0:00:00 > 0:00:01the House of Commons. We will now be going over live to the House of
0:00:01 > 0:00:04Lords. Remember you can watch recorded coverage of all of the
0:00:04 > 0:00:16business of today after The Daily Politics later tonight.
0:00:17 > 0:00:22I would like to reflect carefully on all the points he has raised, but I
0:00:22 > 0:00:25don't think this problem is going to go away Eddie Howe can see it
0:00:25 > 0:00:28increasing. And we have other pieces of legislation, where I'm already
0:00:28 > 0:00:37becoming aware that claims managers are looking at new areas of. That
0:00:37 > 0:00:43they are going to fasten on and exploit. And we have to be prepared
0:00:43 > 0:00:49to deal with that in advance rather than seeking to catch up, which is I
0:00:49 > 0:00:54suppose what I'm saying we've try to do for each of the last ten years.
0:00:54 > 0:00:58So, lets move ahead, but in the meantime I thank my Noble Friend the
0:00:58 > 0:01:16minister for all that he has said. The amendment is withdrawn. After
0:01:16 > 0:01:22clause 17, amendment number 40.My Lords, by leave of the House, I
0:01:22 > 0:01:28begged to move amendment 40 on behalf of the baroness, who has had
0:01:28 > 0:01:32to leave the Chamber to attend an unexpected unforeseen family
0:01:32 > 0:01:40problem. I think I can dispatch the amendment without too much time, but
0:01:40 > 0:01:49it's part of a process. It heals, as colleagues will see, amendment 40 is
0:01:49 > 0:01:53entitled, new clause to bring in interim rules strict in charges for
0:01:53 > 0:01:59management services. The government is through the FC a promoting public
0:01:59 > 0:02:08interest in trying to complete the applications for PPI claims and
0:02:08 > 0:02:11there is a public interest in that and there is a lot of advertising
0:02:11 > 0:02:17around, which is encouraging people to do that. But my Lords as we heard
0:02:17 > 0:02:22during the committee stage there are a lot of people who are being caught
0:02:22 > 0:02:27up and caused significant coming as a result of the misselling of PPI,
0:02:27 > 0:02:33particularly in relation to incurring fees of 30% or sometimes
0:02:33 > 0:02:37more when using a claims management company, when they could achieve the
0:02:37 > 0:02:41same thing themselves directly from lenders without charge. Citizens
0:02:41 > 0:02:47Advice Bureau have advised that almost half of the problems and
0:02:47 > 0:02:52complaints relating to claims management fees are of that kind,
0:02:52 > 0:02:58namely disproportionate levels of fees. I've only been involved in the
0:02:58 > 0:03:01margins of this but the baroness I think has been working intensively
0:03:01 > 0:03:06with the minister and her team, and that has to be acknowledged. I think
0:03:06 > 0:03:09the baroness has spent a lot of time trying to make sense of this,
0:03:09 > 0:03:17because it is an interim measure, but one which is necessary. So, the
0:03:17 > 0:03:26purpose of the amendment, really, is to seek assurance that there is
0:03:26 > 0:03:28still a possibility of bringing something forward in terms of a
0:03:28 > 0:03:33third reading and that is is being worked on. A lot of intensive work
0:03:33 > 0:03:38is being done in that regard and that is very welcome to know. In the
0:03:38 > 0:03:41gestation of some of the ideas which are currently in play, I think the
0:03:41 > 0:03:50baroness and myself would like serious consideration to be given to
0:03:50 > 0:03:53the kind of cap that we are talking about. I think that some of the
0:03:53 > 0:03:59ideas which are being considered are around 20% plus fat. And I think if
0:03:59 > 0:04:03that is the case, when we come to third reading, we can consider it in
0:04:03 > 0:04:11more detail, but actually it sounds quite high. Both me and Baroness
0:04:11 > 0:04:16Meacher had a technical reason why perhaps it has to be sent at 20%
0:04:16 > 0:04:21plus fat but the plea in the course of moving the amendment would be for
0:04:21 > 0:04:27careful consideration of the level at which the cap may be set. -- plus
0:04:27 > 0:04:37VAT. And finally there are some suggestions that if a company did
0:04:37 > 0:04:41charge more than the cap allows under the amendments being
0:04:41 > 0:04:43considered, that would not be a breach of statutory duty but the
0:04:43 > 0:04:51access would be recoverable, only the excess. So, the mechanism which
0:04:51 > 0:04:55is being fought about that moment is difficult to understand as far as
0:04:55 > 0:05:01I'm concerned. The mechanism is not clear, and if the minister could
0:05:01 > 0:05:06explain why an excess charge would not be a breach of statutory duty, I
0:05:06 > 0:05:10certainly as a former provincial solicitor of many years would be
0:05:10 > 0:05:18going to bed this evening in a happier place if I knew this.
0:05:18 > 0:05:23This is to say that the process that has been undertaken by the
0:05:23 > 0:05:34ministerial team is acknowledged and welcome. We've had help on our site
0:05:34 > 0:05:40from Lloyds bank and the sea ABC this I hope, if the Minister can
0:05:40 > 0:05:44give us some assurance on the process going forward, that would be
0:05:44 > 0:05:56welcome -- the Cab side. My Lords, I beg to move.After clause 17, a new
0:05:56 > 0:06:07clause is printed, amendment 40. My Lords, we should be thankful for
0:06:07 > 0:06:14this amendment to be taught forward on the half of Baroness Meacher. It
0:06:14 > 0:06:20looks as though this will be another issue for us to consider at third
0:06:20 > 0:06:24reading, so I don't propose to dwell on it extensively now. If that isn't
0:06:24 > 0:06:36the case, it would be good if the Minister would tell us.
0:06:46 > 0:06:54An interesting point was raised about when people exceed the cap,
0:06:54 > 0:06:59what is the remedy. Perhaps the Minister can confirm what the route
0:06:59 > 0:07:07would be, the excess recoverable by the claimant, rather than by
0:07:07 > 0:07:10something more direct. We look forward to the Minister's reply on
0:07:10 > 0:07:22this.My Lords, I rise briefly to thank the noble Lord Kirkwood for
0:07:22 > 0:07:27moving this on behalf of Baroness Meacher. On the half of my noble
0:07:27 > 0:07:32friend on the front bench, if in the considerations of this matter we
0:07:32 > 0:07:38have considered the issue that I did raise in the committee stage, which
0:07:38 > 0:07:44is supported by a number of consumer groups, which is to require a
0:07:44 > 0:07:50company that has been found to need to pay out on a claim to pay the
0:07:50 > 0:07:56claims management fee, rather than take it out of the actual
0:07:56 > 0:08:02compensation that they argue with a cap that should also be more
0:08:02 > 0:08:10acceptable, perhaps, but also more effective for those that do receive
0:08:10 > 0:08:14compensation, as well as encouraging companies who have mis-sold
0:08:14 > 0:08:22something, or perpetrated harm to the consumer, to voluntarily contact
0:08:22 > 0:08:25the consumer is harmed, rather than wait for a claims manager to do so
0:08:25 > 0:08:40on their behalf of the claims management fee.My Lords, thanking
0:08:40 > 0:08:45the noble Lord Kirkwood for moving on behalf of Baroness Meacher, and I
0:08:45 > 0:08:50am sorry she had to leave for family reasons. I appreciate the work she
0:08:50 > 0:08:54has put into this amendment, is pursued with diligence. The
0:08:54 > 0:08:59amendment seeks to put in place a fee cap from two months until the
0:08:59 > 0:09:07FCA implements its own cap, and we debated this in committee, and I am
0:09:07 > 0:09:10grateful to noble Lords that contributed to this debate to
0:09:10 > 0:09:17highlight again. Clause 17 makes great strides to secure prices for
0:09:17 > 0:09:22consumers by giving the FCA a duty to cap fees, charged in respect of
0:09:22 > 0:09:28financial services claims. However, as was pointed out during committee
0:09:28 > 0:09:32stage, the Emperor mentation of the new regulatory regime, and an
0:09:32 > 0:09:35effective robust cap will necessarily take some time, during
0:09:35 > 0:09:39which, consumers can continue to be charged disproportionate fees. In
0:09:39 > 0:09:46that debate, noble lords expressed concerns that the FCA's PPI claims
0:09:46 > 0:09:52deadline may have passed by the time the FCA's fee cap is put in place, a
0:09:52 > 0:09:57point made by the noble Lord McKenzie. We know 90% of financial
0:09:57 > 0:10:01services claims relate to PPI, and we do want to ensure consumers are
0:10:01 > 0:10:06protected against excessive fees the PPI claims, as soon as possible. And
0:10:06 > 0:10:13that is why, as Lord Kirkwood and has abated with commendable
0:10:13 > 0:10:16foresight, the government intends to table an amendment at third reading
0:10:16 > 0:10:19to introduce an interim fee cap in respect of PPI claims management
0:10:19 > 0:10:26services. The amendment will set a fee cap at 20%, excluding VAT of the
0:10:26 > 0:10:32claim value, and will be reinforced by regulators upon commencement two
0:10:32 > 0:10:40months after the Bill received Royal assent. The M EJ consulted on a 15%
0:10:40 > 0:10:45cap. The claims regulation management unit conducted that
0:10:45 > 0:10:51consultation. The cost of processing claims, and also market analysis of
0:10:51 > 0:11:01profit margins
0:11:01 > 0:11:03claims, and also market analysis of profit margins. This amendment
0:11:03 > 0:11:05supports the government's aim of ensuring the claims management
0:11:05 > 0:11:08sector works in the interest of consumers by protecting them from
0:11:08 > 0:11:15excessive fees. The amendment tabled by the noble Baroness Meacher, moved
0:11:15 > 0:11:19by Lord Kirkwood, will go some way to ensuring that consumers are
0:11:19 > 0:11:23protected during this interim period. However, the government
0:11:23 > 0:11:28amendment will go further in two key areas. Firstly, it will have a wider
0:11:28 > 0:11:32application than that tabled by the noble Baroness. The interim fee cap
0:11:32 > 0:11:37will apply to CMCs, and legal services providers that carry out
0:11:37 > 0:11:43claims management services in ratio to PPI claims, to enforce by the
0:11:43 > 0:11:48relevant regulators. Secondly, it will include a prohibition against
0:11:48 > 0:11:53charging over 20% of the claim value for PPI claims, which would enable
0:11:53 > 0:11:57the radiators to implement the cap quickly. And as I said a moment ago,
0:11:57 > 0:12:00this level was reached due to be helpful and combines of responses to
0:12:00 > 0:12:08the Matt Rhead -- mystery of Justice's fee capping regime for
0:12:08 > 0:12:14CMCs handling financial services. On the procedure for claiming any
0:12:14 > 0:12:19excesses imposed over the cap, if anyone in breach of the interim fee
0:12:19 > 0:12:23cap will be subject to readily to reinforcement, which could include
0:12:23 > 0:12:28fines. Furthermore, a contract to receive or pay a sum in excess of
0:12:28 > 0:12:33the fee cap would be unenforceable, thereby ensuring that firms cannot
0:12:33 > 0:12:36profit from malpractice. Consumers are entitled to recover excessive
0:12:36 > 0:12:42fees. My noble friend, Baroness Altman, raised a question about
0:12:42 > 0:12:46compensation. As we are going to revert to this issue again on third
0:12:46 > 0:12:50reading, perhaps we can deal with that particular issue then. Can I
0:12:50 > 0:12:54finally make it clear that the interim cap is intended to be a
0:12:54 > 0:13:00temporary measure, and will only apply once the FCA has implemented
0:13:00 > 0:13:06its rules under clause 17. It will only apply to PPI claims, when the
0:13:06 > 0:13:09cap comes in, it will apply to all claims relating to financial
0:13:09 > 0:13:16products and services. The FCA, as the incoming radiator, will be
0:13:16 > 0:13:20placed to develop its own cap based on assessment and market. Given the
0:13:20 > 0:13:23government's undertaking to table an amendment on this matter at third
0:13:23 > 0:13:29reading, I hope the noble Lord is able to withdraw the amendment.I am
0:13:29 > 0:13:32very happy with that undertaking, I hope the dialogue can continue, and
0:13:32 > 0:13:37I begged leave to withdraw the amendment.The amendment to be
0:13:37 > 0:13:46withdrawn. I rise to move amendment 41, though
0:13:46 > 0:13:51in doing so, I am somewhat nervous coming hot on the heels of amendment
0:13:51 > 0:13:5739 with being a member of the noble lords flock in your lordship's
0:13:57 > 0:14:04house, I am concerned that if I overly push on amendment 31, I, May,
0:14:04 > 0:14:09too, be the victim of whiplash. We discussed many of the issues in
0:14:09 > 0:14:15committee. I have brought the amendment back at report stage. I
0:14:15 > 0:14:20want to push my noble friend to understand the timeline for the
0:14:20 > 0:14:26process for bringing in a duty of care, both in the general and
0:14:26 > 0:14:29specific the intention of the Bill was to put an amendment down for a
0:14:29 > 0:14:35general duty of care on financial institutions. As a result of the
0:14:35 > 0:14:38scope of the Bill, a specific duty as set out in my amendment,
0:14:38 > 0:14:45pertaining to CMC's is what we are discussing this evening. I am
0:14:45 > 0:14:48grateful to all of the organisations who helped with briefing for this
0:14:48 > 0:14:53amendment, not least again MacMillan Cancer Support, who really
0:14:53 > 0:14:59demonstrate what a modern charity can do, not just focusing on the
0:14:59 > 0:15:05specific at the centre of their organisation, but going wider to all
0:15:05 > 0:15:10of the elements that directly affect people when they receive a cancer
0:15:10 > 0:15:15diagnosis. And it's part of the reason why I chose to focus on
0:15:15 > 0:15:22Macmillan and cancer in putting this amendment down. It goes to the heart
0:15:22 > 0:15:27of bringing to life why there is a need for a general duty of care to
0:15:27 > 0:15:33be exercised by financial services institutions when one in two of us
0:15:33 > 0:15:37will receive a cancer diagnosis in our lifetime. This isn't a marginal
0:15:37 > 0:15:42matter, it demonstrates that financial institutions, not just
0:15:42 > 0:15:45have all of the current responsibility and obligations upon
0:15:45 > 0:15:52them, but really need to have that general duty of care. As I say, the
0:15:52 > 0:15:57amendment before us this evening is in a specific with CMCs. I push my
0:15:57 > 0:16:01noble friend, the Minister, to accept the amendment as set out, and
0:16:01 > 0:16:06also to give some further description, building on comments
0:16:06 > 0:16:12that my honourable friend made at committee stage. On the timeline,
0:16:12 > 0:16:17consider bringing forward and implement a general duty of care,
0:16:17 > 0:16:22with obviously the good offices of the FCA involved, and I am grateful
0:16:22 > 0:16:24to the FCA for meeting with me to discuss this, not least Mr
0:16:24 > 0:16:31Christopher were lard. I will say no more, the arguments were put forward
0:16:31 > 0:16:34at committee stage. I urge my noble friend to accept the amendment as
0:16:34 > 0:16:42set out, and I beg to move.Certain new clauses printed, amendment 40
0:16:42 > 0:16:51one.My Lords, can I congratulate Lord Holmes of Richmond, for
0:16:51 > 0:16:55sticking with this issue, because it is fundamental. If I can say to the
0:16:55 > 0:16:59government, a duty of care is so important, it should be so central
0:16:59 > 0:17:02to every piece of our financial services industry that we shouldn't
0:17:02 > 0:17:08let the perfect, having a general duty of care, be the enemy of the
0:17:08 > 0:17:12good, which is an opportunity to put in a specific duty of care in this
0:17:12 > 0:17:15particular Bill. I hope the government will consider that. My
0:17:15 > 0:17:20lords, I have the privilege to be on the government commission on
0:17:20 > 0:17:28banking. That is to expose a lot of misdirection within the financial
0:17:28 > 0:17:32services industry. I think everybody, not only on the
0:17:32 > 0:17:36committee, but far more broadly, agreed that the problem lay in
0:17:36 > 0:17:41culture. We have termed the banking industry and the financial services
0:17:41 > 0:17:45industry, and asked it through various bodies, to improve its
0:17:45 > 0:17:50culture, but surely, we also have an opportunity to drive that with every
0:17:50 > 0:17:55legislation peace that comes our way. Duty of care reflects that
0:17:55 > 0:18:00whole cultural approach, the underlying, underpinning approach
0:18:00 > 0:18:03that we expect our financial services to take, where the customer
0:18:03 > 0:18:07is at the centre, where the interests of the customer are at the
0:18:07 > 0:18:11centre. It is not that financial services can't make profits, that is
0:18:11 > 0:18:15the business they are in, but never at the expense of that central
0:18:15 > 0:18:18interest of the client or customer. So I really would urge the
0:18:18 > 0:18:24government to take seriously this opportunity to make sure that in an
0:18:24 > 0:18:27area where there has been extraordinary abuse, and I think so
0:18:27 > 0:18:36many of us, others talking about whiplash to the kind of issues that
0:18:36 > 0:18:41have been raised around holiday sickness. I mean, in issue after
0:18:41 > 0:18:45issue, we have seen a complete failure in the culture of bodies
0:18:45 > 0:18:50providing those kinds of services. So tackling that issue head on, not
0:18:50 > 0:18:55being afraid to use language that clearly is around that duty of care,
0:18:55 > 0:19:02not considering it too soft or too difficult, but I think it all should
0:19:02 > 0:19:11become a habit. We had to make sure that in every piece of legislation
0:19:11 > 0:19:17that this particular issue is underscored. This piece of
0:19:17 > 0:19:26legislation could be built up.My lords, we have added our name to the
0:19:26 > 0:19:32amendment, together with Baroness Karina, which takes us back to
0:19:32 > 0:19:36regulatory principles and the duty of care. The noble Lord is right to
0:19:36 > 0:19:41have removed the where appropriate qualification from his early
0:19:41 > 0:19:51amendment.
0:21:57 > 0:22:04Subtitles will resume on 'Monday In Parliament' at 2300.