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Lord McIntosh of Haringey: Of course that is right. I can think of no example of a complaints procedure which does not require the complaint to go first to the people complained against in order that it can be put right. As the noble Lord, Lord Donaldson, has said, it may simply be a mistake which can be dealt with quickly, or it could be a serious matter which may affect their procedures or policies and which has to be taken very seriously. The quickest way to ensure that that happens is for the complaint initially to go, in this case, to the authority. That is what always happens with complaints procedures and I cannot think of any exceptions.

Take, for example, the notice from the London Transport Passenger Committee on a London bus. It states that complaints should first be addressed to London Transport. If a passenger is not satisfied, he should then go to the London Transport committee, whose address and telephone number is given on the notice.

The independent investigator forms only a part of the protection provided for consumers by this Bill. Later, we shall debate the financial services and markets tribunal and the ombudsman schemes. I can assure the noble Baroness that protection is stacked up line behind line in the Bill. The effect of the Opposition amendments would be to prevent the FSA from having the first opportunity to deal with complaints made against it. It would not be sensible or in accordance with practice to take the FSA out of the process in this way.

Furthermore, what would be the implications for the time and resources of the independent investigator if he were to investigate all complaints in the first instance? Here, we are trying to set up a mechanism for cases which the FSA cannot resolve with complainants rather than every single case that might arise. Nevertheless, the scheme ensures transparency. If, as my noble friend Lord Borrie said, the FSA decides not to investigate a complaint, the investigator has to know about it. At that point, the investigator can take up a complaint if he sees fit. Of course, if the FSA does not settle a complaint and decides that there should be an investigation, that also is where the independent investigator comes in. However, taking the FSA out of the picture in the first instance would be neither right nor efficient.

Two government amendments have been included in this group; namely, Amendments Nos. 30 and 31. Schedule 1(7) to the Bill specifies that the complaints investigator set up by the FSA must be independent of it. We believe that that independence will be reinforced if the investigator is not allowed to employ FSA staff

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to investigate complaints against the FSA. At the moment the Bill would permit FSA staff to be used, which we do not believe is compatible with the level of independence that we seek. These government amendments would prevent the investigator from using FSA staff. I hope that I shall be allowed to move the amendments formally when we come to them.

Lord Jenkin of Roding: I have listened to what the Minister has said about where the complainant should first go with his complaint. However, those of us who have had experience of dealing with constituents may recognise certain problems that can arise. I always used to say that I had no difficulty in dealing with a nutter who had what was clearly a silly problem. I also had no difficulty in dealing with a sensible constituent who was talking nonsense, because he could be persuaded otherwise. But occasionally one saw a nutter who was not talking nonsense.

I can envisage the temptation for someone working down the line in the Financial Services Authority, when encountering a person who does not put his case well, is a little unreasonable, but has in fact touched on a point of some substance, to say to his superiors, "I don't think we need to pay. This chap's barmy. We should write him off". That is the message that would reach the investigator. However, if the complainant had had the opportunity to go to the investigator in the first instance, while the investigator might be subject to the same temptation to write him off, at least he would not have had someone from the FSA saying to him beforehand, "Don't waste your time on this chap". That kind of circumstance lies behind the unhappiness with the provision as it is structured at the moment.

7.45 p.m.

Lord Grabiner: I do not know whether all noble Lords have had access to a paper dated 2nd March issued by the FSA. I am entitled to assume that it was not sent only to me because it states that copies have been distributed to all noble Lords who spoke in the debate on Second Reading.

What the document says in terms on the point before us is that, if the FSA decides in any particular case to decline to meet the complaint by accepting responsibility for that complaint, then the FSA will be under a duty to notify the matter immediately to the independent investigator. The problem will not be shuffled under the carpet. It must be passed immediately across to the investigator.

Lord McIntosh of Haringey: I agree with my noble friend. What must be sent immediately to the investigator is the substance of the complaint rather than any form of word picture of the complainant himself.

Lord Faulkner of Worcester: Further to the point made by my noble friend Lord Grabiner, I shall quote from the same document, where it states that,


    "The FSA's complaints scheme will make provision for the Investigator to be notified of all complaints which it receives, whether or not it decides to investigate them itself. Complainants

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    will not necessarily have to await the conclusion of the FSA investigation before requesting that the matter be pursued by the Investigator. Complainants will be informed at the outset of these arrangements".

I am not sure whether all noble Lords have received a copy of this document. Apparently it has been sent to all noble Lords who spoke in the debate on Second Reading. However, it seems to me that this goes a long way towards satisfying the points made by the noble Lord, Lord Kingsland, when moving his amendment. Furthermore, it also picks up on the point made by the Government in their amendments. This seems to be a remarkably detailed attempt to provide an independent investigatory machinery which perhaps other organisations would be interested in following.

If all noble Lords concerned do not have a copy of this document, I think that it would be most helpful if it were made more widely available.

Lord Elton: Can the noble Lord inform the Committee of the status of the document which we have not seen?

Lord Faulkner of Worcester: The document was sent to me as a Member of your Lordships' House who spoke in the debate on Second Reading. It is entitled Independent Investigation of Complaints Against the FSA, "Note by the Financial Services Authority". My copy is dated 9th March, which may mean that it has been sent out at different times.

Lord Jenkin of Roding: I did not speak in the debate on Second Reading. I have not received a copy of the FSA document. Clearly, once I have had an opportunity to read it, we may be able to decide what we shall do about this matter on Report.

Lord Grabiner: Perhaps I may add, first, in response to the question of the noble Lord, Lord Elton, that the opening paragraph of the document states that,


    "This paper summarises the arrangements which the FSA envisages maintaining for the investigation of complaints against itself".

Secondly, it also deals with the point raised by the noble Lord, Lord Kingsland, on the question of ex gratia payments and sets out in some detail an acknowledgement of the concept that it will be responsible for the making of ex gratia payments. The circumstances in which ex gratia payments will be made are identified in some detail, along with the principles to be taken into account when deciding whether and how much should be paid.

Noble Lords may feel that this document is rather critical to our debate. I suspect that it answers most, if not all, of the points raised by these amendments.

Lord Elton: I am most grateful to the noble Lord, Lord Grabiner, for that explanation. It raises the interesting point of what weight should be given to a declaration of intent which is in no way binding on the

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body giving such a declaration. I do not say this in any pejorative sense, merely in a legalistic sense. However, we must consider its weight.

Lord McIntosh of Haringey: That is exactly why I have not relied on that document in my response to these amendments.

Lord Kingsland: In my opening remarks, I referred to that document--I described it as a "memorandum of understanding"--when I talked about the criteria that the FSA said it would apply when making ex gratia payments. Perhaps the Minister would be kind enough to respond to the points I made in that regard. This is not a criticism of the Minister; it is simply an observation. I do not remember him responding to my amendment on ex gratia payments.

Lord McIntosh of Haringey: I did not; it is not included in this group of amendments. Amendment No. 29 is tabled alone. Since the noble Lord, Lord Kingsland, spoke to it, I shall gladly respond and then we can avoid taking it afterwards.

Lord Kingsland: The Minister expressed the view that he hoped that we would move with increasing momentum after the first amendment. I have been happy to oblige.


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