High Court rejects first Arch cru judicial review bid

3 January 2012 9:01 am | By Chris Salih

The High Court has rejected a bid by campaigning group Justice for Financial Services for a judicial review of the FSA’s Arch cru compensation package.

The group, which is headed by Joe Egerton, will now request an oral hearing at the Royal Courts of Justice, according to the Mail on Sunday.

Egerton initially submitted the bid last September. The move came after the FSA announced that Capita Financial Managers, BNY Mellon Trust & Depository Ltd and HSBC Bank had agreed to contribute to a £54m fund, which will be used to make payments to the eligible investors in the CF Arch cru funds. It aims to give investors around 70 per cent of their investment back, when set alongside distributions already made and remaining assets.

The package also prevents investors making further claims against the firms through the Financial Ombudsman Service.

Speaking to the Mail on Sunday, Egerton said: “At least one third of all applications for a judicial review that are initially refused are granted on appeal. The FSA has a statutory duty to protect consumers and to maintain market confidence.

“It was not set up to protect big firms like Capita from the consequences of their failure to carry out their duties properly. By sacrificing the interests of investors for the benefit of Capita, the FSA is damaging confidence and betraying consumers.”

As many as 20,000 investors were left facing huge losses after the £400m Arch cru fund range was suspended due to liquidity issues in March 2009.

Law firm Regulatory Legal is also seeking to launch a judicial review of the FSA’s compensation package for Arch cru investors on behalf of 2,700 investors.

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