Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

[Amethyst]

Re: Latest updates on PPI Judicial Review and claims on hold

LUNCH BREAK UPDATE ON JR PPI

Bear with me while I write this properly, just notes at mo, sorry if it doesn't make much sense, its bloomin' noisy outside the RCJ today!


The BBA's Counsel has been speaking this morning again - the main gist of the argument is that the firms historic procedures will reflect ICOBS, but they wont reflect the principles (ie the guidance) issued by FSA so therefore its unfair to expect them to ....the firms are saying they are shooting at a moving target and the rules have moved over time, since the firms procedures at the time only reflected ICOBS and not the guidance.

The firms are being a little out of order IMO in presenting to the Judge that all the firms comply with ICOBS - whereas in our opinion they would fail the test even just on ICOBS, but the firms are sayig that even if they folowed icobs they would still fail the test because of the guidance and moving goalposts.

cited 2008 decision ombudsman - against Postit????????? need to look that up unless anyone knows off top of their head ? possibly http://www.financial-ombudsman.org.u...decision-B.pdf ? http://www.financial-ombudsman.org.u...decision-C.pdf ? or http://www.financial-ombudsman.org.u...decision-a.pdf - or d/e/f etc I don't know without reading them all in full and of course the firms name and the complaintants names are redacted in those reports.

online guidance from FOS issued in 2008 - which differs from ICOBS again.

pannicks junior expanded occupied field test argument - (from yesterdays report this is '''''
‘’This is an ‘occupied field’ test. Having set out specific and detailed rules, the FSA are precluded from setting out guidance in that field - save by an amendment of the specific rules’’.''''''' ) once a regulator has issued rules in a particular area they are prohibited from giving further guidance within that area except by way of changing the rules..... bba saying fsa should have changed the rules rather than issuing guidance - no response to that yet from fsa/fos.


The principle is basically that if the regulators fail to act in good time and get the rules right first time its not for them to apply retrospective rules..... (Agree with that)

FOS online guidance 2008 adjudicator entitled to take into account anything to ensure fairness - usual argument of FOS not being tied to specific law/rules etc including the FSA guidance.


BBA finishing after lunch.

So if FSA lose they are able to change ICOB but not retrospectively.

Still standing room only in the court room.


Basically I think the argument is do the principles change the rules retrospectively and if so can the FSA do that (and I think the answer is no)

[Chip Tuesday]

Re: Latest updates on PPI Judicial Review and claims on hold

The "occupied field" test worries me. How can the FSA be allowed to issue any Handbook updates (i.e. Guidance (G) and Evidential (E) provisions) without breaching this legal doctrine?

From what I have found (very limited info available from what I've been able to find) the occupied field test is more of a European Law principle, as enforced by the 1992 Maastricht Treaty which amended the original EC agreement.

CT

[Amethyst]

Re: Latest updates on PPI Judicial Review and claims on hold

Thankfully, as I seem to have gone round in circles there, Tom will do a proper write up this evening....

This occupied field test seems to be basically that rules in a particular field have been laid down thus it is occupied and they cannot be changed without changing the rules, you cant just add on guidance to say 'this is what we meant all along'' just because you missed bits out the first time. (how's that for plain english)

and yes, Tom did mention that that argument seemed to make a farce of the FSA having powers to lay down guidance and evidential provisions at all.

Occupied field

The so-called principle of the "occupied field" refers to areas in which treaties have handed law and policy-making powers (competence) to the EU. When this happens, Member States lose their powers (competence) in this area, even if the EU has not yet legislated.

So bringing that down to the the FSA and the government ? I don't pretend even to begin to understand it all.

just out of interest Regular Premium Insurance Policies: Further clarification on the ICOBS requirement to disclose total premium

[Chip Tuesday]

Re: Latest updates on PPI Judicial Review and claims on hold

http://www.financial-ombudsman.org.u...decision-B.pdf

This case relies on the Principles (1,6,7,8&9) as a mean by which the FOS comes to a decision, but the decision also used ICOB 4.3, 4.4, 5.3 and 4.3.1R

CT

[Angry Cat]

Re: Latest updates on PPI Judicial Review and claims on hold

On an aside, many of the banks involved actually did sign up to the ABI Code of Conduct and the GISC code of conduct on the selling of General Insurance. Prior, to the FSA taking over the so-called regulation of same.

There is also points of law involved here re: faulty products and;
possibly Negligence in Contract Re: some cases of PPI mis-selling.

The Banks don't want mis-sold PPI cases to be made retrospective, of course they don't.
However, they should have thought about the possible consequences, before ripping off the general consumer!

[Amethyst]

Re: Latest updates on PPI Judicial Review and claims on hold

So the question is I think would they still have failed if ONLY the ICOBS was relied on and not the principles ?

This seems to be a good summary of the arguments - http://www.dac.co.uk/documents/resou..._review_-_Wire

The BBA's application is also a challenge to the FSA's move away from detailed rule-based regulation to a greater reliance upon its 11 high-level Principles for Business.
The BBA argue that the FSA is requiring firms to decide complaints about the sale of PPI policies by reference to regulatory standards more onerous than the requirements in force at the time of the sale. It is central to the BBA's case that it is unlawful for the FSA to require firms to determine complaints by standards retrospectively imposed by the FSA and that alter liabilities of firms to their customers.
In particular the BBA argue that the FSA has derived its standards from the FSA's high-level Principles for Business rather than solely by reference to its detailed rules in its Insurance Conduct of Business sourcebook. The problem with relying upon the Principles is that breach of the Principles does not give rise to a cause of action by a customer. The BBA's argument is based on human rights law and that it is inappropriate to attach legal liability to breach of the Principles, that are framed at a high level of generality, because that would be contrary to the requirements of legal certainty necessary for the creation of legal rights and obligations.
The BBA say that its members designed their sale processes to comply with the Insurance Conduct of Business rules and not with the standards contained in the FSA policy statement, and consequently, its members will not be able to show they have complied with certain of the standards contained in the policy statement.
The BBA also mounts a challenge to the guidance published by the FOS in November 2008 that the FOS uses when deciding PPI complaints on the basis that the guidance also relies upon the FSA's Principles rather than solely relying upon the FSA's Insurance Conduct of Business rules.
Using its guidance the FOS decides over 80% of PPI complaints in favour of the customer. The BBA maintain that the FOS may not use the Principles to uphold a complaint and create legal liability (an FOS determination is final, binding and enforceable as if it were a court judgment). The BBA argues that the FOS guidance is not an application of the FOS discretion to decide a particular case by what it considers fair and reasonable. They also argue that the FOS is required to take into account relevant rules, standards and guidance and that such an interpretation is necessary to ensure legal certainty required by human rights law.

[Amethyst]

Re: Latest updates on PPI Judicial Review and claims on hold

Angrycat, I think many cases will be found to be missold solely under ICOBS and don't need the added principles - but I don't think that is the argument. Ie. this case isnt whether PPI was missold, it is whether it can be adjudged to be missold under the principles or only ICOBS rules in force at the time.

Some cases may only be found to have been missold under the principles, as the ombudsman seems to be adjudicating, but actually followed the letter of ICOBS, so should (in argument) be found to have been sold correctly.

Ame
xx

[Angry Cat]

Re: Latest updates on PPI Judicial Review and claims on hold

Angrycat, I think many cases will be found to be missold solely under ICOBS and don't need the added principles - but I don't think that is the argument. Ie. this case isnt whether PPI was missold, it is whether it can be adjudged to be missold under the principles or only ICOBS rules in force at the time.

Some cases may only be found to have been missold under the principles, as the ombudsman seems to be adjudicating, but actually followed the letter of ICOBS, so should (in argument) be found to have been sold correctly.

Ame
xx

Yes Amethyst!

However, I threw the other valid points into the thread, as I have already obtained counsels (QC) opinion.

[s14lhp]

Re: Latest updates on PPI Judicial Review and claims on hold

thank you for keeping us updated.

correct me if i'm wrong here but even cases prior to 2005 (FSA) if mis-sold would have grounds to pursue under 3.5 (mis-leading) of the GISC code of conduct and 3.2 (matching requirements).

[Chip Tuesday]

Re: Latest updates on PPI Judicial Review and claims on hold

true, but GISC and ABI were voluntary industry standards, so the banking profession per se cannot be held to account on them. However, as industry standards they really do set a precedent on how to behave, so the banks have no excuse in saying they weren't aware of what they were doing.

CT

[di30]

Re: Latest updates on PPI Judicial Review and claims on hold

Sorry folks, not been with it today, so apologies if this have already been posted.
This is from the FOS website in regards of the JR.

http://www.financial-ombudsman.org.u...judicialreview

Online PPI resource

In this section of our website you'll find a collection of online documents, reference materials and links – giving more background to our work on complaints involving payment protection insurance (PPI).
This section may be of particular interest to businesses and consumer advisers.
legal challenge ("judicial review") on payment protection insurance (PPI)

The ombudsman will continue to handle consumers' complaints about payment protection insurance – despite the legal challenge ("judicial review") brought by the British Bankers Association (BBA) against the FSA and the Financial Ombudsman Service on the approach to PPI complaints handling.
The legal challenge began at the High Court in London on 25 January 2011. A final outcome is not expected for some time.

As well as the ombudsman continuing to handle PPI complaints, the FSA has:

• confirmed that consumers can still complain about a PPI policy direct to the business involved – in the normal way; and
• issued a reminder to firms that they are still expected to carry out a full initial review of all PPI complaints received – despite the legal challenge.

our consumer factsheet on ...

[Amethyst]

Re: Latest updates on PPI Judicial Review and claims on hold

FINISHED FOR THE DAY

BBA talked till 4pm today - essentially same submission - that the FSA, instead of making amendments to the principles, should have conducted an industry wide review sec 403 FSMA - essence moving goalposts creating liability for damages which they would not otherwise be liable for.

In last 15 mins the FSA guy stood up - first point is why has FOS been dragged in to it - the FOS is the second stage of a two stage complaints proces - first is to the firm itself, second is to the Fos. The reason the FOS is in it would be absurd to insist the firms didn't have to apply the principles but the fos could. 2008 guidance isnt reallly even guidance but an online resource.

FSA pointed out the BBA arguments not very coherent. This is not a challenge to the use of the principles as they have been in use since 2005 and it is not a challenge to guidance issued and not a challenge to the open letter to the industry itself.

The application is a challenge to the lawfulness of the amendments to DISP. Entire case is about statutory construction - ie. do the FSA have the legal powers to make the changes to DISP - without using section 403/404 FSMA (whichever bit it is about consultation)

FSA doesnt have any specific powers to make the handbook. They are using their General powers under FSMA and no one has challenged since 2005. Where as FOS have very specific powers under FSMA and manner it goes about making decisions included in schedule 17 to the Act.

[Amethyst]

Re: Latest updates on PPI Judicial Review and claims on hold

We don't have anyone there tomorrow (unless anyone is free?) but will do on Friday morning and late afternoon.

Hopefully we'll have a better write up about today's proceedings later on this evening.

[di30]

Re: Latest updates on PPI Judicial Review and claims on hold

Marvellous, thanks for this Ame x

[Chip Tuesday]

Re: Latest updates on PPI Judicial Review and claims on hold

Cheers Ame, good effort to everyone who has been able to get up to London and listen in for us so far - you're all stars!

CT