Professor Philip Lane:

The compensation process works within a framework. Compensation is proportionate and we would expect higher rates for the more severe scenarios. The back-up is that one can appeal the level of compensation within the framework. The circumstances of every individual are different. The lender is supposed to take into account the circumstances of the individual when making the initial offer. If, however, the initial offer is not enough, then the independent appeals process provides a mechanism to challenge it. If the outcome of the independent appeals process is not to the satisfaction of the customer, then the ombudsman stands ready to take his case. Finally, there are the courts. In cases where the losses have been really severe, I would expect that these other mechanisms to kick in when the initial offer of the bank is not enough. I will ask my colleague Ms Rowland to elaborate.