Alternative Dispute Resolution (ADR)

In December 2014, the FCA and FOS consulted on changes to the Dispute Resolution: Complaints Sourcebook (DISP) in order to implement the Alternative Dispute Resolution (ADR) Directive.

The FCA has since issued a Handbook Notice and final rules here, which enables firms to meet the 9th July deadline.

Please note the new rules apply only to complaints received from 9th July 2015 onwards. The main changes are:

  • FOS will be able to consider complaints where the firm has not already investigated the complaint, but only if both the firm and the client consent;
  • Current complaints time limits will continue to apply. However, firms will be allowed to consent to FOS considering a complaint if it is referred outside the current time limits;
  • There will be prescribed wording for firms to tell clients they consent to waiving the time limits – it is important firms incorporate the appropriate prescribed wording within any final response communication to a client who has complained;
  • The definition of ‘eligible complainant’ will be extended to include professional clients and eligible counterparties, where the person is an individual acting for purposes outside his trade, business, craft or profession; firms need to bear in mind this extended definition of eligible complainant if and when client complaints are received.

The FCA/FOS December consultation also contained separate policy proposals to improve complaints handling. Therefore, we can expect a further policy statement later in the year.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

These rule changes may not have a significant impact on how you deal with client complaints, but you must ensure your complaints handling procedures remain fit for purpose and meet the new requirements.

We will be updating our complaints procedures and templates; these will become available on the 9th July for ATEB clients;

Action Required By You

  • Ensure you understand the changes that come into effect on 9th July and include the appropriate prescribed wording in final response letters to complainants;
  • Review and update your complaints handling procedures;
  • ATEB clients should speak with their account manager as necessary; otherwise contact ATEB here to find out how we can help.

Remember that a further Policy Statement on complaints handling will be issued later this year.

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About the Author

Steve is an ATEB Director and has a deep understanding of all matter regulatory, built up over his 30 years + in the industry. With a training background and a technical brain, he overseas numerous complex projects and client implementation work.

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