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Financial Services Bill

The Government have carefully considered points made in another place and by the industry about the ability to review rules made by the FSA establishing a consumer redress scheme. The Government have accepted that the Bill should expressly set out a means of challenging rules, rather than requiring parties to rely solely on the judicial review process. Amendment 285, therefore, provides that any person may apply to the upper tribunal—the successor to the Financial Services and Markets Tribunal—for a review of the rules made by the FSA under Section 404. The new clause provides for the review to be carried out by the upper tribunal. Although the new clause generally makes provision for the tribunal to apply usual judicial review principles, in two specific cases it provides for the tribunal to review provisions of the rules on their merits. First, the tribunal will be able to determine whether examples given by the FSA of things that are to be regarded as a failure to comply should in fact be regarded as such a failure. Secondly, the tribunal will also be able to review on their merits matters which the FSA has required firms to take into account or steps that the FSA has required firms to take for determining whether they have failed to comply with the relevant requirement and, if they have failed to comply, whether that failure has caused loss or damage to customers. Furthermore, in the light of industry concerns about the use of the power, we have also agreed to change the commencement of this clause so that it must be commenced by order rather than automatically on Royal Assent. Amendment 332C, therefore makes this change. I beg to move.