§ Ms LawrenceTo ask the Chancellor of the Exchequer what responses he has received to proposals for a single ombudsman scheme as set out in the draft Financial Services and Markets Bill; and if he will make a statement. [74393]
§ Ms HewittThe Government are committed to improving consumer protection, and the creation of the single ombudsman scheme is an important element in delivering such protection. The response to the draft Bill published in July 1998 showed strong support for the creation of the single ombudsman scheme. The Government, however, intend to amend some of the relevant provisions of the Bill to meet valid concerns raised.
The draft Bill allows for an appeal to the courts against the ombudsman's determination by either respondent or complainant on a point of law. Consistent with the objective of resolving disputes quickly and with minimum formality, we have decided to remove this provision.
Currently, the Bill allows the Ombudsman to order complainants to pay costs if they behave improperly or unreasonably. In order that complainants should be able to approach the Ombudsman without the fear of being ordered to pay the respondent's costs, we have decided to provide for the scheme operator to make rules authorising awards of the scheme's costs against either party, limited in the case of the complainant to the costs of the scheme operator.
We also intend to widen the FSA's discretion over which complaints are to be included in the compulsory jurisdiction. The FSA will be able to include all financial services carried out by authorised persons, not just those listed in Schedule 2 to the Bill. This change will allow the FSA to bring within the compulsory jurisdiction the large majority of disputes involving authorised persons which can currently be dealt with by the existing schemes, including the Banking and Building Societies Ombudsmen. We will also give the FSA sufficient flexibility to exclude some categories of regulated firms where there is a case to do so. We propose that the scheme operator should have similar discretion over the scope of the voluntary jurisdiction.