Collective redress in england & wales

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148^ The Financial Services and Markets Act 2000.

149^ Annual report and accounts for the year ended 31 March 2016 (Financial Ombudsman Service, 2016).

150^ See http://www.ombudsman-complaints-data.org.uk/

151^ The test case procedure has not been applied, although one insurance firm did seek to invoke the test case procedure over the impact of the Icelandic volcano on travel insurance claims, but the ombudsman said it was inappropriate in the circumstances of the particular case.

152^ These procedures are described at C Hodges, I Benöhr and N Creutzfeldt-Banda (eds), Consumer ADR in Europe (Hart Publishing, 2012), 278 ff.

153^ R Thomas, The impact of PPI mis-selling on the Financial Ombudsman Service (Financial Ombudsman Service, 2016).

154^ R Thomas, The impact of PPI mis-selling on the Financial Ombudsman Service (Financial Ombudsman Service, 2016).

155^ See G. Hickinbottom, ‘Benzodiazepine litigation’ in C. J. S. Hodges, Multi-Party Actions (Oxford, 2001.

156^ Information kindly supplied by J. Meltzer of Lovells LLP, and also J. Stuart-Smith QC at a conference at the Centre for Socio-Legal Studies, Oxford University in December 2006.

157^ http://www.which.co.uk/reports_and_campaigns/money/campaigns/Banking%20and%20credit/Bank%20charges/banl_charges_campaign_559_74996.jsp accessed January 2008.

158^ See figures quoted in R. P. Mulheron, Reform of Collective Redress in England and Wales: A Perspective of Need (Civil Justice Council, 2008), table 16.

159^ http://www.oft.gov.uk/advice_and_resources/resource_base/market-studies/personal2.

160^ Claims Management Services Regulation: Claims in Respect of Bank Charges: Guidance Note 2007.

161^ Financial Services and Markets Act 2000, ss. 382 and 383.

162^ M. Hickman, ‘FSA could ‘force banks to return penalty charges’’, The Independent, 20 October 2007.

163^ The Office of Fair Trading v. Abbey National PLC and 7 others [2008] EWHC 875.

164^ Office of Fair Trading v Abbey National plc and Others [2009] UKSC 6.

165^ Report on the crisis of the Equitable Life Assurance Society, 2006/2026(INI), A6-0203/2007.

166^ European Parliament Resolution on the crisis of the Equitable Life Assurance Society, 2006/2026(INI), P6_TA(2006)0293.

167^ See http://www.which.co.uk/reports_and_campaigns/consumer_rights/campaigns/Football%20shirts/index.jsp.

168^ The above para is taken from C Hodges, The Reform of Class and Representative Actions in European Legal Systems: A New Framework for Collective Redress in Europe (Hart Publishing, 2008).

169^ Certain information kindly supplied by Deborah Prince of Which? and Martin Rees and Kate Vernon of DLA Piper llp, which acted for JJB Sports plc.

170^ Oft decision dated 1 August 2003 No. CA98/06/2003; appealed as Allsports Limited, JJB Sports plc v Office of Fair Trading [2004] CAT 17; Umbro Holdings Ltd, Manchester United plc, Allsports Limited v Office of Fair Trading [2005] CAT 22; JJB Sports plc v Office of Fair Trading [2006] Court of Appeal EWCA Civ 1318. The fines initially totalled £18.57 million but were reduced on appeal to £15.49 million.

171^ Judgment on Penalty, 19 May 2005, para. 58.

172^ Judgment, 1 October 2004, para. 28.

173^ The Notice of a Claim for Damages is at http://www.catribunal.org.uk/archive/casedet.asp?id=127.

174^ See the OFT’s guidance as to the appropriate amount of a penalty, at http://www.oft.gov.uk/shared_oft/business_leaflets/ca98_guidelines/oft423.pdf.

175^ See The Lawyer, 9 January 2008.

176^ Details at http://www.which.co.uk/reports_and_campaigns/consumer_rights/campaigns/Football%20shirts/index.jsp.

177^ OFT Press Release, http://www.oft.gov.uk/news/press/2007/170-07.

178^ J. Moore, ‘OFT pays Morrisons £100,000 damages over price-fixing claims’, The Independent, 24 April 2008.

179^ N. Rose, ‘Class actions will make claims easier’ Gazette, 21 February 2008.

180^ Press release, Office of Fair Trading, 1 August 2007. British Airways was fined £121.5 million by the British authorities, and $300 million by the U.S. Federal Trade Commission.

181^ See OFT’s Guidance as to the appropriate amount of a penalty, Office of Fair Trading, 2004.

182^ Financial Times, 23 February 2008.

183^ C. Ruckin, ‘Cohen Milstein lands $200m BA-Virgin settlement’, Legal Week, 15 February 2008.

184^ D. Fortson, ‘UK businesses braced for class action suits after BA and Virgin pay out $200m’, The Independent, 16 February 2008.

185^ Case Reference CE/9578-12

186^ Case number 1257/7/7/16; catribunal.org.uk/237-9255/1257-7-7-16-DorothyGibson.html

187^ For a detailed analysis of the case: see J. Webber, S. Charlwood, C. Rawnsley, ‘Launch of First UK Opt-Out Class Action’ Mondaq, 16 March 2016.

188^ Commission Decision of 19/XII/2007 (COMP/34.579 Mastercard, COMP/36.518 Eurocommerce and COMP/38.580 Commercial Cards

189^ Case number 1266/7/7/16; catribunal.org.uk/237-9391/1266-7-7-16-Walter-Hugh-Merricks-CBE-.html

190^ See MHRA Press Release, 8 April 09.

191^ Press release Leeds businessman receives record jail sentence over £2.2m recycling fraud, Environment Agency, 18 July 2016.

192^ See Egg Banking (PPI misselling, Dec 08), see para 2.6(5), at http://www.fsa.gov.uk/pubs/final/egg.pdf; AWD Chase de Vere (unsuitable advice regarding its pension transfer, pension annuity and income withdrawal business, Nov 08), see para 2.5(4), at http://www.fsa.gov.uk/pubs/final/awd.pdf; Alliance and Leicester (PPI misspelling, Oct 08), see para 2.7(5), at http://www.fsa.gov.uk/pubs/final/alliance_leicester.pdf; GE Capital Bank (PPI misspelling, Jan 07), see paras 2.4 and 2.6, at http://www.fsa.gov.uk/pubs/final/gecb.pdf; Abbey National (complaints mishandling, May 05), see para 2.9(1), at http://www.fsa.gov.uk/pubs/final/abbey_25may05.pdf; Capita Trust Company (precipice bonds misspelling, October 04), see para 2.9(3), at http://www.fsa.gov.uk/pubs/final/capita_20oct04.pdf.

193^ Note that redress can also be agreed with a firm without preceding enforcement action. Personal communications between the author and members of the Enforcement and Financial Crime Division of the FCA, noted in the Acknowledgements to this book.

194^ See recently Enforcement Annual Performance Account 2010/11 (FSA, 2011), para 21, at http://www.fsa.gov.uk/pubs/annual/ar10_11/enforcement_report.pdf.

195^ Financial services mis-selling: regulation and redress (National Audit Office, 2016), HC Paper No.851. The figure excludes an interest rate hedging products scheme and other schemes which were established in 2013.

196^ See eg the CPP press release: http://www.fsa.gov.uk/library/communication/pr/2012/102.shtml. In 2012 the FCA secured over £150 million in redress for consumers.

197^ See paras 10-18 of the October 2012 BoS Final Notice for details re the SVR and cap issue. The firm was fined for its failure to keep accurate records which had affected the compensation programme: https://www.fca.org.uk/publication/final-notices/bank-of-scotland.pdf. Details of the compensation programme can also be found in this document, which describes the requirements included in the firm’s permission i.e. the variation of permission: http://www.fsa.gov.uk/pubs/other/vvop.pdf.

198^ The Notice mentions that £20m was erroneously paid out to customers and the firm reportedly stated that it would set aside £500m for compensation: https://www.lovemoney.com/news/11197/halifax-to-pay-500m-to-overcharged-customers-

199^ See Capita FML Final Notice dated Nov 2012: https://www.fca.org.uk/publication/final-notices/capita-financial-managers.pdf

200^ Consumer redress scheme in respect of unsuitable advice to invest in Arch cru funds: Consultation Paper (FSA, CP12/9, April 2012), available at http://www.fsa.gov.uk/static/pubs/cp/cp12-09.pdf.

201^ Interest Rate Hedging Products. Pilot Findings (FSA, 31 January 2013), http://www.fsa.gov.uk/static/pubs/other/interest-rate-swaps-2013.pdf.

202^ Enforcement Annual Performance Account 2011/12 (FSA, 2012), para 19, at http://www.fsa.gov.uk/static/pubs/annual/ar11-12/enforcement-report.pdf.

203^ FCA Press release at http://www.fca.org.uk/news/fca-fines-credit-suisse-and-yorkshire-building-society-for-financial-promotions-failures.

204^ See Compensation—card security product holders invited to vote on scheme (FCA, 2015), at https://www.fca.org.uk/news/affinion-scheme-for-card-security-product-holders.

205^ Compensation Scheme results -https://www.fca.org.uk/news/news-stories/card-security-product-holders-compensation-scheme-now-closed

206^ Financial services mis-selling: regulation and redress (National Audit Office, 2016), HC Paper No.851, para 4.5.

207^ This excludes the interest rate hedging products scheme and other schemes which were established in 2013.

208^ Press release, 2 November 2016, https://www.fca.org.uk/news/press-releases/debt-purchaser-motormile-finance-agrees-redress-package

209^ http://www.mmile.com/RedressProgramme.aspx

210^ Press release, 8 November 2016, https://www.fca.org.uk/news/press-releases/review-royal-bank-scotland-treatment-customers-referred-global-restructuring-group

211^ House of Commons Treasury Committee, oral evidence of Financial Conduct Authority, 8 November 2016, HC 812.

212^ Press release, 8 November 2016, http://www.rbs.com/news/2016/november/GRG.html

213^ A similar approach was adopted in a number of subsequent similar cases against other companies, see Sanctions Committee Adjudications dated 8 May 2008 at http://www.ofcom.org.uk/tv/obb/ocsc_adjud visited 26 May 2008.

214^ Decision of Ofcom Content Sanctions Committee, 26 September 2007 at www.ofcom.org.uk.

215^ At the time of writing, it appears that GMTV may not have repaid consumers in full: see R Taylor at www.ofcomwatch.co.uk, visited 11 May 2008. The lesson to be drawn would be that the regulator should have the power to accept enforceable undertakings or some other power so as to oversee the repayment. To be Updated

216^ Consultation on a proposed new power for Ofgem to compel regulated energy businesses to provide redress to consumers (Department of Energy and Climate Change, 2012), para. 13.

217^ Enforcement Overview 2014/15 (Ofgem, 2015).

218^ Enforcement Overview 2015/16 (Ofgem, 2016). See M Canto-Lopez, ‘Ofgem’s Recent Trends in Enforcement: Settlements, Redress and the Consumer’s Interest’ (2016) 21(2) Utilities Law Review 66.

219^ Where appropriate, voluntary payments to charitable organisations have also formed a part of alternative action work. Perhaps most notably, Ofgem used alternative action to secure a payment of £3 million from National Grid to the fuel poverty charity National Energy Action, because National Grid had failed to meet its target for repairing non-urgent gas escapes on its gas distribution networks. In July 2015, another piece of alternative action work resulted in securing free energy for over 1,000 directly affected customers. The customers received free energy until the supplier involved had fully implemented Energy Ombudsman remedies that had previously been agreed for those customers.

220^ These were paid to entities such as Citizens Advice Scotland, Citizens Advice England and Wales (includes funding for Citizens Advice Bureau programmes such as Energy Best Deal Extra and Energy Best Deal Extra Prepayment meter project), the Carbon Trust, StepChange and Business Debtline.

221^ https://www.ofgem.gov.uk/publications-and-updates/notice-decision-impose-financial-penalty-following-investigation-compliance-drax-article-141-electricity-and-gas-community-energy-saving-programme-order-2009

222^ https://www.ofgem.gov.uk/publications-and-updates/notice-decision-impose-financial-penalty-following-investigation-compliance-intergen-article-141-electricity-and-gas-community-energy-saving-programme-order-2009

223^ Ofgem’s first priority in allocating redress is to compensate customers directly affected by the breach identified. In these cases however no customers were directly affected by the breach identified, therefore redress was allocated to charities.

224^ https://www.ofgem.gov.uk/system/files/docs/2016/11/voluntary_redress_consultation_response_-_nea_aug_2016.pdf, 9. More information about the HIP can be found at http://www.nea.org.uk/hip/.

225^ https://www.ofgem.gov.uk/publications-and-updates/co-operative-energy-pay-1-8-million-customer-service-failings

226^ Details of Ofgem’s decision are available at: http://www.ofgem.gov.uk/Media/PressRel/Documents1/EDF%20press%20notice%20March%209%202012.pdf

227^ Press release, ‘Ofgem secures £1.7 million for consumers following E.ON error’ (Ofgem, 27 November 2012) http://www.ofgem.gov.uk/Media/PressRel/Documents1/20121127_EON_Press_Release.pdf

228^ The Engage Fund is run in partnership with Age UK Group helps fund services to maximise incomes of older people by providing benefits advice and financial help through benefits health checks carried out either face to face or by telephone in local Age UK offices enabling some to be lifted out of fuel poverty.

229^ Annual Report and Accounts 2013-14 (Office of Gas and Electricity Markets, 2014), 11.

230^ Press release, ‘ScottishPower agrees to pay customers £8.5 million following Ofgem sales investigation’ (Ofgem, 22 October 2013).

231^ Press release, ‘Npower agrees to pay customers £3.5 million to help vulnerable customers following Ofgem energy sales investigation’ (Ofgem, 20 December 2013).

232^ Press release, ‘Npower publishes apology and promises to pay £1m to vulnerable consumers after Ofgem intervened on poor service’ (Ofgem, 3 December 2013).

233^ Press release, ‘Ofgem calls on suppliers to take action on over £400 million they hold from customers' closed accounts’ (Ofgem, 28 February 2014), at https://www.ofgem.gov.uk/press-releases/ofgem-calls-suppliers-take-action-over-%C2%A3400-million-they-hold-customers-closed-accounts.

234^ Press release, ‘Closed account balances – advice for consumers’ (Ofgem, 28 February 2014), at https://www.ofgem.gov.uk/news/closed-account-balances-%E2%80%93-advice-consumers; ‘Energy firms told to return £400m from closed accounts’, BBC News, 28 February 2014.

235^ Press release, ‘British Gas to compensate customers over mis-selling’ (Ofgem, 4 July 2014), at https://www.ofgem.gov.uk/news/british-gas-compensate-customers-over-mis-selling.

236^ Notice of intention to impose a financial penalty pursuant to section 30A(3) of the Gas Act and 27A(3) of the Electricity Act 1989 (Gas and Electricity Markets Authority, 18 December 2015).

237^ Press release, E.ON pays £3.1m after its agents missed appointments (Ofgem, 22nd September 2016), https://www.ofgem.gov.uk/publications-and-updates/e-pays-3-1m-after-its-agents-missed-appointments

238^ See http://www.consumerfutures.org.uk.

239^ Consultation on a proposed new power for Ofgem to compel regulated energy businesses to provide redress to consumers (Department of Energy and Climate Change, April 2012), para 11.

240^ Response to Consultation on Private Actions in Competition law (Consumer Focus, July 2012).

241^ under the Water Industry Act 1991, s 203(2).

242^ Notice in writing dated 5 June 2014, under and in accordance with section 22A(4) WIA91, of its proposal to impose a nominal penalty of £1 on Thames Water.

243^ Available at http://www.ofwat.gov.uk/wp-content/uploads/2016/02/not_fne20140722tmssewerflood.pdf

244^ Press release ‘Betfred to pay over £800,000 following licence review’ Gambling Commission, 14.6.2016.

245^ Enforcement Undertakings accepted by the Environment Agency (Environment Agency, 2016), https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/546750/LIT_5789.pdf

246^ The Financial Conduct Authority: Approach to Regulation (Financial Services Authority, 2011), para 5.12.

247^ R Thomas, The impact of PPI mis-selling on the Financial Ombudsman Service (Financial Ombudsman Service, 2016).

248^ FCA August 2014 - Thematic Review TR14/14 - Redress for payment protection insurance (PPI) mis-sales.

249^ FCA November 2015 – CP15/39 Rules and guidance on payment protection insurance complaints.

250^ Financial Ombudsman service 2014/15 Annual Review.

251^ FCATR14/14

252^ Financial services mis-selling: regulation and redress (National Audit Office, 2016), HC Paper No.851.

253^ R Thomas, The impact of PPI mis-selling on the Financial Ombudsman Service (Financial Ombudsman Service, 2016).

254^ Press release, Commitment to help consumers agreed at PPI summit (British Bankers Association, 23/04/2012), at http://www.bba.org.uk/media/article/commitment-to-help-consumers-agreed-at-ppi-summit.

255^ For the FCA’s general approach see The Financial Conduct Authority: Approach to Regulation (Financial Services Authority, 2011).

256^ The cost of redress: the lessons to be learned from the PPI mis-selling scandal (Citizens Advice Bureau, March 2014).

257^ FSA, Treating Customers Fairly – Towards Fair Outcomes (2006) 7. Uphold rates differed between institutions. In cases handled by the FOS between 1 July and 31 December 2011they ranged between 6% and 100%: Complaints data on individual financial businesses (FOS, February 2012). The average uphold rate in the 169,132 new cases against 221 businesses in the first half of 2016 was 48% – ranging from 3% to 92% across the individual businesses: Ombudsman news - issue 134 (FOS, July 2016).

258^ E Ferran, ‘The New Mandate for the Supervision of Financial Services Conduct’ (2012) Current Legal Problems 1-43.

259^ FS Act 2012, cl 22, inserting FSMA s137C.

260^ http://www.fsa.gov.uk/pages/Library/Corporate/Annual/ar09_10.shtml . See Finalised guidance. Payment protection products. FSA/OFT joint guidance (Office of Fair Trading and FSA, 2013).

261^ R (on the application of the British Bankers Association) v Financial Services Authority [2011] EWHC 999 (Admin); [2011] Bus LR 1531.

262^ Payment protection products. FSA/OFT joint guidance (FCA and OFT, 2013).

263^ Financial services mis-selling: regulation and redress (National Audit Office, 2016), HC Paper No.851.

264^ Payment protection insurance customer contact letters (PPI CCLs) - fairness, clarity and potential consequences (FSA, July 2012), FG12/17.

265^ Encouraging consumers to claim redress: evidence from a field trial (FCA, 2013).

266^ Several reasons were suggested. First, many consumers had already been provided with a refund from the firm on their own initiative. Second, a number may also have been happy with the sales process and not felt in need of redress. Third, the potential value of redress was low, the average redress due was only £21. Fourth, the relationship between the firm and the consumer had already ended, which may mean the firm has an out-of-date address or that the consumer is less likely to open the envelope.

267^ With the control letter the middle-aged responded the least and older age groups responded far more. But the pattern changed for the best letter: the young respond the least and response increased with age. So the treatments had the greatest relative effect on the middle-aged, who are arguably the busiest.

268^ TR13/7 - Payment protection insurance complaints: report on the fairness of medium-sized firms’ decisions and redress (FCA, August 2013).

269^ Assessing the quality of investment advice in the retail banking sector. A mystery shopping review (FSA, February 2013). Findings included that the adviser gave the customer unsuitable advice in 11% of cases and that the adviser did not gather enough information to make sure their advice was suitable, so it was not possible to assess whether the customer received good or poor advice, in 15% of cases.

270^ The FSA imposed a financial penalty of approximately £4.3 million on Lloyds TSB Bank, Lloyds TSB Scotland and Bank of Scotland for failure to pay redress promptly to PPI complainants between 5 May 2011 and 9 March 2012. The Final Notice contains detailed findings by the FSA of inadequacies in the implementation of the redress payments process. The Final Notice focused on failures in the planning of the redress payments process, a reliance on manual processes in the face of overwhelming numbers of complaints (which hampered the ability to track and check the processing of payments), a lack of quality control and inadequate resourcing of parts of the PPI redress process. The FSA highlighted that a full reconciliation process had been conducted to ensure that customers had not been disadvantaged as a result of the delays in payments being made. The FSA fined the Co-operative Bank plc £113,300 in January 2013 for its failure to handle a number of PPI complaints. The FCA fined Lloyds Banking Group £117 million for mishandling thousands of PPI complaints between March 2012 and May 2013, and extracted an agreement by the bank to review 1.2 million complaints, for which a further £710 million was added to the £12 billion already set aside to cover repayments. The FCA fined Clydesdale Bank £20,678,300 (after a 30% discount for early settlement) on 15 April 2015 for failures in processes for handling 126,000 PPI complaints between May 2011 and July 2013, in which 42,200 may have been rejected unfairly and 50,900 resulted in inadequate redress.

271^ R Thomas, The impact of PPI mis-selling on the Financial Ombudsman Service (Financial Ombudsman Service, 2016).

272^ Financial services mis-selling: regulation and redress: Forty-first Report of Session 2015-16 (HC Paper No.847: House of Commons Committee of Public Accounts, May 2016).

273^ Financial services mis-selling: regulation and redress (National Audit Office, 2016), HC Paper No.851.

274^ The NAO found that ‘In 2014-15, 74% of complainants said it handled their complaints efficiently and professionally.’ Ibid, para 4.9.

275^ R Thomas, The impact of PPI mis-selling on the Financial Ombudsman Service (Financial Ombudsman Service, 2016), para 1.7.

276^ Financial services mis-selling: regulation and redress (National Audit Office, 2016), HC Paper No.851.

277^ See recently Claims Management Regulation. Proposals for amendment to the Conduct of Authorised Persons Rules (Ministry of Justice, August 2012); CAB evidence briefing: The claims pests - CAB evidence on PPI and claims-management companies (Citizens Advice Bureau, November 2012); Claims Management Regulation: Approach and Enforcement of the Referral Fee Ban (Ministry of Justice, November 2012); Press release ‘Rogue PPI claim companies targeted by fines and toughened regulations’ (Ministry of Justice, 21 November 2012). Payday Lending Compliance Review. Interim Report (OFT, November 2012), OFT1466; The PPI Claims market: Dealing with malpractice (Ministry of Justice, February 2013); Rogue PPI Claim Companies Targeted by Fines and Toughened Regulations (Ministry of Justice, 21 November 2013).

278^ The cost of redress: the lessons to be learned from the PPI mis-selling scandal (Citizens Advice Bureau, March 2014).

279^ The main offices were the Claims Management Regulator, the Financial Conduct Authority, the Information Commissioner, and local authorities’ Trading Standards Departments. The number of CMCs peaked at 3,400 in 2011 and fell to 2,300 by November 2011: Press release: Rogue PPI Claim Companies Targeted by Fines and Toughened Regulations (Ministry of Justice, 21 November 2013).

280^ Financial Services (Banking Reform) Act 2013, s 139.

281^ Financial services mis-selling: regulation and redress (National Audit Office, 2016), HC Paper No.851.

282^ CP 15/39, para 2.5.

283^ Rules and guidance on payment protection insurance complaints: feedback on CP15/39 and further consultation (CP16/20: FCA, August 2016). The FCA also sought views on making rules and guidance on handling PPI complaints in light of the Supreme Court judgment in Plevin v Paragon Personal Finance Ltd. Comments by 11 October 2016. 

284^ Para 2.18 of CP 16/20 noted that: ‘We have always acknowledged that some consumers may reasonably prefer to pay for the assistance of a CMC in making their complaint. We also acknowledge that some CMCs have played an effective role in identifying and challenging some examples of poor complaint handling by firms, and that our own supervisory work has benefitted from the examples these CMCs have provided to us.’

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