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Legality of payment protection insurance compensation arrangements examined on judicial review


  • Joanna Gray


Purpose - The purpose of this paper is to discuss Design/methodology/approach - The paper outlines the facts surrounding the case and comments on the decision. Findings - This is a lengthy judgment that is dense in closely reasoned interpretative analysis of the Financial Services and Markets Act 2000 schema for regulation of the conduct of retail financial business and attendant redress mechanisms. Originality/value - This keenly awaited decision raises several issues of wider public interest about the design and operation of the regulatory environment for retail finance in the UK. In the context of the FSA's emphasis over the past few years of its “Treating Customers Fairly” programme of work the legality of the action taken by both FSA and the Financial Ombudsman Service (FOS) to effect a broad measure and depth of consumer redress in respect of what they judged to be widespread incidence of inappropriate sales of payment protection insurance (PPI) by banks in particular came under intensive scrutiny from the Court in what is a fascinating judgment for regulatory lawyers.

Suggested Citation

  • Joanna Gray, 2011. "Legality of payment protection insurance compensation arrangements examined on judicial review," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 19(4), pages 396-406, November.
  • Handle: RePEc:eme:jfrcpp:v:19:y:2011:i:4:p:396-406

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    References listed on IDEAS

    1. Acharya, Viral V., 2009. "A theory of systemic risk and design of prudential bank regulation," Journal of Financial Stability, Elsevier, vol. 5(3), pages 224-255, September.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
    3. Helmut Elsinger & Alfred Lehar & Martin Summer, 2006. "Risk Assessment for Banking Systems," Management Science, INFORMS, vol. 52(9), pages 1301-1314, September.
    4. Huang, Xin & Zhou, Hao & Zhu, Haibin, 2012. "Assessing the systemic risk of a heterogeneous portfolio of banks during the recent financial crisis," Journal of Financial Stability, Elsevier, vol. 8(3), pages 193-205.
    5. Celine Gauthier & Alfred Lehar & Moez Souissi, 2010. "Macroprudential Regulation and Systemic Capital Requirements," Staff Working Papers 10-4, Bank of Canada.
    6. Drehmann, Mathias & Tarashev, Nikola, 2013. "Measuring the systemic importance of interconnected banks," Journal of Financial Intermediation, Elsevier, vol. 22(4), pages 586-607.
    7. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
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