8th February 2011

Open letter to Vince Cable, John Cridland and Natalie Ceeney

Dear Sirs and Madam,
I understand that workers may find it harder to take their employers to an employment tribunal because it is thought desirable to attempt to deter vexatious claims.

Parts of these proposals suggest that claimants may be required to pay a £500 fee to bring any tribunal case.  The proposals, on which the government is consulting, are in response to employers' worries about unjustified claims.

I understand the CBI has welcomed this but, unfortunately, the Association of Independent Advisers has made no representations to adopt these proposals and for them to be applied to the Financial Ombudsman’s Service.

I would also like to ask that you to extend these proposals to the Financial Services Industry in order to extend the same protection to the small IFA, who is also in need of protection from unjustified claims, but on a much greater scale than even employers.  With the FOS, the financial adviser pays the fees, win or lose, and the FOS has been given unappealable powers to fine up to £150K.  Many consider this to be an abuse of Natural Justice.  I suggest that if this method of funding were extended to other professions, we would effectively bring commerce in the UK to a grinding halt, as indeed it is doing to the financial services industry!
 
The Financial Services and Markets Acts allows the Financial Ombudsman to act as a quasi-judicial body without imposing upon that body any requirement to operate within the rule of law. The Act exempts the FSA/FOS from the rules of evidence, the right of those being complained against to an independent and impartial tribunal and, perhaps the very worst aspect, it denies the right of appeal to the open courts.
 
It is time the FOS was reformed as it has no place in a modern democracy.  Whilst we are told by the regulators that a right of appeal would "complicate" the FOS process, though strangely this logic is not carried across to the complainant, whose right of open access to the courts is not denied.  This right to complain without consequence panders to the “lynch mob” and has allowed a free for all whilst tying the hands of defence firmly behind their back.

I am not asking for an unregulated industry or for any diminution of consumer rights.  Rather, I am suggesting that some sanity and accountability are put back into the process.  A £500 fee required of the claimant to deter false and vexatious claims would be a good place to start.
 
Best regards
 
SIMON MANSELL

Temple Bar

Independent Financial Advice

Regulation