UK unclaimed assets scheme

Government Response to TSC’s Eleventh Report of Session 2006-07

This is the Government’s response, published on 8 October 2007, to the Treasury Select Committee report . The Government will introduce legislation to establish a statutory right for consumers to reclaim their money from a reclaim fund at any time. The FSA will authorise the reclaim fund, meaning that it will bring the reclaim fund within the Financial Services Compensation Scheme (and the Financial Ombudsman Service, in the event of disputes). Given the sector’s ongoing support for a voluntary scheme, the Government does not propose to include reserve powers to establish a compulsory scheme at this time. It is noted that the Government is not proposing to treat different parts of the banking and building society sectors differently.

Payment Services Directive and SEPA

On 15 October 2007, the European Council adopted a directive that will make easier and reduce the cost of payments in the EU. The directive (3613/07) establishes a legal framework for payment services and encourages competition, harmonises market access requirements for non-bank payment service providers; increases market transparency and standardises rights and obligations for users and providers of payment services.

It complements the “single euro payments area” (SEPA): an initiative the payments industry has committed itself to establishing by 2010. SEPA will have integrated payment infrastructures and payment products enabling money to move freely between users, regardless of where they are situated.

The Payment Services Directive must be brought into force by member states by 1 November 2009.

Scope of “all monies” guarantee

The court considered the scope of an “all monies” clause in a guarantee on 10 October, 2007, and ruled that the function of the court was to ascertain the presumed intention of the parties.  In this case, the parties had not contemplated that the guarantee would apply to assigned debts that were not associated with the liabilities of the companies originally envisaged when the guarantee was taken.

The case is Ing Lease (UK) Ltd v Harwood [2007] All ER (D) 131 Oct.  It isn’t on BAILII yet but you can check on their site here.

Guidance for bond markets and retail cascades

A statement of good practice on bond market transparency for retail investors has been published by ICMA, the International Capital Market Association.  The standard, which will help retail investors to get better information about price and liquidity in the bond markets, does not impose new reporting requirements on the industry. 

And ICMA has also published a guidance note on debt securities “retail cascades” which will help issuers comply with the disclosure requirements of the Prospectus Directive Regulation.  When preparing a retail cascade prospectus, often much of the necessary information is not known and this note helps negotiate those tricky waters.

Credit agreements for consumers – directive

The EC will settle down to a second reading of the draft directive on credit agreements for consumers on 12 December 2007.  This is the stage at which approval will be granted if thought fit.  On the 20 September, the Council of the EU published the common position it adopted for the repeal of Directive 87/102/EEC and supporting the adoption of the draft directive.

 

The revised directive aims at harmonising the laws, regulations and administrative procedures of the Member States on agreements covering credit for consumers.

 

Lasting powers of attorney

The Lasting Power of Attorney replaced Enduring Powers of Attorney last Monday, 1 October 2007 as the power that can operate after a person ceases to have mental capacity.  See Bank Law Blogger’s post about LPAs last June on what banks need to consider when dealing with LPAs. 

The Law Society has produced a practice note for solicitors advising clients on LPAs or acting as attorney under an LPA.

Practicalities of CA 06 implementation

Companies House have published guidance on filing resolutions, access to the register of members and the changes to Tables A & C to assist with the implementation of the relevant parts of the Companies Act 2006 on 1 October 2007.

OFT and current accounts

The OFT will publish its market study of current accounts during December 2007, the reasons for which can be seen here.  This study was announced in April this year.

Securities-lending code of best practice

The International Corporate Governance Network have published a new version of the Securities Lending Code of Best Practice. The Code (first out in 2005) sets out three principles which apply to all areas of investment practice and clarifies the responsibilities of all parties engaged in stock lending.

s 75 CCA appeal has started in House of Lords

The appeal to the House of Lords on the applicability of s  75 Consumer Credit Act 1974 to overseas transactions has started, on 2 October 2007.  The issue is whether credit card issuers are jointly liable with overseas suppliers if the consumer has a valid claim for misrepresentation or breach of contract by the supplier, where the price of the purchase is between £100 and £30,000.  The hearing is expected to last two days and a judgment will be handed down at a later date.

The High Court ruled in November 2004 that section 75 applied to domestic credit card transactions only.  Then the Court of Appeal extended that to overseas transactions (on 22 March 2006).  Credit card issuers appealed that decision and this is the hearing.

The House of Lords judgment will show whether s. 75 covers overseas transactions where:

•  a consumer uses a UK credit card to buy goods abroad
•  a consumer orders goods from a foreign supplier while abroad for delivery into the UK
• a consumer in the UK buys goods which are delivered to a UK address from overseas by telephone, mail order or over the internet
• there is face-to-face pre-contract dealings with a foreign supplier temporarily in the UK, or with a UK agent of a foreign supplier, but the contract is not completed in the UK.