Browse content similar to 31/10/2017. Check below for episodes and series from the same categories and more!
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the House of Commons. We will now be
going over live to the House of | 0:00:00 | 0:00:01 | |
Lords. Remember you can watch
recorded coverage of all of the | 0:00:01 | 0:00:04 | |
business of today after The Daily
Politics later tonight. | 0:00:04 | 0:00:16 | |
I would like to reflect carefully on
all the points he has raised, but I | 0:00:17 | 0:00:22 | |
don't think this problem is going to
go away Eddie Howe can see it | 0:00:22 | 0:00:25 | |
increasing. And we have other pieces
of legislation, where I'm already | 0:00:25 | 0:00:28 | |
becoming aware that claims managers
are looking at new areas of. That | 0:00:28 | 0:00:37 | |
they are going to fasten on and
exploit. And we have to be prepared | 0:00:37 | 0:00:43 | |
to deal with that in advance rather
than seeking to catch up, which is I | 0:00:43 | 0:00:49 | |
suppose what I'm saying we've try to
do for each of the last ten years. | 0:00:49 | 0:00:54 | |
So, lets move ahead, but in the
meantime I thank my Noble Friend the | 0:00:54 | 0:00:58 | |
minister for all that he has said.
The amendment is withdrawn. After | 0:00:58 | 0:01:16 | |
clause 17, amendment number 40. My
Lords, by leave of the House, I | 0:01:16 | 0:01:22 | |
begged to move amendment 40 on
behalf of the baroness, who has had | 0:01:22 | 0:01:28 | |
to leave the Chamber to attend an
unexpected unforeseen family | 0:01:28 | 0:01:32 | |
problem. I think I can dispatch the
amendment without too much time, but | 0:01:32 | 0:01:40 | |
it's part of a process. It heals, as
colleagues will see, amendment 40 is | 0:01:40 | 0:01:49 | |
entitled, new clause to bring in
interim rules strict in charges for | 0:01:49 | 0:01:53 | |
management services. The government
is through the FC a promoting public | 0:01:53 | 0:01:59 | |
interest in trying to complete the
applications for PPI claims and | 0:01:59 | 0:02:08 | |
there is a public interest in that
and there is a lot of advertising | 0:02:08 | 0:02:11 | |
around, which is encouraging people
to do that. But my Lords as we heard | 0:02:11 | 0:02:17 | |
during the committee stage there are
a lot of people who are being caught | 0:02:17 | 0:02:22 | |
up and caused significant coming as
a result of the misselling of PPI, | 0:02:22 | 0:02:27 | |
particularly in relation to
incurring fees of 30% or sometimes | 0:02:27 | 0:02:33 | |
more when using a claims management
company, when they could achieve the | 0:02:33 | 0:02:37 | |
same thing themselves directly from
lenders without charge. Citizens | 0:02:37 | 0:02:41 | |
Advice Bureau have advised that
almost half of the problems and | 0:02:41 | 0:02:47 | |
complaints relating to claims
management fees are of that kind, | 0:02:47 | 0:02:52 | |
namely disproportionate levels of
fees. I've only been involved in the | 0:02:52 | 0:02:58 | |
margins of this but the baroness I
think has been working intensively | 0:02:58 | 0:03:01 | |
with the minister and her team, and
that has to be acknowledged. I think | 0:03:01 | 0:03:06 | |
the baroness has spent a lot of time
trying to make sense of this, | 0:03:06 | 0:03:09 | |
because it is an interim measure,
but one which is necessary. So, the | 0:03:09 | 0:03:17 | |
purpose of the amendment, really, is
to seek assurance that there is | 0:03:17 | 0:03:26 | |
still a possibility of bringing
something forward in terms of a | 0:03:26 | 0:03:28 | |
third reading and that is is being
worked on. A lot of intensive work | 0:03:28 | 0:03:33 | |
is being done in that regard and
that is very welcome to know. In the | 0:03:33 | 0:03:38 | |
gestation of some of the ideas which
are currently in play, I think the | 0:03:38 | 0:03:41 | |
baroness and myself would like
serious consideration to be given to | 0:03:41 | 0:03:50 | |
the kind of cap that we are talking
about. I think that some of the | 0:03:50 | 0:03:53 | |
ideas which are being considered are
around 20% plus fat. And I think if | 0:03:53 | 0:03:59 | |
that is the case, when we come to
third reading, we can consider it in | 0:03:59 | 0:04:03 | |
more detail, but actually it sounds
quite high. Both me and Baroness | 0:04:03 | 0:04:11 | |
Meacher had a technical reason why
perhaps it has to be sent at 20% | 0:04:11 | 0:04:16 | |
plus fat but the plea in the course
of moving the amendment would be for | 0:04:16 | 0:04:21 | |
careful consideration of the level
at which the cap may be set. -- plus | 0:04:21 | 0:04:27 | |
VAT. And finally there are some
suggestions that if a company did | 0:04:27 | 0:04:37 | |
charge more than the cap allows
under the amendments being | 0:04:37 | 0:04:41 | |
considered, that would not be a
breach of statutory duty but the | 0:04:41 | 0:04:43 | |
access would be recoverable, only
the excess. So, the mechanism which | 0:04:43 | 0:04:51 | |
is being fought about that moment is
difficult to understand as far as | 0:04:51 | 0:04:55 | |
I'm concerned. The mechanism is not
clear, and if the minister could | 0:04:55 | 0:05:01 | |
explain why an excess charge would
not be a breach of statutory duty, I | 0:05:01 | 0:05:06 | |
certainly as a former provincial
solicitor of many years would be | 0:05:06 | 0:05:10 | |
going to bed this evening in a
happier place if I knew this. | 0:05:10 | 0:05:18 | |
This is to say that the process that
has been undertaken by the | 0:05:18 | 0:05:23 | |
ministerial team is acknowledged and
welcome. We've had help on our site | 0:05:23 | 0:05:34 | |
from Lloyds bank and the sea ABC
this I hope, if the Minister can | 0:05:34 | 0:05:40 | |
give us some assurance on the
process going forward, that would be | 0:05:40 | 0:05:44 | |
welcome -- the Cab side. My Lords, I
beg to move. After clause 17, a new | 0:05:44 | 0:05:56 | |
clause is printed, amendment 40.
My Lords, we should be thankful for | 0:05:56 | 0:06:07 | |
this amendment to be taught forward
on the half of Baroness Meacher. It | 0:06:07 | 0:06:14 | |
looks as though this will be another
issue for us to consider at third | 0:06:14 | 0:06:20 | |
reading, so I don't propose to dwell
on it extensively now. If that isn't | 0:06:20 | 0:06:24 | |
the case, it would be good if the
Minister would tell us. | 0:06:24 | 0:06:36 | |
An interesting point was raised
about when people exceed the cap, | 0:06:46 | 0:06:54 | |
what is the remedy. Perhaps the
Minister can confirm what the route | 0:06:54 | 0:06:59 | |
would be, the excess recoverable by
the claimant, rather than by | 0:06:59 | 0:07:07 | |
something more direct. We look
forward to the Minister's reply on | 0:07:07 | 0:07:10 | |
this. My Lords, I rise briefly to
thank the noble Lord Kirkwood for | 0:07:10 | 0:07:22 | |
moving this on behalf of Baroness
Meacher. On the half of my noble | 0:07:22 | 0:07:27 | |
friend on the front bench, if in the
considerations of this matter we | 0:07:27 | 0:07:32 | |
have considered the issue that I did
raise in the committee stage, which | 0:07:32 | 0:07:38 | |
is supported by a number of consumer
groups, which is to require a | 0:07:38 | 0:07:44 | |
company that has been found to need
to pay out on a claim to pay the | 0:07:44 | 0:07:50 | |
claims management fee, rather than
take it out of the actual | 0:07:50 | 0:07:56 | |
compensation that they argue with a
cap that should also be more | 0:07:56 | 0:08:02 | |
acceptable, perhaps, but also more
effective for those that do receive | 0:08:02 | 0:08:10 | |
compensation, as well as encouraging
companies who have mis-sold | 0:08:10 | 0:08:14 | |
something, or perpetrated harm to
the consumer, to voluntarily contact | 0:08:14 | 0:08:22 | |
the consumer is harmed, rather than
wait for a claims manager to do so | 0:08:22 | 0:08:25 | |
on their behalf of the claims
management fee. My Lords, thanking | 0:08:25 | 0:08:40 | |
the noble Lord Kirkwood for moving
on behalf of Baroness Meacher, and I | 0:08:40 | 0:08:45 | |
am sorry she had to leave for family
reasons. I appreciate the work she | 0:08:45 | 0:08:50 | |
has put into this amendment, is
pursued with diligence. The | 0:08:50 | 0:08:54 | |
amendment seeks to put in place a
fee cap from two months until the | 0:08:54 | 0:08:59 | |
FCA implements its own cap, and we
debated this in committee, and I am | 0:08:59 | 0:09:07 | |
grateful to noble Lords that
contributed to this debate to | 0:09:07 | 0:09:10 | |
highlight again. Clause 17 makes
great strides to secure prices for | 0:09:10 | 0:09:17 | |
consumers by giving the FCA a duty
to cap fees, charged in respect of | 0:09:17 | 0:09:22 | |
financial services claims. However,
as was pointed out during committee | 0:09:22 | 0:09:28 | |
stage, the Emperor mentation of the
new regulatory regime, and an | 0:09:28 | 0:09:32 | |
effective robust cap will
necessarily take some time, during | 0:09:32 | 0:09:35 | |
which, consumers can continue to be
charged disproportionate fees. In | 0:09:35 | 0:09:39 | |
that debate, noble lords expressed
concerns that the FCA's PPI claims | 0:09:39 | 0:09:46 | |
deadline may have passed by the time
the FCA's fee cap is put in place, a | 0:09:46 | 0:09:52 | |
point made by the noble Lord
McKenzie. We know 90% of financial | 0:09:52 | 0:09:57 | |
services claims relate to PPI, and
we do want to ensure consumers are | 0:09:57 | 0:10:01 | |
protected against excessive fees the
PPI claims, as soon as possible. And | 0:10:01 | 0:10:06 | |
that is why, as Lord Kirkwood and
has abated with commendable | 0:10:06 | 0:10:13 | |
foresight, the government intends to
table an amendment at third reading | 0:10:13 | 0:10:16 | |
to introduce an interim fee cap in
respect of PPI claims management | 0:10:16 | 0:10:19 | |
services. The amendment will set a
fee cap at 20%, excluding VAT of the | 0:10:19 | 0:10:26 | |
claim value, and will be reinforced
by regulators upon commencement two | 0:10:26 | 0:10:32 | |
months after the Bill received Royal
assent. The M EJ consulted on a 15% | 0:10:32 | 0:10:40 | |
cap. The claims regulation
management unit conducted that | 0:10:40 | 0:10:45 | |
consultation. The cost of processing
claims, and also market analysis of | 0:10:45 | 0:10:51 | |
profit margins | 0:10:51 | 0:11:01 | |
claims, and also market analysis of
profit margins. This amendment | 0:11:01 | 0:11:03 | |
supports the government's aim of
ensuring the claims management | 0:11:03 | 0:11:05 | |
sector works in the interest of
consumers by protecting them from | 0:11:05 | 0:11:08 | |
excessive fees. The amendment tabled
by the noble Baroness Meacher, moved | 0:11:08 | 0:11:15 | |
by Lord Kirkwood, will go some way
to ensuring that consumers are | 0:11:15 | 0:11:19 | |
protected during this interim
period. However, the government | 0:11:19 | 0:11:23 | |
amendment will go further in two key
areas. Firstly, it will have a wider | 0:11:23 | 0:11:28 | |
application than that tabled by the
noble Baroness. The interim fee cap | 0:11:28 | 0:11:32 | |
will apply to CMCs, and legal
services providers that carry out | 0:11:32 | 0:11:37 | |
claims management services in ratio
to PPI claims, to enforce by the | 0:11:37 | 0:11:43 | |
relevant regulators. Secondly, it
will include a prohibition against | 0:11:43 | 0:11:48 | |
charging over 20% of the claim value
for PPI claims, which would enable | 0:11:48 | 0:11:53 | |
the radiators to implement the cap
quickly. And as I said a moment ago, | 0:11:53 | 0:11:57 | |
this level was reached due to be
helpful and combines of responses to | 0:11:57 | 0:12:00 | |
the Matt Rhead -- mystery of
Justice's fee capping regime for | 0:12:00 | 0:12:08 | |
CMCs handling financial services. On
the procedure for claiming any | 0:12:08 | 0:12:14 | |
excesses imposed over the cap, if
anyone in breach of the interim fee | 0:12:14 | 0:12:19 | |
cap will be subject to readily to
reinforcement, which could include | 0:12:19 | 0:12:23 | |
fines. Furthermore, a contract to
receive or pay a sum in excess of | 0:12:23 | 0:12:28 | |
the fee cap would be unenforceable,
thereby ensuring that firms cannot | 0:12:28 | 0:12:33 | |
profit from malpractice. Consumers
are entitled to recover excessive | 0:12:33 | 0:12:36 | |
fees. My noble friend, Baroness
Altman, raised a question about | 0:12:36 | 0:12:42 | |
compensation. As we are going to
revert to this issue again on third | 0:12:42 | 0:12:46 | |
reading, perhaps we can deal with
that particular issue then. Can I | 0:12:46 | 0:12:50 | |
finally make it clear that the
interim cap is intended to be a | 0:12:50 | 0:12:54 | |
temporary measure, and will only
apply once the FCA has implemented | 0:12:54 | 0:13:00 | |
its rules under clause 17. It will
only apply to PPI claims, when the | 0:13:00 | 0:13:06 | |
cap comes in, it will apply to all
claims relating to financial | 0:13:06 | 0:13:09 | |
products and services. The FCA, as
the incoming radiator, will be | 0:13:09 | 0:13:16 | |
placed to develop its own cap based
on assessment and market. Given the | 0:13:16 | 0:13:20 | |
government's undertaking to table an
amendment on this matter at third | 0:13:20 | 0:13:23 | |
reading, I hope the noble Lord is
able to withdraw the amendment. I am | 0:13:23 | 0:13:29 | |
very happy with that undertaking, I
hope the dialogue can continue, and | 0:13:29 | 0:13:32 | |
I begged leave to withdraw the
amendment. The amendment to be | 0:13:32 | 0:13:37 | |
withdrawn.
I rise to move amendment 41, though | 0:13:37 | 0:13:46 | |
in doing so, I am somewhat nervous
coming hot on the heels of amendment | 0:13:46 | 0:13:51 | |
39 with being a member of the noble
lords flock in your lordship's | 0:13:51 | 0:13:57 | |
house, I am concerned that if I
overly push on amendment 31, I, May, | 0:13:57 | 0:14:04 | |
too, be the victim of whiplash. We
discussed many of the issues in | 0:14:04 | 0:14:09 | |
committee. I have brought the
amendment back at report stage. I | 0:14:09 | 0:14:15 | |
want to push my noble friend to
understand the timeline for the | 0:14:15 | 0:14:20 | |
process for bringing in a duty of
care, both in the general and | 0:14:20 | 0:14:26 | |
specific the intention of the Bill
was to put an amendment down for a | 0:14:26 | 0:14:29 | |
general duty of care on financial
institutions. As a result of the | 0:14:29 | 0:14:35 | |
scope of the Bill, a specific duty
as set out in my amendment, | 0:14:35 | 0:14:38 | |
pertaining to CMC's is what we are
discussing this evening. I am | 0:14:38 | 0:14:45 | |
grateful to all of the organisations
who helped with briefing for this | 0:14:45 | 0:14:48 | |
amendment, not least again MacMillan
Cancer Support, who really | 0:14:48 | 0:14:53 | |
demonstrate what a modern charity
can do, not just focusing on the | 0:14:53 | 0:14:59 | |
specific at the centre of their
organisation, but going wider to all | 0:14:59 | 0:15:05 | |
of the elements that directly affect
people when they receive a cancer | 0:15:05 | 0:15:10 | |
diagnosis. And it's part of the
reason why I chose to focus on | 0:15:10 | 0:15:15 | |
Macmillan and cancer in putting this
amendment down. It goes to the heart | 0:15:15 | 0:15:22 | |
of bringing to life why there is a
need for a general duty of care to | 0:15:22 | 0:15:27 | |
be exercised by financial services
institutions when one in two of us | 0:15:27 | 0:15:33 | |
will receive a cancer diagnosis in
our lifetime. This isn't a marginal | 0:15:33 | 0:15:37 | |
matter, it demonstrates that
financial institutions, not just | 0:15:37 | 0:15:42 | |
have all of the current
responsibility and obligations upon | 0:15:42 | 0:15:45 | |
them, but really need to have that
general duty of care. As I say, the | 0:15:45 | 0:15:52 | |
amendment before us this evening is
in a specific with CMCs. I push my | 0:15:52 | 0:15:57 | |
noble friend, the Minister, to
accept the amendment as set out, and | 0:15:57 | 0:16:01 | |
also to give some further
description, building on comments | 0:16:01 | 0:16:06 | |
that my honourable friend made at
committee stage. On the timeline, | 0:16:06 | 0:16:12 | |
consider bringing forward and
implement a general duty of care, | 0:16:12 | 0:16:17 | |
with obviously the good offices of
the FCA involved, and I am grateful | 0:16:17 | 0:16:22 | |
to the FCA for meeting with me to
discuss this, not least Mr | 0:16:22 | 0:16:24 | |
Christopher were lard. I will say no
more, the arguments were put forward | 0:16:24 | 0:16:31 | |
at committee stage. I urge my noble
friend to accept the amendment as | 0:16:31 | 0:16:34 | |
set out, and I beg to move. Certain
new clauses printed, amendment 40 | 0:16:34 | 0:16:42 | |
one. My Lords, can I congratulate
Lord Holmes of Richmond, for | 0:16:42 | 0:16:51 | |
sticking with this issue, because it
is fundamental. If I can say to the | 0:16:51 | 0:16:55 | |
government, a duty of care is so
important, it should be so central | 0:16:55 | 0:16:59 | |
to every piece of our financial
services industry that we shouldn't | 0:16:59 | 0:17:02 | |
let the perfect, having a general
duty of care, be the enemy of the | 0:17:02 | 0:17:08 | |
good, which is an opportunity to put
in a specific duty of care in this | 0:17:08 | 0:17:12 | |
particular Bill. I hope the
government will consider that. My | 0:17:12 | 0:17:15 | |
lords, I have the privilege to be on
the government commission on | 0:17:15 | 0:17:20 | |
banking. That is to expose a lot of
misdirection within the financial | 0:17:20 | 0:17:28 | |
services industry. I think
everybody, not only on the | 0:17:28 | 0:17:32 | |
committee, but far more broadly,
agreed that the problem lay in | 0:17:32 | 0:17:36 | |
culture. We have termed the banking
industry and the financial services | 0:17:36 | 0:17:41 | |
industry, and asked it through
various bodies, to improve its | 0:17:41 | 0:17:45 | |
culture, but surely, we also have an
opportunity to drive that with every | 0:17:45 | 0:17:50 | |
legislation peace that comes our
way. Duty of care reflects that | 0:17:50 | 0:17:55 | |
whole cultural approach, the
underlying, underpinning approach | 0:17:55 | 0:18:00 | |
that we expect our financial
services to take, where the customer | 0:18:00 | 0:18:03 | |
is at the centre, where the
interests of the customer are at the | 0:18:03 | 0:18:07 | |
centre. It is not that financial
services can't make profits, that is | 0:18:07 | 0:18:11 | |
the business they are in, but never
at the expense of that central | 0:18:11 | 0:18:15 | |
interest of the client or customer.
So I really would urge the | 0:18:15 | 0:18:18 | |
government to take seriously this
opportunity to make sure that in an | 0:18:18 | 0:18:24 | |
area where there has been
extraordinary abuse, and I think so | 0:18:24 | 0:18:27 | |
many of us, others talking about
whiplash to the kind of issues that | 0:18:27 | 0:18:36 | |
have been raised around holiday
sickness. I mean, in issue after | 0:18:36 | 0:18:41 | |
issue, we have seen a complete
failure in the culture of bodies | 0:18:41 | 0:18:45 | |
providing those kinds of services.
So tackling that issue head on, not | 0:18:45 | 0:18:50 | |
being afraid to use language that
clearly is around that duty of care, | 0:18:50 | 0:18:55 | |
not considering it too soft or too
difficult, but I think it all should | 0:18:55 | 0:19:02 | |
become a habit. We had to make sure
that in every piece of legislation | 0:19:02 | 0:19:11 | |
that this particular issue is
underscored. This piece of | 0:19:11 | 0:19:17 | |
legislation could be built up. My
lords, we have added our name to the | 0:19:17 | 0:19:26 | |
amendment, together with Baroness
Karina, which takes us back to | 0:19:26 | 0:19:32 | |
regulatory principles and the duty
of care. The noble Lord is right to | 0:19:32 | 0:19:36 | |
have removed the where appropriate
qualification from his early | 0:19:36 | 0:19:41 | |
amendment. | 0:19:41 | 0:19:51 | |
Subtitles will resume
on 'Monday In Parliament' at 2300. | 0:21:57 | 0:22:04 |