The End of the FOS, the CIO and the SCT

The End of the FOS, the CIO and the SCT

The Government has tonight announced that the FOS, the CIO and the SCT are all to be replaced by a new Government Authority to be called The Financial Complaints Authority.  My impression is that it will be able to award compensation of up to $1M.

This a very significant development both with respect to the specific world of external dispute resolution schemes and more generally as to the role that Courts will play, in the future, with respect to financial services related disputes.

An interesting point is that the Government claims that its decision is based upon the Ramsay Review into EDR Schemes.  As far as I’m aware, the final report with respect to that Review has not been released in circumstances where the Interim Report had been interpreted as making a recommendation to the effect that the FOS (and not a Government body) should be the sole dispute resolution scheme.