To ask the Chancellor of the Exchequer, what his Department's policy is on the statutory immunity of the Financial Conduct Authority in cases where it is found to have acted negligently.
11 March 2019
The Financial Services and Markets Act 2000 (FSMA) provides the Financial Conduct Authority (FCA) with immunity from liability in damages, including damages arising as a result of negligence. It is important, however, to bear in mind that this statutory immunity does not confer immunity from (i) claims that property rights protected by Article 1 Protocol 1 of the Human Rights Act 1998 have been unlawfully interfered with, or (ii) claims for judicial review of the FCA's actions.
The statutory immunity of the FCA is important in enabling it to take a robust approach to regulation. This immunity allows the FCA to focus its resources on pursuing its objectives without the distraction of claims that may frustrate these efforts, or the risk that firms can delay supervisory interventions through vexatious litigation.
The FCA’s statutory immunity is held to account by an Independent Complaints Commissioner who can consider complaints about the way the FCA has carried out, or failed to carry out, its role. The Commissioner has powers to recommend the payment of compensation and to require the FCA to publish its response to the recommendation, for example where it decides not to pay compensation.