Nav: Home

Is it time for a new financial services tribunal?

January 16, 2018

A new article published in Capital Markets Law Journal argues that consumers and banks could benefit from the creation of a quick and inexpensive financial services tribunal, modeled on the Employment Tribunals, to resolve substantial disputes between banks and small and medium sized companies.

The paper argues currently the English High Court is very successful at resolving wholesale financial markets disputes. The Financial Ombudsman's Service is good at resolving consumer's low-value financial disputes. But there is a large gap in the mid-market area, where disputes between financial institution and small and medium enterprises fall.

The paper argues that the gap could be filled by a specialist financial services tribunal, modeled on the Employment Tribunals. At low cost these platforms have successful leveraged the high-value English Bench and Bar to supply quality dispute resolution and law creation to the markets they serve

The article maintains that financial institutions in England could make money through this reform because international demand for credit supplied from England would increase due to increased business from mainland Europe (dispute resolution is cheaper in the rest of Europe and businesses may currently be avoiding English financial services due to high dispute resolution cost). The paper also maintains that the financial services industry would save money by increased efficiency that will come from the tribunal providing definitive interpretations of regulations that regulators do not currently produce. Definitive rulings of the tribunal on the meaning of regulations could reduce cost of compliance and remove the barrier such costs create to innovation and growth.

Small and medium sized enterprises have been vocal in their push for a fairer means of redress for consumers from banks for alleged violations regarding the selling of complex financial products. The paper appeals directly to the banks to support a specialist, quick and inexpensive financial services tribunal to resolve substantial disputes between banks and their customers, modeled on the Employment Tribunals.

Employment Tribunals, the public bodies in England and Wales and Scotland with jurisdiction to hear many kinds of disputes between employers and employees, were created due the Industrial Training Act 1964. The paper argues that those tribunals, the first forum where women could bring sex discrimination claims, moved employment culture on from common law notions of 'master and servant' - still the language of labor markets in the 1960s - to the culture we know today; Financial Services Tribunals could have the same positive effect on banking culture.

Parliament is scheduled to debate these proposals on January 18.

"The financial services industry is not so foolish to think that everyone is going to love it all the time," said the paper's author, Richard Samuel. "But thankfully it is sensitive to the danger of alienating the support of small and medium sized businesses, a key political constituency on which the policies necessary for the industry's success depend. The cost of losing trust amongst its natural support would be high indeed. Is this an element of the cost-benefit analysis that the industry should perform when considering the merits of offering small businesses access to justice through a common law tribunal? It is for the industry to decide."
This is the third and final article in a series of three in Capital Markets Law Journal. The paper "The FCA has listened. Banks, now it's in your interest to listen too" will be available at:

Direct correspondence to:

Richard Samuel
3 Hare Pl, London EC4Y 7BJ, UK

To request a copy of the study, please contact:

Daniel Luzer

Sharing on social media? Find Oxford Journals online at @OxfordJournals

Oxford University Press USA

Related Paper Articles:

'A litmus paper for CO2:' Scientists develop paper-based sensors for carbon dioxide
A new sensor for detecting carbon dioxide can be manufactured on a simple piece of paper, according to a new study by University of Alberta physicists.
Researchers grow cells in 'paper organs'
Long before scientists test new medicines in animals or people, they study the effects of the substances on cells growing in Petri dishes.
Moneyball advantage peters out once everyone's doing it: Rotman paper
Sixteen years after author Michael Lewis wrote the book Moneyball, every Major League Baseball (MLB) team uses the technique.
New paper on the phylogeny of the Brassicaceae
A recent study from the Max Planck Institute for Plant Breeding Research in Cologne, published in the New Phytologist, helps resolve these issues by reporting new insights into the relationships among Brassicaceae species
Write with heat, cool and then repeat with rewritable paper
Even in this digital age, paper is still everywhere. Often, printed materials get used once and are then discarded, creating waste and potentially pollution.
A paper battery powered by bacteria
In remote areas of the world, everyday items like electrical outlets and batteries are luxuries.
Scientists create biodegradable, paper-based biobatteries
The batteries of the future may be made out of paper.
Paper: Surprise can be an agent of social change
Surprising someone -- whether it's by a joke or via a gasp-inducing plot twist -- can be a memorable experience, but a less heralded effect is that it can provide an avenue to influence people, said Jeffrey Loewenstein, a professor of business administration at the Gies College of Business at Illinois.
Paper-folding art inspires better bandages
Cutting kirigami-style slits in stretchy films could make for stickier bandages, heat pads, wearable electronics, according to a new study by MIT engineers.
Scientists' warning to humanity 'most talked about paper'
Twenty-five years after the first World Scientists' Warning to Humanity, a new report is continuing to gain momentum and is already one of the most talked about papers globally since Altmetric records began.
More Paper News and Paper Current Events

Trending Science News

Current Coronavirus (COVID-19) News

Top Science Podcasts

We have hand picked the top science podcasts of 2020.
Now Playing: TED Radio Hour

Our Relationship With Water
We need water to live. But with rising seas and so many lacking clean water – water is in crisis and so are we. This hour, TED speakers explore ideas around restoring our relationship with water. Guests on the show include legal scholar Kelsey Leonard, artist LaToya Ruby Frazier, and community organizer Colette Pichon Battle.
Now Playing: Science for the People

#568 Poker Face Psychology
Anyone who's seen pop culture depictions of poker might think statistics and math is the only way to get ahead. But no, there's psychology too. Author Maria Konnikova took her Ph.D. in psychology to the poker table, and turned out to be good. So good, she went pro in poker, and learned all about her own biases on the way. We're talking about her new book "The Biggest Bluff: How I Learned to Pay Attention, Master Myself, and Win".
Now Playing: Radiolab

First things first: our very own Latif Nasser has an exciting new show on Netflix. He talks to Jad about the hidden forces of the world that connect us all. Then, with an eye on the upcoming election, we take a look back: at two pieces from More Perfect Season 3 about Constitutional amendments that determine who gets to vote. Former Radiolab producer Julia Longoria takes us to Washington, D.C. The capital is at the heart of our democracy, but it's not a state, and it wasn't until the 23rd Amendment that its people got the right to vote for president. But that still left DC without full representation in Congress; D.C. sends a "non-voting delegate" to the House. Julia profiles that delegate, Congresswoman Eleanor Holmes Norton, and her unique approach to fighting for power in a virtually powerless role. Second, Radiolab producer Sarah Qari looks at a current fight to lower the US voting age to 16 that harkens back to the fight for the 26th Amendment in the 1960s. Eighteen-year-olds at the time argued that if they were old enough to be drafted to fight in the War, they were old enough to have a voice in our democracy. But what about today, when even younger Americans are finding themselves at the center of national political debates? Does it mean we should lower the voting age even further? This episode was reported and produced by Julia Longoria and Sarah Qari. Check out Latif Nasser's new Netflix show Connected here. Support Radiolab today at