John Bramhall & Karen Boto predict potential future trends in litigation
The Financial Services Act (the Act) was passed on 8 April 2010, and includes provisions relating to the introduction of consumer redress schemes in the financial services sector. The Act reserves the power to the Treasury to broaden the provisions to cover other industries. For the moment, the controversial proposals to allow consumers to issue collective proceedings have been dropped. It does, however, remain possible that those proposals may be reintroduced. Both consumer redress schemes and collective actions could have a significant effect on litigation, but will we really see a trend towards US-style class actions?
Consumer redress schemes
Previously the FSA had to seek authorisation from the Treasury before pursuing consumer redress schemes. Under the Act the Financial Services Authority (FSA) can on its own authority require firms to operate a consumer redress scheme where (i) it appears (to the FSA) that there may have been a “widespread or regular failure” by a firm relating to any regulated activity; and (ii) consumers have suffered loss as a result.
Under a consumer redress scheme a firm
