Lighthouse has agreed a settlement discount of up to 85 per cent with the Financial Services Compensation Scheme over claims against Lighthouse advisers that recommended Keydata, Money Marketing understands.
Lighthouse advisers received letters from the company last week saying that following “prolonged negotiations” between Lighthouse and the FSCS, “a full and final settlement” of potential Keydata Lifemark and SLS claims has now been finalised.
The letter says the agreement represents “a significantly lower percentage of the total gross exposure” than has been negotiated with the FSCS in other Keydata cases.
Lighthouse has now billed advisers for the outstanding liability.
Law firm Beale and Company partner Damian McPhun says: “We are acting for a number of former network members who strongly want to defend the claims, and they are concerned networks may just settle, albeit at a discount, and then seek reimbursement from them. There is potential scope for further disputes between networks and their appointed representatives on this further down the line.”
Facts & Figures Financial Planners managing director Simon Webster says: “The fact the FSCS is now prepared to settle for as little as 15p in the pound would seem to indicate it recognises the relative strength or otherwise of its case.”
Lighthouse and the FSCS declined to comment.
Money Marketing reported in August that a PI insurer had secured a 60 per cent settlement discount with the FSCS, while AWD confirmed the FSCS “substantially reduced” its liabilities in July.