Controversial element of Financial Services Bill dropped
The Government has dropped its controversial plans in the Financial Services Bill to allow class actions against financial institutions.
As part of the rush to get the Bill enacted before Parliament is dissolved, Lord Myners has put forward amendments to remove clauses 18 to 25 from the Bill.
Mathew Rutter, financial services partner at Beachcroft, said: "When the Bill was first published, we called it a dangerous cocktail. With some of the more toxic elements removed, and some equally dangerous amendments headed off, the Act is not as lethal as it might have been. However, enough unpleasant ingredients are left in it to leave a sour taste.
"We are delighted that pressure from the financial services sector and from firms such as Beachcroft on this issue appears to have been successful. This will come as a great relief to firms, not because they oppose the principle of redress for consumers, but because these provisions had not been fully thought through, and much of the detail needed to assess them was missing. However, the tide seems to be turning in favour of class actions in some form in the UK, so this is unlikely to be the last we hear of them. It will be important, however, to ensure that everyone has time to consider such proposals in detail, rather than trying to rush measures through and regretting it later."
