Professional and financial risks
The Price and Value Outcome – the FCA publishes its year one insights
The Consumer Duty was introduced at the end of July 2023 and has applied to closed products from the end of July 2024. One of the cornerstones of the Consumer Duty is the price and value outcome. The FCA defines the price and value outcome as a requirement on firms to make sure the price customers pay is reasonable compared to the benefits they receive. The FCA has published its insights from the first year on the implementation of the outcome and its supervisory activity in relation to cash savings, guaranteed asset protection (or GAP insurance) and platform cash.
Read moreLitigation funder wins nearly £1m in D&O claim
Manolete Partners Plc, an insolvency litigation finance company, has successfully claimed against the former director of Just Recruit Group Ltd (Just Recruit) and awarded £918,590. The Insolvency and Companies Court of the High Court found that the director of Just Recruit, Norman Freed, had breached his directorial duties to the Company during the business's financial collapse.
Read morePrincipals and their Appointed Representatives – are principals meeting their supervision obligations? Maybe
The FCA has published its findings into how principals are doing when it comes to the new FCA rules (effective from 8 December 2022) for overseeing/supervising appointed representatives (ARs). The findings paint a mixed picture and will be relevant to those in the FCA regulated market involved with networks which means not just advice firms but also brokers (mortgage brokers and insurance brokers) that operate network structures.
Read moreUse the (en)force(ment) - FCA enforcement data shows a sharp increase in s.166 reviews
The FCA has published its annual report and accounts for the year 2023 / 2024. This is a voluminous document running to 170 pages. For the purposes of this blog, we're focussing on some interesting data nestled in an appendix concerning the use of s.166 of FSMA.
Read moreBHS directors ordered to pay over £100m in respect of trading misfeasance redress
On 19 August 2024, the High Court handed down its quantum decision in Wright v Chappell [2024] EWHC 2166 (Ch), which for the first time sets out the method for quantifying loss relating to "trading misfeasance" claims.
Read moreFCA market study into protection product commissions
The Financial Conduct Authority (FCA) has announced a market study into the commission structure associated with protection products. It aims to assess whether the commissions paid to advisors for recommending such products deliver value for money and ensure positive outcomes for consumers. The study will be launched later this year.
Read morePensions Ombudsman publishes corporate plan 2024/25
The Pensions Ombudsman (TPO) has recently released its Corporate Plan for 2024/25 which sets out key priorities aimed at addressing the increasing demand for its services and the challenges that come with it.
Read moreLawyers Covered - August 2024
It can be tough for busy lawyers to find enough time to service clients, make it safely through the regulation obstacle course, win new work and keep up-to-date with developments, but we've got you covered! Welcome to the August edition of our Lawyers Liability & Regulatory Update, in which we highlight the last month's key developments affecting lawyers and the professional risks they face.
Read moreSRA introduces new rules to restrict fees recoverable in financial mis-selling claims
The SRA has taken steps to bring law firms and CMCs into line through the introduction of a cap on fees solicitors are able to recover from their clients when acting on their behalf in relation to financial mis-selling claims.
Read moreNavigating the advice-guidance boundary continued...
In December 2023, the FCA released a Policy Paper (the Paper) which included its proposals for closing the gap between 'holistic advice' and 'information and guidance'. The intention was to "smooth the cliff edge between holistic advice and information and guidance to create a continuum of support." Recent reports indicate that the FCA will shortly be announcing its plan to address this gap.
Read moreThe BSPS saga: the redress scheme two years later
The Financial Conduct Authority (FCA) has reported that fewer than one third of former British Steel Pension Scheme (BSPS) members deemed to have received unsuitable advice to transfer out have actually received redress following the introduction of the redress scheme under s.404 of FSMA. Of the £49m the FCA anticipated would be paid out through the scheme (this of itself being a revised figure), only £8.7m has so far been paid out to affected members.
Read moreThe road lengthens for vehicle finance complaints - FCA consults on extending timeframes further
The FCA has published a consultation paper inviting discussion on a further extension to complaints handling rules for motor finance complaints. This comes as a result of the FCA admitting that it will not be able to set out the next steps they intend to take in this area by the anticipated deadline of 24 September 2024.
Read moreLawyers Covered - July 2024
It can be tough for busy lawyers to find enough time to service clients, make it safely through the regulation obstacle course, win new work and keep up-to-date with developments, but we've got you covered! Welcome to the July edition of our Lawyers Liability & Regulatory Update, in which we highlight the last month's key developments affecting lawyers and the professional risks they face.
Read moreSRA consults the legal sector on proposed changes to their fining framework
The SRA is conducting a consultation from the 28 June to 20 September 2024 on their proposed changes to the SRA Fining Guidance. The regulator is seeking feedback in response to the new unlimited fining powers granted under the Economic Crime and Corporate Transparency Act (ECCTA 2023).
Read moreEmbracing digital change: the new reporting functions for the Financial Reporting Council
The Financial Reporting Council (FRC) has announced two new functions, to better understand its existing market intelligence and to deliver on UK growth and competition. However, following the King's speech this week, and with the industry expecting a new, more powerful regulator in the Audit, Reporting and Governance Authority (ARGA) under this new Labour government, are these new functions simply a steppingstone to wider auditing reform?
Read moreThe What, the How, and the Responsibility – Liability of Principals for actions of Appointed Representatives under FSMA s39
The Court of Appeal has recently affirmed the views of the lower court on the liability of principals for their appointed representatives' actions in KVB Consultants Limited v Jacob Hopkins McKenzie Limited and others.
Read moreFCA Review of Consumer Duty Outcomes Monitoring Across the Insurance Industry
In this blog we take a look at the FCA's recent review of Consumer Duty outcomes monitoring across the insurance sector.
Read moreEntering the codified world – Code of Conduct for directors
The Institute of Directors (IoD) has recently published a consultation paper on a Code of Conduct for Directors (the Code) to assist directors in making better decisions given their increasingly "vital, complex and challenging" roles and responsibilities.
Read moreLawyers Covered - June 2024
It can be tough for busy lawyers to find enough time to service clients, make it safely through the regulation obstacle course, win new work and keep up-to-date with developments, but we've got you covered! Welcome to the June edition of our Lawyers Liability & Regulatory Update, in which we highlight the last month's key developments affecting lawyers and the professional risks they face.
Read moreMoney Covered: June 2024 – the FCA's Consumer Duty – almost one year on
Welcome to Money Covered, a monthly podcast from RPC aimed at those dealing with complaints, claims and risk management in the financial services sector.
Read moreThe Financial Ombudsman Service Proactive Settlement Scheme - Here to Stay
The Financial Ombudsman Service's (FOS) Proactive Settlement Scheme (the Scheme), designed to encourage businesses to settle customer complaints quickly, is here to stay following its trial introduction in April 2023. The Scheme was trialled as a way to encourage early settlement allowing businesses to make a settlement offer in response to complaints referred to the FOS within 21 days, provided they notified the FOS of their intention to do so within 14 days of being told that a complaint had moved to the investigation stage. The FOS has now confirmed that the Scheme will become a permanent feature of their complaint resolution process.
Read moreAnother failed FOS judicial review on the issue of whether a customer was an "eligible complainant"
The High Court has rejected a judicial review claim arguing that (1) a complainant was not an eligible complainant having identified themselves as an "elective professional client" and (2) the FOS' approach to redress (adopting the FTSE UK Private Investors Income Total Return Index) and contributory negligence was irrational. The High Court judgment is a further example of the courts endorsing FOS' approach to complaints and its wide jurisdiction. The judgment is hot on the heels of the Court of Appeal judgment in Options last month. It is also a further example of permission having been granted to proceed with a judicial review and the increased appetite for respondent firms to challenge FOS, likely to be fuelled by the ever increasing FOS redress caps.
Read moreLawyers Covered - May 2024
It can be tough for busy lawyers to find enough time to service clients, make it safely through the regulation obstacle course, win new work and keep up-to-date with developments, but we've got you covered! Welcome to the May edition of our Lawyers Liability & Regulatory Update, in which we highlight the last month's key developments affecting lawyers and the professional risks they face.
Read moreFiduciary Duties Post Liquidation
In the recent case of Mitchell v Al Jaber [2024] EWCA Civ 423, the Court of Appeal confirmed that a shareholder and director may still be subject to a fiduciary duty when purporting to transfer company property, even after the company enters liquidation. The decision was made in relation to British Virgin Island (BVI) law, but on the basis of English case authorities.
Read moreFinfluencers update: Reality TV stars face FCA charges
The FCA has charged 9 individuals for allegedly promoting or advising on contracts for difference ("CFDs"), a financial product where investors bet on the price of assets, via their social media accounts. The defendants include several former Love Island TV stars including: Biggs Chris, Jamie Clayton, Rebecca Gormley and Eva Zapico, as well as The Only Way is Essex star Lauren Goodger
Read moreICAEW announces key Professional Indemnity Insurance changes, whilst scaling back on the full suite of proposed changes
The ICAEW has confirmed some of the changes to its professional indemnity insurance (PII) requirements, which will come into effect from 1 September 2024.
Read moreRaising standards, welcoming views and closing the gap in tax advice
This article considers the Government's attempt to kick incompetent, unprofessional, unscrupulous and substandard tax advisors out of the market.
Read moreFCA publishes Consumer Duty 'Dear CEO' letters
The FCA has published a series of 'Dear CEO' letters, setting out its expectations ahead of the the Consumer Duty's implementation in respect of closed products and services. The letters are sent ahead of the 31 July 2024 deadline.
Read moreMoney Covered: The Week That Was – 10 May
Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.
Read moreMultiple Dwellings Relief - a problem for tax advisers?
Recent cases before the tax tribunal have highlighted an issue for tax advisers involved with multiple dwellings relief – is the issue of multiple dwellings relief about to impact professionals outside of the legal industry?
Read moreMoney Covered: The Week That Was – 3 May
Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.
Read moreLawyers Covered - April 2024
It can be tough for busy lawyers to find enough time to service clients, make it safely through the regulation obstacle course, win new work and keep up-to-date with developments, but we've got you covered! Welcome to the March edition of our Lawyers Liability & Regulatory Update, in which we highlight the last month's key developments affecting lawyers and the professional risks they face.
Read moreMoney Covered: The Week That Was – 26 April
Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.
Read moreDerivative actions – The Court of Appeal considers when permission will be granted to shareholders of non-UK claims to pursue a derivative claim
In Durnont Enterprises Ltd v Fazita Investment Ltd [2024] EWCA Civ 299, the Court of Appeal recently dismissed the appeal of a shareholder of a Cypriot-based company for permission to continue a derivative action against various defendants.
Read moreThe beginning of the end for UK resident "non-doms"?
George Smith specialises in defending claims against financial professionals, including accountants, independent financial advisors, brokers and pensions professionals. Ben Simmonds is an Associate in the Professional & Financial Risks team at RPC, specialising in defending claims and complaints for professionals within the finance sector.
Read moreMoney Covered: The Week that Was - 19 April
Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.
Read moreFOS Plans and Budget for 2024/25
We take a look at The Financial Ombudsman Service's strategic plans and budget for the upcoming year ahead.
Read moreFCA vehicle finance review - the road trip continues
The FCA has provided a brief update on its ongoing review of vehicle finance arrangements. Difficulties with data gathering have been noted and firms are reminded of the need to maintain adequate financial resources. A judicial review application is also revving its engine!
Read moreFOS' plans to charge CMCs – an update (or lack of)
We reported back in February that the Financial Ombudsman Service (FOS) had announced plans to begin charging case management companies (CMCs) a fee for bringing a complaint. The consultation closed in January, and we've been eagerly awaiting the feedback. Following the publication of FOS' 2024/25 Plan and Budget, it seems there may be another opportunity for feedback to be provided.
Read moreWhat does it meme? The FCA's published guidance on 'finfluencers'
The FCA has published their guidance on financial promotions on social media, highlighting how firms and individuals can ensure their marketing strategy remains compliant with existing obligations.
Read moreA call for evidence: simplification of the Tax Administration Framework
As part of its ongoing review of the Tax Administration Framework, the government has issued a further call for evidence in relation to HMRC's enquiry and assessment powers, penalties and safeguards (the Call for Evidence). This follows two previous consultation publications and works towards the government's wider objective "to simplify and modernise the tax system, tackle non-compliance, make the tax system fairer for taxpayers and to make the customs system better for traders."
Read moreLawyers Covered - March 2024
It can be tough for busy lawyers to find enough time to service clients, make it safely through the regulation obstacle course, win new work and keep up-to-date with developments, but we've got you covered! Welcome to the March edition of our Lawyers Liability & Regulatory Update, in which we highlight the last month's key developments affecting lawyers and the professional risks they face.
Read moreFCA Business Plan 2024/25: Regulator sets out its plan of action for the next 12 months
The FCA has published its Business Plan for 2024/25, outlining its objectives over the next 12 months to deliver what it promised in its 3-year strategy, launched in April 2022. The FCA describes an "ambitious programme" of work ahead, seeking to achieve better outcomes for consumers and markets.
Read moreSome rumblings but little thunder – the FCA's Thematic Review of retirement income advice
The FCA has published the long-awaited result of its Thematic Review into retirement income advice. Predictably, this highlights some areas for improvement but (dare we say) the overall tone is perhaps positive.
Read moreFOS cap increases to £430,000 and £195,000 for complaints referred on or after 1 April 2024
In a press release yesterday, FOS announced increases to the applicable FOS cap that will impact complaints referred to FOS on or after 1 April 2024. £430,000 will apply to complaints about acts or omissions by firms on or after 1 April 2019 where the complaint is referred on or after 1 April 2024 and £195,000 will apply to complaints about acts or omissions by firms on or after 1 April 2019 where the complaint is referred on or after 1 April 2024.
Read moreWhen breach gets you nowhere – Ickenham Travel Group Ltd v Tiffin Green Ltd
In a recent judgement the High Court reiterated the principle that breach of duty alone is not sufficient to succeed in a claim of professional negligence against an auditor. This highlights the importance of evidencing actual loss and a chain of causation.
Read moreFCA consultation proposes changes to enforcement investigations
The FCA has recently released a consultation paper proposing changes to how it carries out enforcement investigations. We consider the key proposals and how they may impact upon both firms and individuals under the FCA's regulation.
Read moreFCA reviews ongoing client services following Consumer Duty implementation
The FCA has made a request for information from a number of networks with a view to determining what further work is needed to ensure that ongoing services provide fair value under the Consumer Duty. It has also recently published a webpage with examples of good practice and areas for improvement.
Read moreLawyers Covered - February 2024
Lawyers continue to face a wide range of challenges, and we are here to help guide you through them. So, welcome to the latest edition of our Lawyers Liability & Regulatory Update, in which we look back over the last month at key developments affecting lawyers and the professional risks they face.
Read moreFixing up the rules: changes to the fixed recoverable costs regime coming soon to a White Book near you!
Practitioners are eagerly awaiting the first decisions to see how the Court deals with tricky issues such as the effect of the transitional provisions and assignment of a complexity band. In the meantime, the Civil Procedure Rules Committee and the Ministry of Justice have been busy refining the rules and the 163rd update to the Civil Procedure Rules has been published. We've read it all so that you don't have to and explain below what's new in the world of FRC.
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