Four claim management companies have joined forces for a High Court challenge on the legality of time-barring for endowment compensation claims.
BrunelFranklin.com, CPH Financial Services, Portal Claims and Whitehall Randall are seeking a judicial review of the time-bar rules which they believe could open the door for over one million barred claims to be heard.
Most endowment claims are likely to be time-barred in the next couple of years.
The consortium will have to prove there is a case to be answered by the Financial Ombudsman Service and/or the FSA before getting the go-ahead for a judicial review.
At the same time, law firm SP Legal is seeking a judicial review on behalf of advisers claiming that the 15-year long-stop rule and regulatory record-keeping standards of the time should always apply in considering claims.
SP Legal solicitor Gareth Fatchett says over 250 adviser firms have contacted him after Money Marketing revealed his plans in May, stating they are in similar situations and are willing to become interested parties. Fatchett says: “These claim companies are more interested in themselves and maintaining the ability to line their own pockets rather than helping consumers. Our challenge is taking on the fundamental unfairness in the system that prejudices against advisers.”
FOS spokeswoman Emma Parker says: “The rules on time bars have been the subject of a number of legal challenges from both sides of the fence. It will be up to the courts to decide whether there are any merits in these particular cases.”