Documents will be submitted to the High Court this week and the law firm says it has 221 adviser firms signed up to help back the judicial review if it gets the go-ahead.
After issuing initial proceedings, Regulatory Legal says it will invite the FSCS to suspend collection of the levy, which is due to be paid by the end of April.
If the FSCS rejects this, it will ask the court to make an interim order preventing the scheme from collecting the levy, a move which would be likely to be contested by the FSCS.
A High Court judge will then decide whether Regulatory Legal has an arguable case and, if it does, the firm could proceed with the judicial review.
Regulatory Legal partner Gareth Fatchett says the judicial review would look to ascertain that the FSCS misunderstood the nature of Keydata’s activities when it allocated the costs of claims against the firm to intermediaries rather than providers.
Keydata claims made up a significant amount of the recent £80m interim levy to hit investment intermediaries which also included £22m of claims related to failed structured product providers and claims against two stockbrokers.
Fatchett argues that Keydata undertook activities which were more akin to those of the fund management sub-class.
He says: “It was clear that someone needs to challenge the decision in relation to Keydata. Our view is that for once the industry needed to stand up for itself. Win or lose, it is important to show the FSCS and the FSA that they do not have carte blanche to impose whatever they want without considering the effect on IFA firms.”
The FSCS says it will contest any judicial review. A spokeswoman says: “We see no reason why firms due to pay the levy should not comply with their regulatory obligations and do so in the usual way. We have explained the reasons for our decision to the industry and will explain our decision to the court at that time.”