ABSTRACT
The development of consumer rights within UK and EC law has been largely associated with measures which define rights in significant detail and by reference to particular contexts. This trend is particularly evident in the area of financial products, where consumer rights are derived from a complex web of different legal provisions, some of which are specifically designed for the financial sector and others which are of more general application. Rather than solving the problem of information asymmetry in financial contracting, legal rules and regulation may, as a result of their complexity, be exacerbating the problem. One solution to this problem may be to devise mechanisms that allow broad standards to be developed which express the purpose and objective of the detailed rules but which can operate without the technical complexity. An example of this approach is the basis on which the Financial Ombudsman Service (FOS) in the UK makes decisions on cases (which can be broadly defined as consumer cases) falling within its jurisdiction. A related issue is that of legal certainty. Using broad standards as a proxy for detailed rules may carry benefits in terms of making consumer rights more transparent and accessible but poses the risk that legal certainty may be compromised. However, my contention is that, at least in the context of financial regulation and perhaps also in some other areas, the trend towards detailed rules has gone too far and has not delivered legal certainty. Instead of promoting legal certainty, detailed rules have instead drawn attention away from their purpose and objectives in a way that has not served the interest either of consumers or providers of financial products. The successful operation of the broad standard employed by the FOS suggests that this approach might well be adopted in other regulatory domains that focus on consumer protection.
