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FSCS pushes for Keydata legal battle delay

The Financial Services Compensation Scheme is seeking to delay a crucial case management conference in its legal challenge against advisers to recoup Keydata compensation, Money Marketing understands.

In January Money Marketing reported the FSCS was seeking new lead case defendants as part of its bid to recoup up to £75m out of around £400m paid out in Keydata compensation.

The FSCS has written to a number of firms about becoming lead defendants after settling with several of the six lead defendants it selected last year.

A case management conference was due to take place on 21 March to discuss the selection of new lead defendants to take the case forward.

But FSCS lawyers Herbert Smith Freehills have requested the conference be delayed until May.

Beale and Company partner Damian McPhun, who is representing a number of firms in the case, says: “The FSCS is looking to push the conference back to give them more time to get their ducks in a row.”

The High Court requires lead cases to have a sufficient number of clients who were recommended both SLS and Lifemark Keydata products.

Lawyers had previously warned it would be difficult for the FSCS to select appropriate lead defendants after settling with the largest firms.

An FSCS spokeswoman says: “Due to the ongoing nature of the legal case, we are unable to comment at this time.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. It is the FSA/FCA who should be in court for incompetence over the handling SLS funds.

  2. Clever chaps at the FSCS. Force the bigger players off the case and the High Court is bound to rule a test case in viable. Job done.

  3. What a bunch of absolute tossers. If HSF had any ethics they would advise their clients to quietly drop the whole thing. But then in this instance it would seem that ethics only applies to advisers.

    How robust is the case now that one of the main guys has been fined and banned for life for not telling the truth regarding the assets of the fund. Naturally advisers are expected to have had second sight and to have realised this – even though it has taken the Regulator more than 5 years to find it out.

    Then of course there are all the other issues which are quietly being swept under the carpet. KPMG involvement (or un-involvement). Failure of Regulatory oversight. The criminal act that precipitated the whole problem. The failure of the custodians and administrators – and so on and so on.
    But then it’s easier to hit the small guy.

  4. Thanks Mr Moderator

    Isn’t my observation that perhaps the legal advisers to the FSCS out to be considering whether it would be sensible to advise their client to quietly drop the whole thing. The charges of this eminent legal firm are not exactly in the penny numbers region and we must be approaching a position where the cost effectiveness of the whole thing is now being thrown into ever more doubt.

    Is that a more acceptable diplomatic way of putting it?

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