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Gordon Brown gives bank victims the right to claim 'instant justice' | Mail Online
Gordon Brown will this week clear the way for customers to launch multi-million-pound class action lawsuits against financial institutions for the first time.
Customers would also be entitled to claim 'instant justice' against any bank they accuse of ripping them off.
The measures, to be introduced in a Financial Services Bill on Thursday, are part of an effort by Mr Brown and Chancellor Alistair Darling to react to public anger over the banks' profligacy.
Billions of pounds of taxpayers' money have been used to bail them out but they have ramped up charges and City workers have continued to award themselves bonuses.
Under the proposed law changes, class actions would be allowed in cases such as the near-collapse of the Equitable Life insurance firm, which led to a million customers losing most of their retirement savings.
In current law, investors have to pursue claims for compensation individually through the courts at potentially huge costs.
Under the plans, the Financial Services Authority (FSA) would charge a levy to banks to pay for 'instant justice' for customers.
A Treasury spokesman said: 'We will give the FSA the power, when it has had a number of complaints about a particular bank or a particular financial product, to set up a one-stop redress mechanism. 'This will mean people will not need to go to court.'
A Supreme Court ruling next week is expected to open the door to challenges on overdraft charges that could cost the banks up to £3billion.
The court has been looking at whether the Office of Fair Trading is legally able to assess the fairness of charges for overdrafts.
Gordon Brown will this week clear the way for customers to launch multi-million-pound class action lawsuits against financial institutions for the first time.
Customers would also be entitled to claim 'instant justice' against any bank they accuse of ripping them off.
The measures, to be introduced in a Financial Services Bill on Thursday, are part of an effort by Mr Brown and Chancellor Alistair Darling to react to public anger over the banks' profligacy.
Billions of pounds of taxpayers' money have been used to bail them out but they have ramped up charges and City workers have continued to award themselves bonuses.
Under the proposed law changes, class actions would be allowed in cases such as the near-collapse of the Equitable Life insurance firm, which led to a million customers losing most of their retirement savings.
In current law, investors have to pursue claims for compensation individually through the courts at potentially huge costs.
Under the plans, the Financial Services Authority (FSA) would charge a levy to banks to pay for 'instant justice' for customers.
A Treasury spokesman said: 'We will give the FSA the power, when it has had a number of complaints about a particular bank or a particular financial product, to set up a one-stop redress mechanism. 'This will mean people will not need to go to court.'
A Supreme Court ruling next week is expected to open the door to challenges on overdraft charges that could cost the banks up to £3billion.
The court has been looking at whether the Office of Fair Trading is legally able to assess the fairness of charges for overdrafts.
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