How the PRA’s new Early Account Scheme impacts individuals

We are defending financial institutions from multiple claims for breach of the so called Quincecare duty and have seen claimant law firms increasingly seek to expand the scope of the duty to try to make financial institutions liable for any frauds taking place through their accounts. Where a bank is unknowingly or innocently “mixed up” in a fraud as a result of duly complying with the customer’s instructions (who are not themselves complicit in or aware of the fraud), the question is in what circumstances should the bank be held liable for any loss suffered on the basis of its purported greater ability to detect fraud. The answer to this question, eagerly awaited by many, has finally come from the Supreme Court in its judgment in Philipp v Barclays Bank UK PLC [2023] UKSC 25.

On 29 July 2022, funeral plan providers (“FPPs”) will be brought within the remit of the Financial Conduct Authority (the “FCA”). While entering into a funeral plan contract as a provider has been a regulated activity for many years, the exclusions introduced by the government in 2001 meant that the FCA has not authorized any firm for the purpose of entering into funeral plan contracts. The 2018 Call for Evidence and subsequent consultation conducted by HM Treasury, as well as the FCA’s own information gathering, identified a number of potential harms to customers arising from practices which have not been adequately regulated by the former industry voluntary regulator, the Funeral Planning Authority (“FPA”). This is now changing for both providers and distributors of pre-paid funeral plans. Below, we consider some of the key risks and opportunities this presents to those impacted by these changes.

Yesterday’s joint Discussion Paper (DP21/2) published by the Bank of England, Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA, together “the regulators”) on “Diversity and inclusion in the financial sector – working together to drive change” signals a step change in the degree of regulatory focus upon diversity and inclusion in financial services in the UK. While this theme has featured increasingly in FCA and PRA speeches – most pointedly in the speech by Nikhil Rathi on 17 March 2021 entitled “Why diversity and inclusion are regulatory issues” – yesterday’s DP points to a desire on the regulators’ part to create new regulation and to use their “hard/soft” supervisory powers to drive D&I improvements via the existing regulatory framework. We welcome the regulators’ joint efforts to clarify their expectations in relation to these critical topics and engage with all stakeholders on how to increase diversity and inclusion across the financial services industry in a sustainable way. As the regulators signal, the challenge will be doing this in a proportionate way reflecting the diversity of the financial services industry itself and in a way that is sensitive to existing requirements and pending proposals (including the FCA’s proposals for a new Consumer Duty, which we discussed in our separate blog). Below we highlight six of the key points that emerge from the DP.