Advisers won't face extra legal costs for FSCS judicial review

Issued: 08/07/2010 00:00:00

Regulatory Legal has assured IFAs that advisers making donations to help fund the judicial review of the FSCS will not face any additional legal costs

Last week, Money Marketing revealed that Regulatory Legal had been given the go-ahead to launch its judicial review against the FSCS's £80m interim levy.

A High Court judge ruled Regulatory Legal's grounds for a judicial review raise arguable points on whether the FSCS's categorisation of Keydata as an intermediary "erred in law or was otherwise flawed on public grounds".

A High Court hearing is likely this autumn if Regulatory Legal can raise the £150,000 needed to pay legal costs plus the FSCS's legal bill if it loses. The law firm says it will cover any other costs that arise and that advisers supporting the review will not be liable for any additional costs.

Regulatory Legal is looking for firms with four or fewer registered individuals to donate £200 plus VAT and firms with five or more RIs to contribute £300 plus VAT.

If RL cannot raise sufficient support by the end of August, all cheques will be returned.

Fatchett says: "It would be a tragedy if this did not go ahead due to costs. It would allow the FSCS and the FSA to avoid court scrutiny. We believe that is more unpalatable than losing at trial."

The review is being supported by SimplyBiz, Clarkson Hill, Adviser Alliance and Financial Ltd although Tenet and Sesame are both unwilling to support it.

Aifa says its efforts are better focused on trying to bring the FSA to account for Keydata failings.

Tenet group distribution and development director Keith Richards says: "It is all too easy to allow emotion to dictate action which we can ill-afford to do. We continue to support the view of Aifa and the legal opinions obtained by them."

Advisers who want to make a donation should email gareth.fatchett@regulatorylegal.co.uk or tel 01384 426400.

Source: Nicole Blackmore, Money Marketing, 8th July 2010