Being described as an “ambulance-chaser” by FSA managing director John Tiner and dismissed as “not a class act” by Tory MP David Ruffley means it has been rather a good week for Class Law partner Stephan Alexander, the solicitor representing investors in the split-cap crisis.
It was Alexander's appearance before the Treasury select committee – which is looking into split caps – alongside Tiner last week which prompted the attacks.
“It probably means that I said things which they found uncomfortable to hear, that I touched a raw nerve,” says Alexander, with evident relish. “Tiner's remark was ill considered – is he suggesting that solicitors should not act for clients? Why not deal with the issues rather than invective?”
On the question of Guernsey's communication with the FSA last year about the inherent riskiness of split-caps, Alexander is confident in the robustness of the documentation he has.
He says: “The FSA has either been incompetent or reckless – it has a lot of explaining to do.” He strongly believes the FSA cannot be a judge in its own cause – which has been a basic principle of law since the Romans.
He thinks the answer is for a division of powers, for a separate independent body to investigate regulatory failure. He is pursuing a separate case, challenging the FSA's immunity from prosecution under EU law.
But it is not only the regulator and investment companies that he has in his sights – IFAs are on the radar too. According to Alexander, there are three kinds of IFA that are caught up in the split-cap case – although he quickly adds that he is far from being anti-IFA, acting for IFAs on issues such as commission and polarisation.
First are those IFAs who told clients they did not know enough about zeros to advise on them and referred people on to other brokers. These, he says, have nothing to worry about. Indeed, some of them are helping him in getting redress for their clients.
Then there are those IFAs who advised clients that zeros were low risk and say they relied on marketing literature. He describes this as negligent, saying advisers had a duty to read the underlying documentation relating to each specific product rather than rely on a generic classification of zeros as low risk.
Third are the big firms which were involved in the investment trusts themselves, as well as having IFA arms through which they sold the products.
Alexander claims that some IFAs have settled with clients rather than get into litigation. However, the big, well known investment IFAs – on which he will shortly be serving writs – are busy instructing lawyers and corresponding with Class Law.
While in his office he takes a call from his wife and gives her instructions on how to get to Greenwich…New York, where she is taking a break from their North London home. Of their three children, one is a doctor, another is about to become a doctor and one is still at school.
H e had a traditional upbringing in North London. His father “worked in timber” and Alexander went to Kilburn Grammar School. He did not go to university and instead studied law the slow way – while working.
After doing his articles, Alexander says he has always had his own firms and always in London's West End, which he loves and contrasts to the “alien land” of the City of London. He says he likes noise – his windows look over one of London's busiest intersections and on to the green expanse of Hyde Park.
To complement the buzz of traffic, he has bought a stereo. On entering the office the soft strain of ambient, trance music can be heard. He also has a practice golf club as another source of relaxation. Despite a clear exuberant enjoyment of life evident from his brightly coloured office, Alexander becomes coy when asked what car he owns. However, when he is told that Tiner drives a Porsche, Alexander spills the beans – he has a Ferrari, quickly adding that is it not a new one.
He set up Class Law in 1998 with Howard Epstein and they cut their teeth on Royal & Sun Alliance, acting for a client who opposed the merger of with-profits funds. They were successful and R&SA climbed down.
Class Law has since taken on a caseload of household names, including Railtrack, British Biotech, Equitable Life,Claims Direct, Sotheby's and Christie's.
He says the Equitable case is proceeding satisfactorily. Working together with solicitors Irwin Mitchell, an agreement has been reached with Lovells – Equitable's solicitors – that should allow for an expensive court hearing to be avoided.
The ailing life company has now admitted it will pay out on misselling and the parties are close to setting up a mechanism to decide individual cases.
Alexander says he turns away at least 10 cases a week, for example, people who have lost money as a result of the implosion of Marconi. He asks: “Who can you sue – and for what?It is important not to bring silly cases.”
Alexander describes himself as a keen believer in capitalism and the system, saying: “The problem is confidence is being shattered and this is not good for investors, for IFAs and for the stockmarkets. Don't try and sweep things under the carpet.”
Born: August 1952
Education and qualifications: Kilburn Grammar School, then law the slow way at the College of Law
Career to date:Variety of his own law firms in the West End – formed Class Law in partnership with Howard Epstein in 1998
Career ambition: To become a professional golfer – my big regret is that I gave up tennis when I was 14 and never found out how good I could have been
Life ambition: To live life to the full every day
Likes: Golf, travel, teaching people things
Dislikes: Stupidity and slowness, bureaucracy, pomposity
Peers say: “To try and make his business model work in the UK is very hard – I wish him luck.”
Car: Ferrari 348