The FSA wants advisers to provide 100% compensation to clients who have suffered losses, even if it was not the firm's fault, according to a City law firm.
Reynolds Porter Chamberlain (RPC) said the decision, outlined in an FSA note to Parliament, "reverses the basic principle of UK law". Currently, a firm can decline to pay compensation if they are satisfied a client's losses were beyond their control - known as the law of "causation". Simon Laird, a partner at RPC, said advisers would be "very disappointed" if they were forced to fully compensate customers for losses that may be unrelated to a minor technical breach of the rules - and that the decision "flies in the face of common sense". "Effectively these changes to the law could ...
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