Member

Clause 6 goes further. It increases the overriding time limit from six years to 10 years. That is a significant change in itself, but the real concern arises when Clause 6 is read with Clause 10. At present, Section 404 of FSMA allows the FCA to impose a consumer redress scheme where it considers that there has been widespread or regular failure causing loss to consumers. We all know that the impact of such schemes can be enormous. The proposed motor finance consumer redress scheme has been estimated to cost around £9 billion. Under the existing Section 404 framework, the FCA can impose a consumer redress scheme only where there would be a remedy in legal proceedings. In other words, the FCA cannot use a redress scheme to revive claims that would be time barred. That is an important safeguard. It means that the regulatory redress powers broadly track the position that would apply in court.