24th June 2013

Is consumerism the new socialism?

I am aware that had this been a Stalinist regime, I would not be able to asks these questions or make these points! Fortunately, there are a few people who ARE willing to do something and I believe that – are you going to be one of them?

The Financial Services and Markets Acts 2000 allows the FSA/FOS & now its replacement the FCA, to act as a quasi-judicial body without imposing upon that body the requirement power to operate within the rule of law. It is able to do so because it claims the FSMA has given the regulator it Statutory Authority and therefore its power are legitimised. However, the Act exempts the FCA/FOS from the rules of evidence, the right to an independent and impartial tribunal; and perhaps the very worst aspect - denies the right of appeal to the open courts.

This of course this has empowered the consumer. In the case of the Financial Ombudsman grant the consumer the right of appeal to the courts but not the adviser. It therefore panders to the “Lynch mob” and has allowed a free for all whilst tying the hands of the advisers defence firmly behind their back. Consumers have been allowed to demand rights without responsibility & without the constraints of a just and fair hearings.

I am “not” asking for an unregulated industry or any diminution of consumer rights but I am suggesting that some sanity is put back into this process and that mean accountability to the courts. Quite simply grant the defence the same right of appeal that is granted to the plaintiff. Grant the accused the right to seek redress in the open courts if falsely accused.

At stroke sanity, justice and common sense would return. Consumers would base their complaint on reasonable grounds rather than a lust for compensation and we would hand back to the judiciary that which has been in their safekeeping for 1000 years i.e. the rule of law!     

David Cameron PM has lectured the commonwealth on human rights and yet allowed S228(2) of the Financial Services and Markets Acts to impose on firms "such steps as the ombudsman considers just and appropriate (whether or not a court could order those steps to be taken" - S229 (2)(b).

The FSA has said:

The lack of an Appeal process may offend the "fair trial" provisions of Article 6 of the European Convention of Human Rights ECHR incorporated into law by the Human Rights Act 1998. They go on to say that the right to a Judicial Review is not a right to an appeal and an external appeal could maintain the quality of the decision: http://www.fsa.gov.uk/pubs/cp/cp04_12.pdf  go to page 30!

Remember, the issue is not the Right of Appeal. The right of Appeal has already been granted to the plaintiff but denied to the defendant. It's only the IFA that doesn't get this justice!

Simon Mansell

BA (Hons) Law, (DipFA®), MIFS®,
*MD - Temple Bar IFA

Regulation