The department of business, innovation and skills has sponsored a directive that would give consumers even more rights and could put paid to any progress made by the industry, which had been in talks with the FCA over the viability of implementing a long-stop.
The chairman of the FCA, John Griffith-Jones, said the creation of the Alternative Dispute Resolution Directive – which was signed off by the European Parliament and Council in March and is going through a transition period led by BIS – has forced the regulator to put its fair liability talks on hold. The new European directive, dealing with the protection of consumer rights, allows member states to restrict some complaints to the ombudsman, for example, where the matter is too complicated and needs to be left to the courts.
Commenting on the directive, a spokesman for BIS said: “The directive will be coming in from July 2015 following a full consultation on this earlier this year. We will now be working with the regulator, the FCA, to give further consideration to their concerns and attempt to mitigate them as far as possible.”
At the FCA’s annual meeting, chief executive Martin Wheatley said the issue of fair liability has become more complicated because of the directive and confirmed that it was now on hold.
ADVISER VIEW
Helen Turner, distribution and development director at Tenet, said: “The FCA chairman stated that it first has to decide ‘if we want to do a long-stop’. However thousands of people have signed the e-petition for fair liability for financial advice, stating they do want it. This will now form part of the case for the Apfa long-stop working group’s forthcoming meeting with the FCA.”
