Long-stop appeal is rejected
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The Information Tribunal has dismissed an appeal challenging the FSA’s refusal to disclose the legal advice it received against allowing IFAs to have a 15-year long stop.
The FSA took legal advice from its general counsel in 2003 which found the Financial Services and Markets Act suggests that Parliament intended the FSA to be able to set time limits which can differ from those in the Limitation Act which offer a 15-year long stop.
MLP director Paolo Standerwick lodged a Freedom of Information request in March 2008 to see the advice.
The FSA refused, saying it was covered by legal professional privilege and was exempt under the FSMA and would not be of significant public interest to overturn the exemption.
Standerwick complained to the Information Commissioner and in February this year the commissioner upheld the FSA’s decision. Standerwick then appealed to the Information Tribunal.
The tribunal has now dismissed the appeal, saying the public interest in maintaining the exemption outweighs the public interest in disclosure of the legal advice.
Adviser Alliance, which has been helping Standerwick, says the findings are still being considered and no decision has been made about an appeal.
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Readers' comments (8)
Anonymous | 5 Aug 2010 9:38 am
Whenever organisations are determined to keep information a secret, you can be sure something is not quite right. Otherwise why all the secrecy?
The FSA definitely has something to hide.
Surely, if the FSA is allowed to act outside of the law we have a right to know the grounds for doing so.
Otherwise we live in what amounts to a police state or a banana republic, where the law becomes what the dictator says it is.
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Julian Stevens | 5 Aug 2010 10:29 am
But on its website, the FSA claims to be "an open and transparent regulator". How does its rejection of this FOI request square with that? In all probability, no legal advice was even sought, let alone taken.
Evidently, there's no more truth to this claim than the FSA's claim to be entirely independent of government.
Yet still we have to pay, pay, pay.
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Anonymous | 5 Aug 2010 10:33 am
So the next time the FSA want some information from an IFA ,we can refuse to give the information , saying it is covered by legal professional privilege and and would not be of significant public interest.
That would go down well.
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Mike Fenwick | 5 Aug 2010 11:49 am
I often read comments about what are considered to be the failings of the FSA, but for me perhaps the issues surrounding the lack of a long stop must rank near the top of that league of regulatory failings.
The FSA have been given extensive legal powers, have recruited large numbers of highly paid staff, it has in many ways an unlimited budget ... and yet, and yet.
And yet, despite all of that - and more - when it comes to their ability to recognise failings in the markets which they regulate, it is not 3 years that they need, nor is it 6 years, nor is it 15 years.
Do the abilities of the FSA run so low that they must determinedly stick to their assertion that they need - forever?
Does it reveal an important lesson?
I would suggest it does - and I wonder if that apparent failure, the need to take forever to perform a regulatory function, to take forever to ascertain failings in the market, could in any way be described as being in the public interest.
Not convinced?
Then perhaps ask yourself if ... whilst denying the regulated a legitimate claim to the legal rights granted to others - why the FSA were given a unique exemption from the rule of law for their own failings?
You sure that is truly in the public's interest?
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Evan Owen | 5 Aug 2010 12:29 pm
Spot on Mike, what bothers me is that regulators, many who are are supposed to be Christians can sleep at night knowing that what they do to sole traders is unfair, immoral and unjust. Or is it that they don't know? That they haven't sought legal advice of their own? Is it because they are 'immune from prosecution'? Are they indeed immune? They should ask their legal advisers.
Paolo's attempt almost failed at the first hurdle, I pointed Derek Bull in the right direction, long before Adviser Alliance was invented.
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cortesin | 5 Aug 2010 2:08 pm
There are some occasions in life that words can fail you about something that is just plain wrong and rotten.
This is one of those occasions.
Anon has got it in one- Whenever organisations are determined to keep information a secret, you can be sure something is not quite right.
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Neil F Liversidge | 5 Aug 2010 3:08 pm
It just amazes me that the people who head up these organisations are so hard-faced. If you were making strenuous efforts to cover up something like this wouldn't you just feel ashamed? How so you occupy such a position of public trust whilst at the same time behaving like the dodgiest kind of crook pleading the fifth?
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B. A former IFA - but still hounded by the F-Pack | 7 Aug 2010 11:20 am
It seems to me you cover that that which stinks and are open and honest about that which is fair, reasonable and considered.
The FSA is a private limited company (set up by statute legislation) and yet has more powers than the public courts to be able to circumvent the STATUTORY legal right of a defence in professional negligence claims that are made 15 years or more after the date of the original advice.
What staggers me is why there are any advisers left wanting to advise the public, given the retrospective nature of FS regulation in the UK now... provided of course you are not a bank, because then you can virtually bring the world economy to it's knees and be "bailed out" rather than "fined and thrown out".
Question about that - to whom do those who HAVE lost money claim compensation, or is it a case of leave the big guys alone and hound the little guy to death over claims that have not yet occurred and may never do so, like FOS over wp endowments yet to reach maturity ?
Back on the Longstop - when will the small guy - the IFA who honestly acts in the best interests of their clients (why else be an IFA when there are easier routes to more money and less pain at the cost to the consumer ?) be found to have been discriminated against ?
It's NOT an issue of trying to hide from bad advice - it's an issue of avoiding very time consuming FOS costs (win or lose) based upon a VERY biased F-pack set of blinkered and retrospective fairness goggles through which cases are now viewed. Anyone else found the FOS are trying to do a U turn on what they previously found was "good advice" ?
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