complainant (a “money award”); (b) a direction that the respondent take such steps in relation to the complainant as the ombudsman considers just and appropriate (whether or not a court could order those steps to be taken).”
“R. The Principles 1. Integrity A firm must conduct its business with integrity. 2. Skill, care and diligence A firm must conduct its business with due skill, care and diligence. 6. Customers’ interests A firm must pay due regard to the interests of its customers and treat them fairly. 7. Communications with clients A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading. 9. Customers: relationships of Trust A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.”
“A contravention of the rules in PRIN does not give rise to a right of action by a private person under section 150 of the Act (and each of those rules is specified under s 150(2) of the Act as a provision giving rise to no such right of action).”
“Some of the other rules and guidance in the Handbook deal with the bearing of the Principles upon particular circumstances. However, since the Principles are also designed as a general statement of regulatory requirements applicable in new or unforeseen situations, and in situations in which there is no need for guidance, the FSA’s other rules and guidance should not be viewed as exhausting the implications of the Principles themselves.”
“In considering what is fair and reasonable in all the circumstances of the case, the Ombudsman will take into account: (1) relevant: (a) law and regulations; (b) regulators’ rules, guidance and standards; (c) codes of practice; and (2) (where appropriate) what he considers to have been good industry practice at the relevant time.”
“any oral or written expression of dissatisfaction, whether justified or not, from, or on behalf of, a person about the provision of, or failure to provide, a financial service, which: (a) alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience; and (b) relates to an activity of that respondent, or of any other respondent with whom that respondent has some connection in marketing or providing financial services or products, which comes under the jurisdiction of the Financial Ombudsman Service.”
“The aspects of complaint handling dealt with in this appendix are how the firm should: (1) assess a complaint in order to establish whether the firm’s conduct of the sale failed to comply with the rules, or was otherwise in breach of the duty of care or any other requirement of the general law (taking into account relevant materials published by the FSA, other relevant regulators, the Financial Ombudsman Service and former schemes). In this appendix this is referred to as a “breach or failing” by the firm; (2) determine the way the complainant would have acted if a breach or failing by the firm had not occurred; and (3) determine appropriate redress (if any) to offer to a complainant.” (1) assess a complaint in order to establish whether the firm’s conduct of the sale failed to comply with the rules, or was otherwise in breach of the duty of care or any other requirement of the general law (taking into account relevant materials published by the FSA, other relevant regulators, the Financial Ombudsman Service and former schemes). In this appendix this is referred to as a “breach or failing” by the firm; (2) determine the way the complainant would have acted if a breach or failing by the firm had not occurred; and (3) determine appropriate redress (if any) to offer to a complainant.”
“In the absence of evidence to the contrary, the firm should assume that the complainant would not have bought the payment protection contract he bought if the sale was substantially flawed…”
“We consider it right and important to see the Principles as creating obligations on firms to comply with them, and as vital to delivering fair consumer outcomes. As we have repeatedly set out, the essence of the Principles-based approach is that the focus is on setting out the purposive ‘what’ that needs to be achieved (in the retail context this is typically a particular outcome for a consumer), not the ‘how’. This approach lets firms and us focus on what is important, and it gives appropriate responsibility to firms to deliver and comply in a way that best fits their business. This view is fundamental to our being a Principles-based regulator. It has formed the basis of numerous supervision and enforcement actions, which in many cases entailed the payment of redress to consumers. In the PPI context, omitting failings from the open letter because of industry criticisms of their relationship to the Principles could undermine our efforts to address many acts or omissions by which firms have potentially caused detriment to consumers and may continue to do so. If, as we believe, too many firms selling PPI have failed to live up to the responsibility for delivering fair and appropriate consumer outcomes under the Principles at the point of sale, then we need to hold them to account for this. To step back from the Principles would be bad for current and future consumers because it weakens their protection against poor outcomes, and bad for firms because we would need to be more prescriptive in rules and thus leave them less scope for flexible approaches in light of their own evolving business models.”
“We propose that it should not be possible for private persons to found an action for damages on the Principles alone. We have designed the proposed Principles as a statement of regulatory expectations, not as a set of legal rights at large. The high level at which they are expressed makes it important that their interpretation and application should be in harmony with the overall body of FSA rules and guidance and declared authorisation, supervisory and enforcement policy. This might be put at risk if civil litigation between private parties were to become the engine driving the interpretation of the Principles. The investor protection need can be amply met (as it is at present) by providing for civil actionability below the level of Principles in more specific rules. Since the Principles are not designed to create rights or liabilities in civil law, they will not provide a basis for payments under the compensation scheme.”
“25. We recognise that the practical application of the Principles needs to be reasonably predictable, for those to whom they apply. We will therefore amplify the Principles through a combination of rules, evidential provisions and guidance. The FSA Principles should not therefore be viewed in isolation, but in the broader regulatory context”
“27. If the Principles are to achieve their purpose, it is important the FSA should be able to take action to enforce them where: - it is clear that the conduct in question violates the Principles, regardless of whether any detailed rule, code or evidential provision has strictly been breached; - the behaviour in question breaches the Principles because it is closely analogous to behaviour which would constitute a breach of a detailed rule, and would breach the spirit, though not the letter, of the rule; - there is evidence of systematic and repeated breach of detailed rules. For example, repeated breaches of rules about recommending suitable products may indicate wider problems, such as a lack of due skill, care and diligence, breaching Principle 2.” - it is clear that the conduct in question violates the Principles, regardless of whether any detailed rule, code or evidential provision has strictly been breached; - the behaviour in question breaches the Principles because it is closely analogous to behaviour which would constitute a breach of a detailed rule, and would breach the spirit, though not the letter, of the rule; - there is evidence of systematic and repeated breach of detailed rules. For example, repeated breaches of rules about recommending suitable products may indicate wider problems, such as a lack of due skill, care and diligence, breaching Principle 2.”
“In my judgment, the following values are all to be appreciated and brought into a pragmatic balance: that an efficient and cost-effective and relatively informal type of alternative dispute resolution should not be stifled by the imposition of legal doctrine; that the opportunity for the development of new ideas was fitting to financial service industries operating in consumer markets should be appreciated for the benefits they can bring; that on the other hand transparency, consistency and accessibility as to the principles which inform the ombudsman’s determinations remain virtues in this new setting; and that publicity as to those principles and those determinations can assist in that regard.”
“Given that ICOB prescribed a detailed code on how an intermediary in the position of the Bank should conduct itself when purporting to give advice in respect of a single product ie whether to recommend it or not, I see no reason why any co-terminous duty of care should extend more widely. Moreover, the fundamental point raised by rule 4.3.7 (1) above was that the question of cost can only sensibly be dealt with by a comparison with other products. If (as here) the Bank cannot engage in such an exercise because of its very limited advisory role, I cannot see how it could be expected to advise more widely on the question of cost under a common-law duty of care. Its inability to make a comparison remains, as does the difficulty of imposing some sort of obligation to pronounce nonetheless upon whether the PPI was expensive according to some other standard.”
“When a firm communicates information to a customer, it must take reasonable steps to communicate it in a way that is clear, fair and not misleading”
“R A firm will be taken to be in compliance with any rule in ICOB that requires a firm to obtain information, to the extent that the firm can show that it was reasonable for it to rely on information provided to it in writing by another person.”
“R (1) Any information which a rule in ICOB requires to be sent to a customer may be sent to another person on the instruction of the customer” (2) There is no need for a firm to supply information to a customer where it has taken reasonable steps to establish that this has been or will be supplied by another person.”
“R (1) An insurance intermediary must take reasonable steps to ensure that, if in the course of insurance mediation activities it makes any personal recommendation to a customer to buy or sell a non-investment insurance contract, the personal recommendation is suitable for the customer’s demands and needs at the time the personal recommendation is made.”
“(1) This chapter reinforces Principle 7 (Communications with clients), which requires a firm to pay due regard to the needs of its clients and communicate information to them in a way that is clear, fair and not misleading. (2) The purpose of this chapter is to ensure that customers have the necessary information to make an informed choice about whether or not to buy a specific non-investment insurance contract and whether a contract continues to meet their needs.”
“5.3.2G Where the retail customer does not have the opportunity to read the information provided in accordance with ICOB 5.3.1R(1) before conclusion of the contact, for example, because it is provided in a sealed pack, the insurance intermediary should provide a specimen copy of all the information in such a way that the retail customer is able to read it before conclusion of the contract. For example, a stand with sealed packs could be accompanied by a copy of the policy summary and other required information, with a notice that they contain important information the retail customer should read before buying the policy. Oral disclosure at the point of sale must still be given in accordance with ICOB 5.3.1R(2).”
“(4) did not disclose to the complainant, in good time before the sale was concluded and in a way that was fair, clear and not misleading, the significant exclusions and limitations, i.e. those that would tend to affect the decisions of customers generally to buy the policy, or… (12) in a sale of a single premium payment protection contract, failed to disclose to the complainant, in good time before the sale was concluded, and in a way that was fair, clear and not misleading: (a) that the premium would be added to the amount provided under the credit agreement, that interest would be payable on the premium and the amount of that interest, or (b) (if applicable) that the term of the cover was shorter than the term of the credit agreement and the consequences of that mismatch; or (c) (if applicable) that the complainant would not receive a pro-rata refund if the complainant were to repay or refinance the loan or otherwise cancel the single premium policy after the cooling-off period.”
“We need to consider the overall impression left by the disclosures made by the firm. Does this represent a fair and balanced summary of the policy – noting not just its benefits but also its limitations and exclusions? Or is the impression given by the firm one that understates or ignores the limitations of the policy?”
“The purpose of Professional Conduct Rules, (which operate in relation to solicitors as with the Professional Conduct Rules operating in relation to most other professional bodies) is to identify in particular those areas of conduct in respect of which there should be specific prohibitions or requirements because they are likely to represent the most prevalent situations and the most prevalent conduct then in the profession. The fact that such a particular area of conduct is specifically dealt with does not mean that all other conduct is permissible or within the standards of the profession. It is thus ordinarily open to professional disciplinary tribunals to apply sanctions for professional misconduct generally, regardless of whether it is conduct singled out for mention in the rules. Were it otherwise, professional people might be permitted to conduct themselves in plainly deplorable ways without any disciplinary control.”
“Any power which the Authority has under any provision of this Act is not limited in any way by any other power which it has under any other provision of this Act.”
“must put in place appropriate management controls and take reasonable steps to ensure that in handling complaints it identifies and remedies any recurring or systemic problems, for example, by: (1) analysing the causes of individual complaints so as to identify root causes common to types of complaint; (2) considering whether such root causes may also affect other processes or products, including those not directly complained of; and (3) correcting, where reasonable to do so, such root causes.” (1) analysing the causes of individual complaints so as to identify root causes common to types of complaint; (2) considering whether such root causes may also affect other processes or products, including those not directly complained of; and (3) correcting, where reasonable to do so, such root causes.”
“Since 2001, section 404 of FSMA has reserved to the Treasury the ability to authorise the FSA to establish any industry-wide review of past business. The Act provides that HM Treasury would need to be satisfied that there had been widespread or regular failure and that private persons have suffered (or will suffer) loss. This takes the burden of proof way beyond incidental shortcomings within particular firms. Moreover, the Act requires the Treasury to proceed by way of specific Order, which must be approved by both Houses of Parliament. The FSA is therefore not able, as previous regulators were, to order industry-wide reviews of past business on its own account.”
“this is very different from a s404 review since a firm will only have to act towards non-complainants if it finds recurring shortcomings in its own sales in the course of its own root cause analysis (which must be diligent and robust) of such sales (and complaints about them), whereas in a s404 review it would have to act towards non-complainants because it was included in the scope of the s404 review established in response to a widespread or regular failure by firms.”
“Where a firm identifies (from its complaints or otherwise) recurring or systemic problems in its sales practices for a particular type of payment protection contract, either for its sales in general or for those from a particular location or sales channel, it should (in accordance with Principle 6 (Customers’ interest) and to the extent that it applies), consider whether it ought to act with regard to the position of customers who may have suffered detriment from, or been potentially disadvantaged by such problems but who have not complained and, if so, take appropriate and proportionate measures to ensure that those customers are given appropriate redress or a proper opportunity to obtain it. In particular, the firm should: (1) ascertain the scope and severity of the consumer detriment that might have arisen; and (2) consider whether it is fair and reasonable for the firm to undertake proactively a redress or remediation exercise, which may include contacting customers who have not complained. ” (1) ascertain the scope and severity of the consumer detriment that might have arisen; and (2) consider whether it is fair and reasonable for the firm to undertake proactively a redress or remediation exercise, which may include contacting customers who have not complained. ”
“What, however, was impermissible was to make a public announcement having an intention and effect which could only be achieved by implementation of clear and particular procedures prescribed in an Act of Parliament when the effect of the announcement was to deny the companies the rights and protections which Parliament had enacted they should enjoy. So to act was to circumvent the provisions of the legislation and to act unlawfully.”
“where Parliament has made detailed provisions as to how certain statutory functions are to be carried out there is no scope for implying the existence of additional powers which lie wholly outside the statutory code. Section 111(3) makes it clear that the power to enter into financial obligations is subject to any statutory controls which may be imposed”
“I agree with Neill L.J. that, having regard to the detailed statutory scheme governing the housing functions of a local authority and in particular the express provisions relating to raising money to provide housing and to giving financial assistance to others to acquire housing, there is no scope for treating section 111 as authorising a local authority to give a guarantee and indemnity such as were given in the present case. It is simply inconsistent with the statutory scheme that a local authority should have the power to set up a company and give a guarantee of the company’s liabilities and an indemnity.”