Prudential Regulation Authority Rulebook

7.1

This Chapter applies only to the FSCS.

7.2

The changes to this rule are effective from 23:00 on 31/12/2020.

Subject to Chapter 6, the FSCS may pay compensation in any form and by any method (or any combination of them) that it determines is appropriate including, without limitation:

1. (1) by paying the compensation (on such terms as the FSCS considers appropriate) to a firm with a Part 4A permission to accept deposits or a Gibraltar-based credit institution with an establishment in the UK or another dormant account fund operator which agrees to become liable to the claimant in a like sum;
2. (2) by paying compensation directly into an existing deposit account of (or for the benefit of) the claimant, or as otherwise identified by (or on behalf of) the claimant, with a firm (but before doing so the FSCS must take such steps as it considers appropriate to verify the existence of such an account and to give notice to the claimant of its intention to exercise this power); or
3. (3) (where two or more persons have a joint claim) by accepting communications from and/or paying compensation to any one of those persons where this is in accordance with the terms and conditions for communications and withdrawals of the relevant eligible deposit immediately prior to the transfer of it to the dormant account fund operator.

7.3

If the FSCS is satisfied that, in principle, compensation is payable in connection with any protected dormant account claim, but considers that immediate payment in full would not be prudent because of uncertainty as to the amount of the claimant's overall claim, it may decide to pay an appropriate lesser sum in final settlement, or to make payment on account.

7.4

The FSCS may also decide to make a payment on account or to pay a lesser sum in final settlement if the claimant has any reasonable prospect for recovery in respect of the claim from any third party or by applying for compensation to any other person.

7.5

The FSCS may pay interest on the compensation sum in such circumstances as it considers appropriate.

7.6

Interest under 7.5 is not to be taken into account when applying the limits on the compensation sum payable in respect of a claim for a protected dormant account under 5.2.

7.7

Where the FSCS considers that the conditions in 7.4 are satisfied but, in relation to a class of claim, in order to provide fair compensation for the generality of such claims it would be appropriate to take the approach in (1) and (2) rather than pay an appropriate lesser sum in final settlement or make a payment on account, it may for that class of claim:

1. (1) receive whether by assignment, transfer or operation of law the whole or any part of a claimant's rights against the dormant account fund operator, or against any third party, or both on such terms as the FSCS thinks fit; and
2. (2) disregard the value of the rights so received in determining the claimant's overall claim.