Kevin Hollinrake MP (Co-Chair of the APPG on Fair Business Banking) has published his report titled "Fair Business Banking for All: How to improve access to justice for businesses in financial services disputes" (the Report).
Following the APPG's responses to the FCA's consultation on expanding the FOS's jurisdiction (CP18/3), the Report sets out various recommendations which in the APPG's view would help "level [the] playing field between financial firms and businesses, and address the twin issues of SME's lack of legal rights and the gap in dispute resolution provision."
The recommendations include the creation of a "Financial Services Tribunal" (the Tribunal) to provide an alternative to the courts for SME's to resolve disputes with financial services firms.
The Tribunal would be modelled on the existing Employment Tribunal, with two members from business/financial services backgrounds assisting a judge. It would have full legal powers to order disclosure and attendance of witnesses and, in certain circumstances, "qualified one-way cost shifting" to allow successful claimants to recover costs but not respondent firms. Allied to this, the APPG also calls upon the Government to consider introducing longer limitation periods for claims in the Tribunal.
Alongside the establishment of the Tribunal, the Report proposes various regulatory changes to enhance the rights of SME's. These would include extending the definition of "private person" in the Financial Services and Markets Act 2000 (Rights of Action) Regulations 2001 and extending the FCA's regulatory oversight to cover commercial lending, including for example products such as fixed rate loans, enabling businesses to bring claims to the Tribunal concerning breaches of relevant FCA Rules.
It is proposed that the Tribunal would be funded by the Treasury, which in turn would be reimbursed by a levy on firms.
You can read the full report here.
Contributor: Jack HargreavesThis publication is intended for general guidance and represents our understanding of the relevant law and practice as at July 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.