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Lighthouse secures Keydata settlement discount of up to 85%

FSCS Interior 480

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.

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. I don’t have a clue what that means. Can any one elucidate?

  2. Well done Lighthouse, but the discount should be 100%! This whole situation is a disgrace, perpetuated by the FSA to cover their own shortcomings.

  3. 15p in the £?

    That’s a long way to go to the £75m they predicted they’d recover yesterday in the FSCS report….

    Still every 15p is 15p recovered for the fund manager funding class and if it costs £1 in legal fees, well that’s picked up by the investment intermediation class in our levy. Commercial logic.

  4. RegulatorSaurusRex 7th February 2013 at 9:38 am

    Nobody should settle until one particular case gets to court.

  5. Re- RegulatorSaurusRes comments

    I concur, let them take a case against a firm to court and win first before anyone is tempted to settle, no doubt the networks PI insurer will pick up most of the bill and the rest from all their IFAs.

  6. The agreement with FSCS gags firms from quoting what the settlement figure is.However any firm who is a limited company will of course have to explain WHAT the settlement amount was in their annual accounts (public document) which can then be compared as a percentage against public comments by the said firm as to what Herbert Smith were pursuing for.
    I suspect when the accounts are produced, the S**T will really hit the fan as it will then be clear just how costly this stupid pursuit has been compared to the actual recoveries.
    I look forward to the production of our annual accounts (accounting period ends 31st March) and expect a call from Natalie will follow a few days later so I can say “no comment, other than read our accounts”

  7. Wow Herbert must have built a really strong case – not!

  8. National audit office 9th February 2013 at 9:30 pm

    If they are getting 15p in the £, most companies will write this off against profit at about 40%, so less money to HMRC so thats about 9p in the £ being recovered by the government, but its all different deparments budgets so who cares. Tax payer looses out. Solicitors and FSCS and FSC make it look like they are doing a great job at further expence to US. Which again these costs come off against what little profit we make so again less profit to HMRC…. still with me…… Surely the National Audit office should investigate what a waste and time this all is.

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