Lawrence Graham is dispute resolver for Internet bank

City firm Lawrence Graham has been asked to act as a makeshift ombudsman for an Internet bank - First-e - which the UK Banking Ombudsman Scheme (BOS) refuses to recognise.The BOS's rules pre-date the Internet age; it will not allow First-e to join the scheme - which adjudicates disputes in the banking sector -- because BOS insists that members of the scheme must have a physical branch presence in the UK.Banks that are not members of BOS are deemed to be breaking the Banking Code.First-e has therefore appointed Lawrence Graham as dispute resolvers, and the firm will act as a surrogate ombudsman while First-e continues to be frozen out of the banking community.The service will be headed by independent adjudicator Tony Willis, an arbitrator and former partner of City giant Clifford Chance.

Like an ombudsman, Lawrence Graham's service will be capable of making awards of up to 250,0000 which will be binding on First-e, but not on the customer.Nicholas Pike, a partner at Lawrence Graham, said: 'We're operating this service for First-e, but we could extend this to other banks if they come across the same problems.'

Jeremy Fleming