Law firm Reynolds Porter Chamberlain says time bars on endowment misselling claims are necessary to balance the rights of companies and consumers.
The Consumers' Association recently launched an attack on financial firms and the FSA for allowing claims for compensation to be time-barred 15 years after the alleged misselling.
But speaking at RPC's annual financial services seminar in London last week, solicitor Mark Sutton said firms should be entitled to protection such as that provided by the statute of limitations. He said it was ineq- uitable to expect companies to defend against claims launched against them long after all records have been destroyed and the people involved may have retired.
Sutton's comments follow FSA chairman Callum McCarthy revealing that 13 out of 20 product providers have pledged to use the time bar. He told the Treasury select committee last week that few IFAs have waived their right.
Sutton said he believed that time bars may be protected under article 6 of the European Convention on Human Rights, which states that everyone is entitled to a fair and public hearing within a reasonable period of time.
Sutton said: “A time bar is needed and companies should not be attacked for using this legitimate defence.
“It is just inequitable to expect companies to defend against claims launched against them long after all records have been destroyed, the original staff retired and the entire incident has passed beyond human recall.”