Financial Services and Markets Act 2000

Financial Services and Markets Act 2000

2000 CHAPTER 8

Commentary on Sections

Part X: Rules and Guidance

Chapter I: Rule-Making Powers

Section 150: Actions for damages

278. This section sets out the circumstances in which persons who suffer loss as a result of a rule breach by an authorised person have a right of action for damages for resulting losses.  This section does not remove any common law cause of action which a person might otherwise have.  It allows a class of people to recover losses just by showing that there has been a breach of a rule as a result of which they have suffered loss rather then having to rely on that breach as evidence of negligence.

279. The section creates a presumption that private persons (as defined by the Treasury) who suffer loss as a result of a rule breach have a right of action for damages.  The right does not extend to breaches of financial resources rules, listing rules or other rules which may be specified by the Authority.  Customers would only generally suffer loss as a result of a breach of financial resources rules if the authorised person concerned became insolvent.  In those circumstances, the relevant person’s rights in the insolvency would not be altered by a separate right of action.  Additionally, it might not be appropriate to attach a right of action to certain other rules, such as those drawn at a high level of generality.

280. There is a presumption that persons other than private persons do not have a right of action for damages, although the Treasury may by regulations specify that breaches of certain rules are actionable by non-private persons.