FCA Consultation – Modernising Redress

An FCA consultation on how to improve the Financial Ombudsman Service (FOS) and other consumer redress mechanisms 

In November 2024, the FCA issued this consultation, requesting suggestions for improvements to handling complaints/disputes regarding financial services, especially so-called “mass redress events”. 

 Many of ShareSoc’s campaigns involve situations where numerous individual investors have suffered losses in circumstances that we believe should not have arisen. So, we have considerable experience of representing and trying to obtain redress in such circumstances. 

We are lucky to have recently recruited Bozena (Boz) Michalowska as another voluntary member of ShareSoc’s Board and also of the Policy Committee. Boz was formerly a partner with law firm Leigh Day and specialised in consumer protection group litigations. Boz’s experience has been instrumental in shaping ShareSoc’s response to this CFI. She has made some excellent suggestions and recommendations, ensuring that the concerns of individual investors are robustly represented. This response, now submitted by ShareSoc, reflects our collective view, incorporating the expertise of our Policy Committee. Our responses to specific questions identified in the CFI are highlighted in yellow.  

Our key suggestions for mass redress events are summarised below: 

  • Financial service firms should be required to report when they receive a defined  number of related claims, indicative of a Mass Redress Event (MRE). 
  • To encourage early engagement, penalties should be imposed on firms if they fail to report potential MREs.   
  • When a potential MRE has been identified, the FCA or FOS should engage early and transparently with consumer representative organisations such as ShareSoc, to ensure that the interests of consumers are properly represented. 
  • A Claimant Committee should be established for each MRE, made up of individual test claimants representative of the types of loss that that mass redress event may have caused, and a not-for-profit organisation representative of the wider affected group of claimants. The Claimant committee should be consulted on generic issues relevant to the investigation of the claim and proposals for redress.  
  • The Claimant Committee in an MRE should be entitled to paid-for legal advice, to ensure parity of arms. 
  • A standard form, customised to each event, should be developed to allow claims to be processed efficiently and AI should be used to classify and process the form submissions for each event, so that claims can be collated, reviewed, categorised and aggregated efficiently.  
  • The claims of the individual test cases, should be reviewed in detail, to determine the issues and appropriate redress for each case type. 
  • AI should be used to apply test case outcomes to large datasets of claims ensuring accurate and efficient calculations of individual redress amounts. 
  • FCA – FOS data sharing should be improved to ensure that both the FOS and Claimants have full access to firm data and disclosures. 
  • Defined regulatory timeframes should be introduced to prevent delays in the investigation of MRE claims. 
  • A suspension of statutory limitation periods should be introduced during the period of the FOS / FCA investigation of a MRE to ensure that consumers are not forced into issuing proceedings to protect their claims.  
  • If consumers or their representatives are not satisfied with the proposed redress, they should be entitled to apply to the court to review the FOS/FCA decision or to progress with litigation. 
  • Groups such as ShareSoc should be included in committees/meetings of cross-organisational groups, termed the “Wider Implementation Framework” (WIF). 
Post Date: February 5, 2025

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