61

House of Commons

Tuesday 12 January 2010

Public Bill Committee

New Amendments handed in are marked thus

Amendments which will comply with the required notice period at their next appearance

Financial Services Bill

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Note

The Amendments have been arranged in accordance with the Order of the

Committee [8 December 2009].

Mr Mark Hoban

53

Clause  11,  page  8,  line  28,  leave out paragraph (c).

Mr Colin Breed

Dr Vincent Cable

55

Clause  11,  page  8,  line  33,  at end insert ‘; and

(c)	the regulatory objectives of the Authority.’.

Mr Mark Hoban

54

Clause  11,  page  9,  line  11,  after ‘void’, insert ‘where that agreement was signed

after 19 November 2009.’.

Ian Pearson

56

Clause  11,  page  9,  line  17,  at end insert—

‘( )	A provision that, at the time the rules are made, is contained in an agreement

made before that time may not be rendered void under subsection (9)(b) unless it

is subsequently amended so as to contravene a prohibition under subsection

(9)(a).’.

Member’s explanatory statement

This amendment makes it clear that the general rules about remuneration may not render void any

provision which is already in an agreement when the rules are made (so long as the provision is

Public Bill Committee: 12 January 2010

62

Financial Services Bill, continued

not subsequently amended in a way that contravenes the rules).

Rob Marris

57

Clause  12,  page  11,  line  5,  at end insert ‘or requiring the authorised person to be

broken up into several persons by a date specified by the Authority.’.

Mr Mark Hoban

58

Clause  18,  page  23,  line  9,  at end add—

‘(7)	Proceedings may be authorised under subsection (1) only if the representative—

(a)	is authorised to act as representative on an ad hoc basis under the civil

Procedure rules, or

(b)	is authorised to act as representative and on such terms as specified by

order of the Lord Chancellor, in accordance with criteria to be published

by the Lord Chancellor for the purposes of this section.

(8)	An application by a body to be authorised under subsection (7) is to be made in a

form approved by the Lord Chancellor for the purpose.

(9)	Before issuing criteria or authorising a body under subsection (7)(b) the Lord

Chancellor shall consult the Lord Chief Justice.

(10)	The Lord Chief Justice may nominate a judicial office holder to carry out the

functions under subsection (8).

(11)	In this section—

“judicial office holder” has the same meaning as in section 109(4) of the

Constitutional Reform Act 2005;

“court” means in England and Wales, the High Court, or, in Scotland, the

Court of Session.’.

Mr Mark Hoban

59

Clause  21,  page  24,  line  14,  at end insert ‘, and

‘(c)	is brought by or on behalf of (and is limited to) persons who are

consumers;’.

Mr Mark Hoban

60

Clause  21,  page  25,  line  15,  at end add—

Public Bill Committee: 12 January 2010

63

Financial Services Bill, continued

‘(8)	In this section “consumer” means any natural person, who in the matters to which

the claim relates, is acting for purposes which are outside his trade, business or

profession.’.

Mr Mark Hoban

61

Clause  22,  page  25,  line  19,  leave out from ‘Authority’ to ‘are’ in line 20 and insert

‘and the Office of Fair Trading’.

Mr Mark Hoban

62

Clause  22,  page  25,  leave out lines 22 to 29.

Mr Mark Hoban

63

Clause  22,  page  25,  line  30,  leave out paragraph (e) and insert—

‘(e)	suspend any limitation provision applicable to members of a class

represented within the collective proceedings,’.

Mr Mark Hoban

64

Clause  22,  page  25,  line  35,  leave out subsection (3) and insert—

‘(3)	Regulations made by virtue of subsection (2)(e)—

(a)	shall provide that any applicable limitation period will be suspended in

favour of a class member on a specified date and will resume running

against the class member on the occurrence of specified events, and

(b)	may make similar provision with respect to the period within which any

appeal in collective proceedings is being finally determined.

No provision may be made about periods before the commencement of collective

proceedings.’.

Mr Mark Hoban

65

Clause  23,  page  26,  line  20,  leave out paragraph (a) and insert—

‘(a)	to make a single award of damages in respect of all or some of those

claims if the aggregate of the defendant’s liability to some or all class

members can be determined by a reasonably accurate assessment and

without proof by individual class members,’.

Mr Mark Hoban

66

Clause  23,  page  26,  line  25,  at end insert—

‘(3A)

The regulations must require the court, before making an order under subsection

(3), to provide the defendant with an opportunity to make submissions to the court

in respect of any matter relating to a proposed aggregate damages award.’.

Public Bill Committee: 12 January 2010

64

Financial Services Bill, continued

Mr Mark Hoban

67

Clause  23,  page  26,  line  38,  leave out from ‘applied’ to end of line 39 and insert ‘in

a manner that may reasonably be expected to benefit class members.’.

Mr Mark Hoban

68

Clause  24,  page  27,  line  19,  after ‘about’, insert ‘disclosure and’.

Mr Mark Hoban

69

Clause  24,  page  28,  line  12,  at end add—

‘(8)	Rules under subsection (2)(a) must require the court only to make a collective

proceedings order if it is satisfied that—

(a)	collective proceedings are the most appropriate means for the fair and

efficient resolution of the common issues of fact or law;

(b)	there is a person, certified or authorised body suitable to be authorised to

bring collective proceedings as representative claimant; and

(c)	the collective proceedings have a real prospect of success.

(9)	Rules under subsection (2)(d) and (e) must require the court, when considering

the suitability of any proposed representative, to be satisfied that such person—

(a)	would fairly and adequately represent the interests of the class;

(b)	does not have an interest that is in conflict with the interests of class

members;

(c)	has prepared a plan for the collective proceedings that sets out a method

to the satisfaction of the court for bringing the proceedings on behalf of

the class and for notifying class members of the fact and progress of the

proceedings;

(d)	has in place adequate resources for the conduct of the collective

proceedings, which shall include adequate resources for the conduct of

the collective proceedings (including any adverse costs awards).

(10)	Rules under subsection (2)(j) shall provide—

(a)	that the representative shall be liable for the claimants’ costs, except—

(i)	where the court authorises a sub-class representative, who shall

be liable for the costs associated with the determination of the

issues common to the sub-class;

(ii)	the costs of the determination of class members’ own individual

claims, for which individual class members shall be liable;

(b)	that the general rule shall be that the unsuccessful party shall pay the

costs of the successful party, although the court may make a different

order;

(c)	that security for costs shall be available against a claimant who is acting

as a representative if there is reason to believe that he will be unable to

pay the defendant’s costs if so ordered to do.

(11)	Rules under subsection (2)(h) must provide that a party to collective proceedings

may obtain disclosure of documents in the possession of class members other

than the representative with the permission of the court.

(12)	Rules under subsection (2)(i) must provide that—

Public Bill Committee: 12 January 2010

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Financial Services Bill, continued

(a)	a settlement of collective proceedings shall not take effect unless the

court conducts a hearing as to the fairness of the proposed settlement,

upon notice to the parties prescribed under the rules, and approves the

contents of the settlement agreement on terms which it considers to be

appropriate; and

(b)	when approved, a settlement—

(i)	binds every class member who has not opted out of or been

excluded from collective proceedings;

(ii)	binds every class member who has opted into collective

proceedings; and

(iii)

does not bind a party to the collective proceedings in any

subsequent proceeding between the party and a person who

opted out of, had been excluded from or who has failed to opt

into collective proceedings.

(13)	The rules may not permit a person to substitute as a representative in proceedings

brought on an “opt-out” basis unless such person is a body exercising public

functions and is authorised to act as representative by the Lord Chancellor under

section 18(7)(b).’.

Ian Pearson

85

Clause  25,  page  28,  line  34,  at end insert—

‘(8)	The Treasury may by order amend subsection (2)(b) so that, in Scotland, the

definition of “the court” is extended to include the sheriff.

(9)	An order under subsection (8) is subject to negative resolution procedure.’.

Member’s explanatory statement

This amendment gives the Treasury a power to enable collective proceedings to take place in Scot­

land before the sheriff.

Mr Mark Hoban

70

Clause  26,  page  29,  line  13,  leave out ‘to make rules’ and insert ‘for a scheme to be

made’.

Mr Mark Hoban

71

Clause  26,  page  29,  line  20,  leave out ‘make rules’ and insert ‘propose a scheme’.

Mr Mark Hoban

72

Clause  26,  page  29,  line  38,  leave out ‘rules are’ and insert ‘scheme order is’.

Mr Mark Hoban

73

Clause  26,  page  29,  line  41,  leave out ‘making rules’ and insert ‘proposing a

scheme’.

Public Bill Committee: 12 January 2010

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Financial Services Bill, continued

Mr Mark Hoban

74

Clause  26,  page  29,  line  43,  at end insert—

‘(11)

If the Authority proposes a scheme under this section, it shall apply to the court

for a consumer redress scheme order.

(12)	“Consumer redress scheme order” means an order imposing a consumer redress

scheme on relevant firms.

(13)	Any application by the Authority under this section shall—

(a)	attach a draft order setting out the rules of the proposed consumer redress

scheme in full; and

(b)	be notified to relevant firms and be published as required by the Civil

Procedure Rules or as otherwise directed by the court.

(14)	Upon an application under subsection (11), the court may make a consumer

redress scheme order if it is satisfied that—

(a)	the making of such an order represents the most appropriate means for

the fair and efficient resolution of the liability of relevant firms to pay

redress to consumers;

(b)	the consumer redress scheme is just and equitable; and

(c)	the consumer redress scheme order complies with section 404A.

(15)	At any time after the making of a consumer redress scheme order, any relevant

firm, the Authority, the ombudsman scheme or any other party permitted by

Court rules to do so, may apply to the court for—

(a)	any amendment to be made to the consumer redress scheme order, or

(b)	clarification or directions regarding the operation of the consumer

redress scheme;

and upon any such application the court may make any order it considers

appropriate (including making any amendment to the consumer redress scheme

order).’.

Mr Mark Hoban

75

Clause  26,  page  30,  line  2,  leave out ‘Rules under section 404’ and insert ‘a

consumer redress scheme order’.

Mr Mark Hoban

76

Clause  26,  page  30,  line  41,  leave out ‘rules’ and insert ‘consumer redress scheme

order’.

Mr Mark Hoban

77

Clause  26,  page  30,  line  45,  leave out ‘rules’ and insert ‘consumer redress scheme

order’.

Mr Mark Hoban

78

Clause  26,  page  30,  line  48,  leave out from beginning to end of line 2 on page 31

and insert—

‘(4)	Matters may not be set out in a redress scheme order as a result of subsection

(1)(d) if a court would not grant such relief in the circumstances specified.’.

Public Bill Committee: 12 January 2010

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Financial Services Bill, continued

Mr Mark Hoban

79

Clause  26,  page  31,  leave out lines 3 to 5.

Mr Mark Hoban

80

Clause  26,  page  31,  leave out lines 21 and 22.

Mr Mark Hoban

81

Clause  26,  page  31,  line  22,  at end insert—

‘404AA

Rules of court about consumer redress schemes

(1)	Rules of court may make provision about consumer redress schemes.

(2)	Such rules shall be designed with the objectives of ensuring, inter alia, that—

(a)	applications concerning consumer redress schemes are heard and

determined expeditiously; and

(b)	notice of such applications is published so as to bring the application to

the attention of those who may be affected by the consumer redress

scheme.

(3)	The rules may in particular—

(a)	make provision about applications for or in connection with consumer

redress scheme orders;

(b)	make provision about the notice to be given to relevant firms regarding

such applications;

(c)	make provision about the publication of such applications, so as to bring

the application to the attention of those persons who may be affected by

a consumer redress scheme order;

(d)	set out the criteria to be applied by the court when deciding whether to

make a consumer redress order (or the terms of such an order including

the rules of the consumer redress scheme);

(e)	make provision for any other matter relating or incidental to the proper

management and conduct of the consumer redress scheme;

(f)	make provision for the court to consider whether other means may be

more appropriate for the fair and efficient resolution of the liability of

relevant firms to pay redress to consumers, and to give directions as it

considers necessary.’.

Mr Mark Hoban

82

Clause  26,  page  31,  leave out lines 32 to 38 and insert—

‘(2)	If a consumer considers that a relevant firm has failed to make an accurate

determination in accordance with a consumer redress scheme, the consumer may,

in respect of that determination or failure, make a complaint under the

ombudsman scheme.’.

Mr Mark Hoban

83

Clause  26,  page  33,  leave out lines 7 to 9 and insert—

‘(c)	natural persons who, in the matters to which the consumer redress

scheme relates, are acting for purposes which are outside their trade

business or profession;’.

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Revised 12 January 2010