Clauses are removed in rush to pass Financial Services Bill

The government has dropped plans to allow class actions against financial institutions.

As part of the rush to get the Financial Services Bill enacted, financial services secretary Lord Myners agreed to the removal of clauses that would have permitted class actions.

Law firm Beachcroft’s financial services partner, Mathew Rutter, said: “When the bill was published, we called it a dangerous cocktail.

“With some of the more toxic elements removed, and some equally dangerous amendments headed off, the Act is not as lethal as it might have been.

“This will come as a great relief to firms, not because they oppose the principle of redress for consumers, but because these provisions had not been fully thought through; much of the detail needed to assess them was missing.”