AWARDS (Hansard, 5 June 2000)

§ Mr. Timms
I beg to move, That this House agrees with the Lords in the said amendment.
The amendment is technical; it clarifies subsection (3) of clause 223 and results from concerns raised on Report in another place that the provision might be open to misinterpretation. There was concern that the subsection might be read as requiring the ombudsman to try to construct hypothetical contracts, or to award compensation according to whether there had been a breach of an actual contract.
In fact, the provision was only ever intended to set out the type of loss or damage for which the ombudsman could make awards. To require the ombudsman to make awards based on actual or hypothetical contracts would contradict the principle set out in clause 222 that cases should be determined on the basis of what is fair and reasonable in all the circumstances. The amendment puts matters beyond doubt. It recasts subsection (3) so that the reference to awards of a kind a court could make for breach of contract is replaced by a more straightforward distinction between financial loss and other loss or damage "of a specified kind". I commend the amendment to the House.

§ Mr. Flight
I raise one point for clarification. The ombudsman schemes allow consumers redress to the courts if they are not happy with the scheme, with a three-year time limit from when they first raise a matter. In several cases, the Personal Investment Authority ombudsman took at least two years to address a matter and time ran out, so the issue is whether the three-year 121 period should run from the time of the first referral or whether the time taken by the ombudsman should be excluded when calculating the three-year period.

§ Mr. Timms
The standard limitation period is, of course, six years, although it can vary according to the type of case and according to judicial discretion. If a lengthy complaint was before the ombudsman and a statute bar appeared on the horizon, it would be up to the consumer to institute protective court proceedings to ensure that the limitation period did not run out. Perhaps I could provide the hon. Gentleman with further information to resolve the question that he raises.