So has Legal & General given the FSA a bloody nose? Or is an angry all-powerful FSA riled beyond belief about to take revenge, knocking out whoever challenges it next?The lawyers are for once in agreement. The appeal tribunal decided that this particular contest was a draw on points. L&G was vindicated in terms of reversing an FSA decision to some degree but it still missold, according to the tribunal – a partial victory or a partial loss?The FSA did not prove that the misselling was widespread and, as a result, it almost inevitably had to reconsider its processes and just what constitutes misselling.But in many ways, this contest was historical. The main events – the sales and investigation – took place some time ago. When it was poring through L&G’s records, the FSA was in its youth while the actual sales took place under the remit of the PIA. Its processes have since become more established and its methods more targeted. Admittedly, the first regulatory decision to be contested publicly showed the FSA to be vulnerable to accusations that it comes to the conclusion that many firms are guilty until proven innocent. But what now? Well the City pages will be replete with comments that now one institution has taken on the regulator, others can follow suit. David Prosser the determined chief executive of Legal & General, has once again proved his mettle, showing that he has the nerve to take on one of the most powerful organisations in the country. Clearly, he should be satisfied that he has been proved right at the very least in his belief that the way the FSA conducted itself, complete with fine and naming and shaming, was unfair to the company, given the standard of evidence. Of course, in working out the points’ total for L&G and the FSA, much still rests on how much the fine is revised. Knock off the odd 100,000, halved or reduced to a libel-appeal-style 1. But perhaps that is relatively unimportant in the long term. The immediate impact may be that other organisations which are undergoing investigations from the FSA or -as this judgment looks back in time have undergone investigation – will be emboldened to take on the FSA. There may be more challenges. But it is also likely that the FSA, as soon as it realised what way the wind was blowing – and judging by John Tiner’s statement about the case’s relative unimportance, he realised months ago – tightened its processes. It may be that some “partial victories” may be waiting in the wings. Some independently wealthy IFA – currently barred from doing business or caught in some bizarre tug of war between ombudsman and FSA – could be consulting lawyers. But it feels that the impact for many IFAs could be slightly more disheartening. The FSA’s most significant comment was that it would step up its regulatory interventions. Where it thinks that evidence is not forthcoming it will use all its formidable investigatory powers to get it, it says. This line was not dreamed up by a junior in the press office but must have been agreed by John Tiner with the experienced chairman Callum McCarthy chipping in using all his experience of fights in the energy sector. No doubt, a few subtle calls were made to the Treasury too. Big firms may be able now to take issue with the result. The whole FSA and ombudsman system may breach many aspects of European humans rights legislation and, for that matter, English common law, with half the clauses put in at the last minute by a minister miles out of her depth, Melanie Johnson. But for IFAs on the ground, it may be a case of, so what? It fuels the odd pub discussion about injustice. But in reality, the fear is that all but the richest IFAs do not have a realistic hope of challenging the regulator. This may be two-tiered regulation where the haves have big City lawyers while the IFAs and the rest have not. And from what it says, it looks like the regulator will be coming down harder still. There was once a regulatory myth that a price-capped pension combined with a decision-tree system could send sales of pensions soaring. The real impact of this decision, particularly for IFAs, is that the myth of lighter-touch regulation may have gone out the window too.