The rules and guidance in this chapter are intended to promote confidence in the market at Lloyd's, and to protect certain consumers of services provided by the Society in carrying on, or in connection with or for the purposes of, its regulated activities. They do this by ensuring that there are adequate and effective arrangements to handle and resolve complaints from members about the conduct of certain activities within the Lloyd's market by the Society or by underwriting agents.

The Financial Ombudsman Service will not be able to deal with these complaints and separate rules and guidance are therefore required.

Complaints from policyholders, and complaints from members about members' advisers, are dealt with in LLD 6, DISP 1.7 and DISP 2.5.3 G.

In establishing the arrangements referred to in LLD 7.2.1 R the Society should have regard to:

1. (1)

   the likely number of complaints it will receive; and

2. (2)

   the nature and complexity of the complaints it is likely to receive and investigate.

The arrangements referred to in LLD 7.2.1 R should have the following features.

1. (1)

   They should allow for complaints to be made by any reasonable means.

2. (2)

   The complaints handling policy and arrangements should be published and be made available to members, former members and underwriting agents.

3. (3)

   Copies of the documents referred to in (2) should be sent to a complainant as soon as a complaint is received.

4. (4)

   The Society should ensure that its employees and those of underwriting agents are aware of the complaints handling policy and arrangements, and should endeavour to ensure that they act in accordance with them.

5. (5)

   All complaints should be investigated promptly and wherever possible provision should be made for review of that investigation by someone who was not involved in the matter complained of.

6. (6)

   Appropriate management controls should be put in place to ensure that complaints are handled fairly, impartially and consistently and that recurring or systemic problems can be identified and remedied.

7. (7)

   Complaints should be resolved speedily at the earliest stage possible.

8. (8)

   If a complaint cannot be resolved speedily, a letter of acknowledgement should be sent promptly, indicating when the complainant can expect a substantive response.

9. (9)

   All responses to complaints should adequately address the subject matter of the complaint.

A response to a complaint should be sent within four weeks of its receipt. This should:

1. (1)

   accept the complaint and where appropriate offer redress (financial or otherwise); or

2. (2)

   reject the complaint and give reasons for doing so; or

3. (3)

   explain that it has not yet been possible to resolve the complaint and that more time is needed to do so, giving reasons for the delay and stating when a further response will be made.

If a complaint has not been resolved within eight weeks from the date on which the Society received it, the complainant should be told that more time is needed and reasons for the delay should be given, with a date when the complainant will get a further response.

At the end of the eight week period referred to in LLD 7.2.5 G, or at the time it sends a substantive response (if this is earlier), the Society should also send the complainant information on:

1. (1)

   any right to refer the complaint:

   1. (a)

      to the Lloyd's Members' Ombudsman if the complaint relates to the matters identified in LLD 7.2.1 R (1) or LLD 7.2.1 R (2); or

   2. (b)

      to the Lloyd's Arbitration Scheme if the complaint relates to the matters identified in LLD 7.2.1 R (3) or LLD 7.2.1 R (4); or

   3. (c)

      to any other independent dispute resolution scheme that may, pursuant to LLD 7.5.1 R, replace either of the schemes referred to in (a) and (b); and

2. (2)

   arrangements and procedures for referring the complaint.

Any redress accepted by a complainant should be provided promptly.

Where financial redress is appropriate, the aim should be to return the complainant to the position he would have been in had the acts or omissions giving rise to the complaint not occurred.

The redress referred to in LLD 7.2.8 G should include a reasonable rate of interest on sums to which the complainant would have been entitled but for the acts or omissions in question.

All correspondence and literature about the Society's handling of complaints should be in plain language.

The Society should make records relating to complaints from members and former members involving allegations that the complainants have suffered, or may suffer, financial loss, material distress or material inconvenience.

The records created under LLD 7.3.1 G should be retained for a minimum period of three years from the date of receipt of a complaint.

Within one month of the periods ending June and December in each calendar year, the Society should give the FSA a report containing the following information:

1. (1)

   the number of complaints received from members and former members during that period involving allegations that the complainants have suffered, or may suffer, financial loss, material distress or material inconvenience;

2. (2)

   a summary of the nature of these complaints;

3. (3)

   the number of these complaints resolved or rejected;

4. (4)

   the amount of money paid to each complainant referred to in (1) as redress and any other form of redress made; and

5. (5)

   the number of these complaints which have been referred to the Lloyd's Arbitration Scheme, the Lloyd's Members' Ombudsman or any other independent dispute resolution scheme that may replace either of these schemes.

For the purposes of the report referred to in LLD 7.4.1 G, "complaints resolved" include complaints where the Society has completed its consideration of the complaint and either knows the complaint has been resolved to the complainant's satisfaction or has no reason to suspect otherwise.

The schemes to which LLD 7.5.1 R currently refers are the Lloyd's Arbitration Scheme and the Lloyd's Members' Ombudsman respectively, but the Society may maintain other independent dispute resolution schemes in addition to, or instead of, either of these schemes.

The schemes referred to in LLD 7.5.1 R should be operationally independent of the Society.

An individual member or former member who was an individual member should not have access to the schemes referred to in LLD 7.5.1 R unless the complaints arrangements maintained by the Society have failed to resolve the complaint to his satisfaction within eight weeks of receiving it.

The Society should give the FSA adequate notice of all proposed changes to the byelaws relating to the schemes referred to in LLD 7.5.1 R.

When considering what is required to ensure the operational independence of the schemes referred to in LLD 7.5.1 R, or proposed changes in such schemes, the Society should take account of similar arrangements operated by the Financial Ombudsman Service.