The article last week headlined, Misleading claims won big payouts, was not the big story since every IFA in my experience has been only too painfully aware of it for years.
On the other hand, what was gut-wrenching was the sentence by Lord David Lipsey, who said that, in his experience, some of those compensated “knew it was in their interest to forget what had happened to them”.
He said this problem increased over time as more people got payouts and advised others on the correct thing to say to ensure they were compensated despite not having a valid case.
I urge Money Marketing to use its own considerable expertise to investigate under the Freedom of Information Act exactly when and how Lord Lipsey, as a PIA director and member of the regulator’s pension review committee (which monitored the review and advised the FSA on the issue when it formed) and his regulatory colleagues learned that advisers have wrongly paid out millions of pounds in fraudulently claimed compensation as a result of the review he was running.
Lord Lipsey’s statement may imply that not only have IFAs been subject to a reversal of the usual law of innocent until proven guilty but may confirm that the regulator was aware at the time that it was forcing IFAs (and in fact the whole industry) to pay out on a high proportion of fraudulent claims because the normal rules of evidence and reasonable doubt were specifically suspended to facilitate this travesty of justice.
If this is the case, would it not be reasonable for professional indemnity insurers and IFAs to reclaim a substantial amount from the regulator for these far from insignificant amounts?