WHAT DO YOU NEED TO KNOW? #2


This is our second note dealing with issues arising from the Coronavirus outbreak which may be of interest to those dealing with financial services disputes and litigation.

The plethora of online guidance and commentary arising from COVID 19 continues to grow and is challenging to track. In summary, over the last fortnight, we have seen the Courts implement a new Practice Direction for remote hearings whilst also acknowledging that possession proceedings will unlikely be progressed. The FCA has published guidance for consumers and firms on issues of forbearance and scam avoidance. In relation to LIBOR transition plans, the FCA has provided: “the central assumption that firms cannot rely on LIBOR being published after the end of 2021 has not changed and should remain the target date for all firms to meet”. Conversely, flexibility has been shown in the expected timeframes for the implementation by banks of Confirmation of Payee checks.

THE COURT SERVICE

There have been a myriad of updates from the Court over the last two weeks. Some key points to note are:

  • The Government has announced a restriction on evictions and new possession proceedings being issued click here. HHJ Gosnell from the Northern Circuit has vacated all possession actions in Northern Courts during the next three months. He has noted: “In the absence of any further guidance I have decided to vacate and re-list all possession hearings for the next three months. Applications to suspend evictions will be listed and heard urgently. I am not convinced it is in anyone’s interests to evict litigants from their homes to have them wandering around looking for new accommodation when we should be encouraging people to stay at home.”
  • The Business and Property Courts have announced that all hearings before Insolvency and Companies Court Judges are now adjourned generally with liberty for applicants to apply to restore the hearings on an urgent basis.
  • The Court service has prepared a new Practice Direction for Video and Audio Hearings during the Coronavirus. This can be found by clicking here.

THE FINANCIAL OMBUDSMAN SERVICE

FOS’ latest announcement on 23 March 2020 notes that it itself is having to work differently in view of COVID-19 and that FOS’s helplines are open, but only on a limited basis click here.

THE FINANCIAL CONDUCT AUTHORITY

On 20 March 2020, the FCA published new guidance on how it expects mortgage lenders and administrators to treat customers fairly during COVID-19 click here. The guidance provides the following:

  • “Firms should not commence or continue repossession proceedings against customers at this time, given the unprecedented uncertainty and upheaval they face, and Government advice on social distancing and self-isolation. This applies irrespective of the stage that repossession proceedings have reached and to any step taken in pursuit of repossession. Where a possession order has already been obtained, firms should refrain from enforcing it. We consider that commencing or continuing repossession proceedings at this time is very likely to contravene Principle 6 and MCOB 2.5A.1R - absent exceptional circumstances (such as a customer requesting that proceedings continue). We will not hesitate to take appropriate action where necessary. Firms should also ensure that their customers are kept fully informed, and discuss with them the potential consequential impacts of their suspending any moves towards repossession. For example, the effect of remaining in the property on the customer’s remaining equity should be explained. See our information for consumers regarding mortgages during the coronavirus situation.”

The FCA’s guidance also looks at firms’ approaches to unsecured debt products in view of COVID-19 and provides:

  • “In the current climate, we want firms to show greater flexibility to customers in persistent credit card debt. Under our rules, firms are required to take a series of escalating steps to help customers who are making low repayments over a long period. After 36 months of someone being in persistent debt the provider must offer options to help repay the debt more quickly. If customers do not respond within a period set by the firm the card must be suspended. Given the challenges facing many customers at present we think they should be given more time, until 1 October 2020, to respond to firms’ communications. This means that firms would not be obliged by our rules to suspend the cards of non-responders before then.”

In response to increasing numbers of scammers “piggy backing” on COVID-19, the FCA has also published guidance on avoiding Coronavirus Scams. Click here.

UK FINANCE

On 24 March 2020, UK Finance reported on the spending limit for contactless card payments being increased from £30 to £45, with national roll-out beginning from 1 April 2020. Click here. AG has reported separately on this. Click here.

OTHER THIRD PARTIES

  • The Payment Systems Regulator has provided an update on the implementation of Confirmation of Payee (CoP) checks – noting that whilst the deadline to implement CoP checks was 31 March 2020 – it will “not take any formal action in respect of delays to the introduction of CoP ahead of 30 June 2020”. Click here.
  • Experian has published online guidance for consumers who are concerned about protecting their credit file during the COVID-19 pandemic. Click here.

OTHER AG BRIEFINGS

For more information in relation to the Coronavirus outbreak, see our website. Other articles include:

  • Urgent procurement for critical goods, works and services. Click here.
  • Your business frustrated? The COVID-19 Tightrope. Click here.
  • Consumer Finance: Forbearance and COVID 19. Click here.
  • Coronavirus – A data protection compliance perspective. Click here.

Key Contacts

Michael Barnett

Michael Barnett

Divisional Managing Partner, Dispute Resolution
London, UK

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Sally Emerton

Sally Emerton

Partner, Finance Disputes
United Kingdom

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Steve Walpole

Steve Walpole

Managing Associate, Finance Litigation and Professional Negligence
Leeds, UK

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