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.