Bridging the Gap: A level playing field for financial disputes

Joint Inquiry: All Party Parliamentary Groups on Fair Business Banking and Alternative Dispute Resolution

The All Party Parliamentary Groups on Fair Business Banking and Alternative Dispute Resolution are launching an Inquiry into suitable mechanisms that can be employed to provide a long-term dispute resolution platform for businesses that find themselves in a financial dispute. This follows the Backbench Business Debate in the House of Commons on 15 December 2016 on the need to create a level playing field for financial disputes between banks and businesses.

With the advent of another compensation scheme to be set up by RBS, the spotlight is once again on how we can resolve major complaints between businesses and their lender in a timely manner. CEO of the FCA, Andrew Bailey, stated in evidence to the Treasury Select Committee in July 2016 that the IRHP mis-selling compensation scheme has not been entirely successful. He also stated that he did not believe that the FCA was the correct vehicle for such schemes. One-off schemes like this cannot act as a sticking-plaster for recurring issues. There is a need a systematic, holistic approach to protection, dispute resolution and redress.

The purpose of the Inquiry will be to analyse the current landscape and present a suite of recommendations that can be adopted on a voluntary and statutory level to address the current gap in the system. It will focus on what forms of dispute resolution may be suited to bridge such a gap, with many such disputes falling out of scope of the Financial Ombudsman Service yet not being large enough to make court an economically viable option.

Alternative dispute resolution (ADR) mechanisms are a range of procedures that serve to resolve disputes generally involving the intercessions and assistance of a neutral third party to promote a binding settlement or decision. ADR is recognised as a confidential, cost-effective and faster alternative to litigation. In being, on the whole, less adversarial than court it helps businesses preserve commercial relationships despite contractual difficulties. Its authority is derived from private agreement, with the courts having an important enforcement role.

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The Committee will also examine the roles the Small Business Commissioner, the Financial Ombudsman, and a potential Financial Tribunal can play in the system of dispute resolution. The Committee has a committed contact at the FCA, and will consult with them to ensure that any recommendations put forward dovetail with the current regulatory framework.

There are to be three evidence sessions, and the Committee consists of:

George Kerevan MP, Treasury Select Committee, SNP, Chair APPG FBB

John Howell OBE MP, , Cons, Chair APPG ADR

Anna Turley MP, BEIS Select Committee, Labour

Mark Williams MP, Lib Dem, Vice Chair APPG FBB

Lord Dyson, former Master of the Rolls, Justice of the Supreme Court of the and Lord Justice of the Court of Appeal of England and Wales and Deputy Head of Civil Justice

Lord Naseby, Cons, Member of Parliament for Northampton South 1974-1997, former Chairman of Ways and Means and Deputy Speaker

Lord Cromwell, Crossbench, EU Justice Sub Committee, former Vice-President of Barclays Wealth and Investment Management

Tony Baron, Chairman, Economics, Taxation and Financial Affairs Policy Unit at the Federation of Small Business

Nikki Turner, Director, SME Alliance

Stephen Rosen, Head of the Banking and Financial Disputes group at Collyer Bristow Solicitors

Cat Maclean, Partner, MBM Commercial, Solicitor Advocate with extended Rights of Audience in the Court of Session and the Supreme Court, member of the Lord President’s Consultative Committee on Commercial Actions, Scottish member of the Financial Services Lawyers Association, Scottish representative of the International Banking Litigation Network

Heather Buchanan, Director of Policy and Strategy, APPG Fair Business Banking, member of Banking Futures Steering Group

Chris Wilford, Head of Policy, Public Affairs and Research, Chartered Institute of Arbitrators

Hansard 16.12.2016: https://hansard.parliament.uk/commons/2016-12-15/debates/6783C8F6-7370-4CD0-B607- 7834A68AD2A7/CommercialFinancialDisputeResolutionPlatform

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APPG on Fair Business Banking

Chair and Registered Contact: George Kerevan MP

Vice Chairs: MP, Helen Goodman MP, Calum Kerr MP, Mark Williams MP, Michelle Thomson MP, Jonathan Edwards MP

Public enquiry point:

Heather Buchanan, Director of Policy and Strategy [email protected]

Fiona Sherriff, Director of Communication [email protected]

Jackie Roberts, Director of Research [email protected]

APPG on Alternative Dispute Resolution

Chair and Registered Contact: John Howell MP

Vice Chairs: Bob Neill MP, David Hanson MP

Public enquiry point:

Chris Wilford, CIArb Head of Policy, Public Affairs and Research [email protected]

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An All Party Parliamentary Group (APPG) is an interest group that occupies a strategic and effective position within Parliament.

It is cross-party, with a minimum number of parliamentarians from the Government and the official opposition, and cross-house, made up of both peers and MPs.

The APPG on Fair Business Banking is a platform through which businesses, professionals and trade bodies can discuss issues regarding commercial banking and its role in the life cycle of a business, and through which parliamentarians can access information on banking, finance and related issues, including business rescue and insolvency, on behalf of constituents.

The APPG on ADR brings together parliamentarians interested in dispute resolution, civil justice reform and alternatives to court. The group organises regular evidence sessions in Parliament.

As a cross-party group, the APPG is an effective vehicle to effect meaningful change via the Parliamentary system. The Group’s status is that of an APPG is bound by the rules set out by The Office of the Parliamentary Commissioner for Standards. It does not have charitable status, or official status in the House, nor is it funded by Parliament. It relies wholly on the participation and contribution of parliamentarians, industry members and stakeholders committed to creating a strong platform for business in the UK to thrive.

The APPG on Fair Business Banking is co-ordinated and administered via the APPG on Fair Business Banking Secretariat, the FBB Foundation. The Chartered Institute of Arbitrators (CIArb) provides the secretariat for the APPG on ADR.

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