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FSA loses human rights defence in bid to stop “Lautro 12” disclosure

The FSA has lost part of its appeal against an Information Commissioner’s ruling that it must disclose the names of the 12 or more life offices involved in the “Lautro 12” dispute.

Among other things the Information Tribunal has rejected an attempt by the FSA to argue that the disclosure of the information was protected under Human Rights legislation. The FSA was resisting a bid to obtain the information by the IFA Defence Union chief Evan Owen.

IFADU believes that the the FSA must now either disclose the names, which could now number nineteen or more, and accompanying information or, it is thought, appeal to the High Court on a point of law.

The regulator is arguing that this is a preliminary judgment and several more of its arguments are yet to be considered before it has to disclose the information.

A spokesman for the FSA says: “The tribunal is now going to consider several other arguments that the FSA has put forward.

“It is not the case that the FSA has been required to disclose any information at this stage.”

The IFA Defence Union says it wants to establish whether, once it has the information, it can bring a case against the regulator and the firms concerned to establish whether IFAs can get compensation, paid out over endowments, returned to them.

IFADU’s Evan Owen is asking IFAs to send £100 to a fighting fund for this purpose.

Owen says: “This is not a victory. It is sad that it has taken so long to get this decision. It is wrong that IFAs have paid out directly and through the FSCS.”

On the FSA human rights appeal, the Tribunal says: “The Tribunal therefore entirely endorses the approach taken in the Decision Notice in Appeal 93 to the effect that nothing in the disclosure of the information requested or with regard to any informal settlement arrangement was in any sense dispositive of any human rights or other analogous rights. Moreover the Tribunal has already found in Bluck v Information Commissioner (EA/2006/0090) that Article 8 does not constitute or reflect any form of prohibition for the purposes of section 44 of FOIA. If such were to constitute an erroneous conclusion this Tribunal would find any Article 8 infringement in Appeal 93 duly proportionate and justified.”

Another part of the long legal ruling by the Information Tribunal says: “Yet another contention made by the FSA refuted a suggestion made by the Commissioner that it, ie the FSA, was now relying on information having been provided under some form of agreement with the firms. Insofar as it needs to address this issue, the Tribunal would agree with the Commissioner that insofar as there was any form of agreement between the FSA and the firms or any firm the same information cannot in any way be said to have been at any stage “received” by the FSA. See eg Derry City Council v Information Commissioner (EA/2006/0014) at paragraph 32(c) to the effect that a party to an agreement cannot “obtain” information contained in that agreement.”

From the late 80s, Lautro (the regulator at the time) required life companies to adopt a standard set of charging assumptions to use when producing illustrations. Although growth rates were allowed to increase the charging assumptions did not, and over time their assumptions did not properly reflect the actual charges being used.

As the charges being used were often higher than those in the illustrations, the predictions of maturity values for the funds affected were inaccurate and led to shortfalls at maturity and a large number of misselling claims, particularly for mortgage endowment policies.

IFADU has appealed to the Information Commissioner in order to force the FSA to reveal the names of all the insurance companies who were using the Lautro charging structure in their illustrations at the time in order that it can assess whether a claim can be made against these insurance companies for the money that IFAs had to pay out in misselling claims against them.


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