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Ex-complaints commissioner hits out at FCA over closed book costs

Former complaints commissioner Sir Anthony Holland has hit out at the FCA for spending £3.8m on its closed book review inquiry, claiming the review could have been carried out for free. 

Last week, the FCA revealed it had spent a total of £3.8m on an inquiry into where it went wrong on announcing its review of closed book business, where a briefing to The Daily Telegraph sent insurers’ share prices tumbling in March.

The inquiry was carried out by Clifford Chance partner Simon Davis, whose costs totalled £2m. Other costs to the FCA included £1m for Kingsley Napley, a law firm tasked with advising senior staff at the regulator.

Holland says: “I find it difficult to understand why the FCA chose to use a law firm to carry out the review when what was needed could have been done by the complaints commissioner for free.

“The FCA has its own system for dealing with complaints, and the industry is the loser here.”

Holland was complaints commissioner for almost a decade before stepping down in April, when he was replaced by Antony Townsend. The complaints commissioner operates independently and is responsible for investigating complaints against the regulator.

FCA chairman John Griffith-Jones says it would have been “extremely difficult” for the inquiry to have been carried out any other way, given the level of public scrutiny over the blunder.

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Rubbish. £3.8m is an obscene amount of OPM to have thrown at this review. It could and should have been done for a tenth of that sum.

  2. Julian

    I think you have missed the point. Don’t you realise that the Regulator FSA, FCA and all forerunners are in fact a benevolent society for lawyers and accountants (and accountants posing as consultants)?

    After all this is often the next step for regulators and they wouldn’t want to see their future employers unable to afford their new and inflated salaries.

  3. And just how much of this are the perpetrators funding? Should they get a 30% discount from early payment?

  4. It really is a disgrace!

    Having been censured and criticised by just about every interested and involved party, not least the Chancellor, do you need a major ‘review’ into what went wrong?

    People cocked up, and having done so, should be asked to resign, which they now have, but at vast cost, which could only happen in a bloated, inefficient, unaccountable organisation, such as this regulator.

  5. The FCA has instigated reviews where consumers have lost less than that

  6. Mr Holland’s point would have been more usefully made loud and clear before the £3.8m was spent.

    £3.8m transferred to lawyers which came from where? The magic funding fairy? Oh wait a minute, doesn’t it come from the money charged against the industry who in turn have to cover it in their charges to those customers who are not yet excluded from financial services by the regulatory interventions that have cut off most avenues for the less wealthy.

    As Harry points out, a brilliant mechanism for transferring money from consumers to the professional classes. All done without having to disclose those costs to the punter who ends up paying. Or without having to get sign up to those costs from said punter. All in the name of consumer protection.

    A brilliant business model. And there was me a few days ago accusing the FCA of being naive to commercial reality.

  7. Why did it even need a review? Clearly from the outset persons had made a blunder, so why was an expensive review required? There were many people/organisations that were on the FCA’s case, it just needed an honest internal enquiry…..are got it….’honest internal enquiry’, there’s the rub!

  8. As Ruth says Sir Antony Holland has a point, but he should have said it BEFORE the money was spent, why didn’t he? If is was because he was paid by the F-pack so expressing an opinion contrary to the party line would be a breach of contract, then that is why it needed to be independant, BUT Gov’t/The Treasury should be paying for this from the fines they confiscated and not from the levy on FS firms who are the ones who are being stitched up.

  9. What did he get up to in NI?

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