Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

COMP 8.1 Application and Purpose


COMP 8.1.1 R

This chapter applies to the FSCS.

COMP 8.1.2 G

It is also relevant to claimants.


COMP 8.1.3 G

In some circumstances, it may be appropriate for the FSCS to reject an application for compensation, or withdraw an offer of compensation. The purpose of this chapter is to set out when those circumstances arise.

COMP 8.2 Rejection of application for compensation

Inaccurate or incomplete applications9

COMP 8.2.1 R

If an application for compensation contains any material inaccuracy or omission, the FSCS may reject the application unless this is considered by the FSCS to be wholly unintentional.

COMP 8.2.2 G

A rejection under COMP 8.2.1 R does not mean that the claimant cannot receive compensation. A rejected application may be resubmitted, with the appropriate amendments. An application rejected under COMP 8.2.3 R may be resubmitted if COMP 8.2.5 R applies.1

Limitation periods and claims extinguished by operation of law9

COMP 8.2.3 R

The FSCS must reject an application for compensation if:

  1. (1)

    the FSCS considers that a civil claim in respect of the liability would have been defeated by a defence of limitation at the earlier of:

    1. (a)

      the date on which the relevant person7(or, where applicable, a successor) 7is determined to be in default; and

    2. (b)

      the date on which the claimant first indicates in writing that he may have a claim against the relevant person7(or, where applicable, a successor);

    unless COMP 8.2.4 R or COMP 8.2.4A R6 applies; or

  2. (2)

    the liability of the relevant person7(or, where applicable, a successor) 7to the claimant has been extinguished by the operation of law, unless COMP 8.2.5 R applies.1

COMP 8.2.4 R

For claims made in connection with protected investment business, protected home finance mediation5, 10protected non-investment insurance distribution8, or protected debt management business, 10the FSCS may disregard a defence of limitation where the FSCS considers that it would be reasonable to do so.2

COMP 8.2.4A R

6For a claim which falls to be dealt with (or has properly been dealt with) under a consumer redress scheme, the FSCS must disregard a defence of limitation which became available after the scheme was made or imposed.

Dissolved companies9

COMP 8.2.5 R

For claims made in connection with protected investment business or protected non-investment insurance distribution8, protected home finance mediation or protected debt management business10if a relevant person7 (or, where applicable, a successor)7, incorporated as a company, has been dissolved with the result that its liability to the claimant has been extinguished by operation of law, the FSCS must treat the claim, for the purposes of paying compensation, as if the relevant person7or a successor, as appropriate,7 had not been dissolved.31

COMP 8.2.6 G

4 COMP 8.2.5 R means that the FSCS will be able to pay compensation in cases where:

  1. (1)

    the company was declared in default on or after 1 December 2001; and

  2. (2)

    at the time the application for compensation is made, the company has been dissolved.1

Protected investment business: claims covered by the pensions review9

COMP 8.2.7 R

4The FSCS may reject an application for compensation if:

  1. (1)

    it relates to an event or transaction which has been reviewed under the provisions of a 'deemed scheme' as defined in the Financial Services and Markets Act 2000 (Transitional Provisions) (Reviews of Pensions Business) Order 2001 (SI 2001/2512); and

  2. (2)

    as a result of the review in (1) no redress was payable, or redress was paid, in accordance with the regulatory standards for the review of such events or transactions, and the terms of any scheme order, applicable as at the date of the review.

COMP 8.2.8 G

The purpose of COMP 8.2.7 R is to allow the FSCS to reject claims relating to pensions review cases where a review was carried out in accordance with the relevant regulatory standards applicable at the time. 'Deemed schemes' are those review schemes set up before commencement (that is, 30 November 2001) but which are treated as schemes for review of past business under the Act, namely the pensions review and FSAVC review.4

COMP 8.3 Withdrawal of offer of compensation

COMP 8.3.1 R

The FSCS may withdraw any offer of compensation made to a claimant if the offer is not accepted or if it is not disputed within 90 days of the date on which the offer is made.

COMP 8.3.2 R

Where the amount of compensation offered is disputed, the FSCS may withdraw the offer but must consider exercising its powers to make a reduced or interim payment under COMP 11.2.4 R or COMP 11.2.5 R before doing so.

COMP 8.3.3 R

The FSCS may repeat any offer withdrawn under COMP 8.3.1 R or COMP 8.3.2 R.

COMP 8.3.4 R

The FSCS must withdraw any offer of compensation if it appears to the FSCS that no such offer should have been made.

COMP 8.3.5 R

The FSCS must seek to recover any compensation paid to a claimant if it appears to the FSCS that no such payment should have been made, unless the FSCS believes on reasonable grounds that it would be unreasonable to do so, or that the costs of doing so would exceed any amount that could be recovered.