1st September 2010

More "True Lies"???

IFA letter of the week

"When he said I do, he never said what he did"

More "True Lies"???

For the last six months I have been involved in a dreary correspondence with Paul, Lord Myners, via my own MP, regarding Myners June 2009 submission to the Joint Committee on Human Rights regarding the surreptitious removal of the 15-year longstop defence.

Readers may recall that the Committee decided that the matter was not of sufficient importance and this was primarily due to Myners advising them that, "The FOS rules were consulted on extensively before they came into force on 1 December 2001". He also stated, "The Limitation Act 1980 does not apply to the FOS, a point that was discussed and considered when the Financial Services and Markets Act 2000 was being debated by Parliament."

This January he again chose to re-write history and complained, "My letter (to the Committee) does not refer either to Parliament debating the removal of the longstop or to the FSA entering into extensive consultation on the issue."

His latest missive, dated 14 March, asserts that, "The FSA consulted, in parallel, on the detailed rules including those covering the Ombudsman. I note, for example, that the question of time limits for making a complaint to the FOS was discussed in the joint FSA/FOS consultation paper CP33."

The words 'truth' and 'economical' do not do justice to this ongoing fiction and he must be gratified by the knowledge that non-elected Ministers cannot be deselected or pushed out by the electorate.

A scrutiny of his various points is clearly in order. CP33 did indeed consult on time limits for complaints but not only was the 15-year longstop never discussed, it was not even mentioned. The feedback statement, CP49, was published in May 2000 and contained an important proposal at s173. "Alignment with the English law of limitations in respect of the time limit for making a complaint to the Scheme after the act or omission giving rise to the matter in question."

Again, there is no specific mention of the longstop, but a crystal clear proposal that the FOS time limits would reflect those of the court system.

A policy statement was published in December 2000 and, no surprise, no specific mention was made of the longstop. A subtle wording change emerged at s1.13 where it stated, "As envisaged in CP49, the time limits for bringing a complaint to the FOS broadly mirror the law of limitation in respect of bringing actions to court."

The question is, are we dealing with semantics or are we being subjected to downright lies? No doubt you will draw your own conclusions.

So, did Lord Myners tell the Joint Committee that the disapplication of the Limitation Act was discussed and considered by Parliament when debating the bill? Yes. Did this actually happen? No.

Did Lord Myners state that the FSA consulted extensively on the FOS scheme rules before they came into force? Yes. Did this actually happen? Yes and no - the FSA did consult and as we have seen they did propose that the time limit rules would mirror those within English Law but they did not ever mention the removal or retention of the longstop. Furthermore, within the minutes of the FSA Board Meeting, dated 18 September 2003, the then CEO, John Tiner, stated unequivocally, ""We did not consult on having a 15 year limitation period when DISP was consulted on."

None of this is accidental. Financial firms have been duped and maybe even laughed at. A rich vein of disingenuosity can be located throughout this unsavoury episode. Untruths, vagueness, hints, suggestions, subtle adjustments and outright porkies have all been on display. Is it any wonder that such people are despised?

At a recent meeting, Michael Fallon MP Chairman of the Treasury Sub-committee expressed disquiet regarding the removal of advisers rights. These verbal shenanigans should be of equal concern and it is to be hoped that Lord Myners is called before them to explain his elastic terminology.

Alan Lakey - IFA
Highclere Financial Services

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