Upcoming CEDR financial services event: ‘Dialogue with the Regulator’

At a breakfast session on 9 October at Herbert Smith Freehills’ London office, the Centre for Effective Dispute Resolution (CEDR) will convene a debate exploring the role for facilitative discussion and negotiation between regulated firms and their regulators, with a focus on the banking and insurance industries.

The debate, led by Dr Karl Mackie CBE (CEDR Chief Executive), will involve a lively discussion among leading stakeholders in the financial services industry, including:

From the regulators –

  • Tracey McDermott, Director of Enforcement and Financial Crime, Financial Conduct Authority
  • Robert Dedman, Chief Counsel, Regulatory Action Division, Bank of England

In-house Counsel –

  • Joanna Day, Director of Legal Services, Santander
  • Bob Hoyt, Group General Counsel, Barclays
  • Kenneth Underhill, AEG General Counsel, ACE Group

together with contributions from attendees, including lawyers from Herbert Smith Freehills’ leading financial services regulatory team and commercial disputes team.

For more details:  Click here.

To book a place:     Please contact the seminar organisers –  Francesca Gregson at CEDR, fgregson@cedr.com / +44 (0)20 7536 6086.


UK High Court claim struck out as full redress was available under an ADR scheme

The UK High Court recently refused to allow a claim to proceed in relation to mis-selling of an insurance product on the basis that the claimants had already been offered full redress under a formal ADR scheme established in relation to such complaints.   The decision is a further example of the UK courts’ support for ADR and illustrates that the courts’ artillery in this regard is not limited to imposing costs sanctions at the conclusion of litigation (Christopher and Claire Binns v Firstplus Financial Group Plc [2013] EWHC 2436 (QB)).   Continue reading

The rise of ADR in Japan

A number of alternative dispute resolution procedures are available and recognised in Japan – including expert determination, mediation, conciliation, and multi-track dispute resolution processes (ie a combination of different dispute resolution mechanisms such as arbitration and expert determination). Peter Godwin, Managing Partner of Herbert Smith Freehills GJBJ, Tokyo, reviews the increase in ADR usage in certain sectors, as well as the rise of dispute escalation provisions and agreements to negotiate in good faith. Continue reading

Update on ADR in Japan’s financial services sector

Our previous post reported on the “Law Concerning the Promotion of the Use of Alternative Dispute Resolution Procedures” (the “ADR Promotion Law”), which came into effect on 1 April 2007. Under the ADR Promotion Law, 116  institutions from multiple sectors have to date acquired accreditation to help resolve civil disputes outside the Japanese public court system. As a result, the use of settlement procedures in Japan has expanded rapidly. In the financial services sector, the “Financial ADR System” was adopted in October 2010, providing for resolution of disputes by eight designated dispute resolution organisations specified in finance-related laws.   Continue reading

Review of Australia’s consumer external dispute resolution arrangements likely in 2013

Australia’s shadow minister for financial services, Mathias Cormann, has acknowledged that there are legitimate concerns over procedural matters and natural justice in relation to Australia’s Financial Ombudsman Service (FOS) and the Credit Ombudsman Service (COS).

The term ‘ombudman’ derives from Swedish and means an independent official who addresses complaints by investigation and attempts to resolve matters without litigation, usually between customers and organisations. Traditionally deployed to handle complaints and grievances by the general public, the use of ombudsmen has increased in scope and sophistication in recent years.

The FOS and COS have been in place since 1 July 2008, and are due for review in July 2013. “If we are elected to government at the next election, then we will certainly be conducting a review consistent with the Productivity Commission recommendation to assess how the current process is operating” Cormann said.  Continue reading

Hong Kong Financial Dispute Resolution Centre (FDRC) opens

On 19 June 2012 the Financial Dispute Resolution Centre opened to assist financial institutions and their clients to resolve monetary disputes involving claims not exceeding HKD 500,000 (USD 65,000). It is hoped that under the FDRC’s dispute resolution mechanism, an early meeting/mediation between the parties will resolve the dispute. The government’s decision in December 2010 to set up the FDRC upon the completion of a public consultation marked a turning point for the resolution of disputes in the financial sector. The FDRC’s goal is to resolve monetary disputes through “mediation first, arbitration next”.

EU initiatives to promote ADR in consumer and financial services sectors

Together with the consultation on the use of ADR and the resulting legislative proposal, the European Commission is undertaking the following initiatives:

  • The EU Citizenship Report dated October 2010 pledges to facilitate fast and inexpensive out-of-court resolution of consumer problems in the EU by (1) promoting the wider use of mediation by 2013, and (2) exploring proposals for a Europe-wide online ADR system for e-commerce transactions by 2012.
  • The Commission Communication towards a Single Market Act dated November 2010 (see here) says that the European Commission will adopt a Recommendation in 2011 on the network of ADR systems for financial services. The stated aim is to ensure that simple, reasonably priced out-of-court settlement procedures are established to deal with cross-border consumer disputes.

Civil Mediation Council (CMC) guidance on mediators’ obligations under the Proceeds of Crime Act 2002

Section 328 of the Proceeds of Crime Act 2002 (PoCA) provides that it is an offence for a person to be involved in an arrangement that he knows or suspects will facilitate the acquisition, retention, use or control of criminal property by or on behalf of another person. Members of the legal profession and mediation community had previously questioned whether Section 328 could apply to legal professionals involved in mediation where the settlement falls foul of the PoCA. The CMC guidance note emphasises the need for all training providers, mediation providers and individual mediators to study previous CIArb guidance carefully so as to ensure that mediators never run the risk of incurring criminal liability under the PoCA. Withdrawal from the mediation/a report under the PoCA may be necessary where first, there are no existing or contemplated proceedings or where the link between mediation and any proceedings is tenuous; and second, where, if proceedings do exist, any settlement does not reflect the parties’ respective positions in the proceedings and is known or suspected to be no more than a pretext for agreeing on the acquisition, retention, use or control of criminal property. Continue reading

Creation of ADR framework for financial services in Japan

“The Law Concerning the Promotion of the Use of Alternative Dispute Resolution Procedures” (the “ADR Promotion Law”) was promulgated on 1 December 2004 and came into effect on 1 April 2007. This law allows the Minister of Justice to give accreditation to private-sector organisations that help resolve civil disputes outside the Japanese public court system. On 24 June 2009, a Law on the Partial Revision of the Financial Instruments and Exchange Law for 2009 (Law No 58) was promulgated, which applies the accreditation system created by the ADR Promotion Law to various financial sub-sectors by revision of laws such as the Insurance Business Law.

Industry associations have until 23 June 2010 to obtain accreditation. The ADR institutions of the Japan Securities Dealers Association, The Life Insurance Association of Japan, The General Insurance Association of Japan, and the Japanese Bankers Association and the Trust Companies Association of Japan have recently announced their intention to obtain accreditation.