A recent Court of Appeal ruling allowing evidence from FSA inquiries to be used in civil lawsuits could prejudice advisers being sued, say leading financial services lawyers.
Last month, the Court of Appeal ruled that transcripts of interviews given by staff at Aberdeen Asset Management and UBS to the FSA should be made available to a property investment fund suing the firms over their role in setting up a split-cap investment trust.
CMS Cameron McKenna partner Simon Morris says the ruling could have serious ramifications for advisers, with third parties suing them being handed “a silver tray of ammunition”.
He says up now it was assumed that evidence, including interview transcripts, gathered as part of an FSA investigation was confidential until a settlement or tribunal, or remained confidential if the case was dropped.
Morris says transcripts could have been gathered in hostile conditions or through a very narrow type of investigation, with no right of reply, and could be damaging if used against an adviser in court.
Fishburns solicitor Harriet Quiney believes interview transcripts are not balanced information, may take a particular narrow line of inquiry, and could paint an unfair picture of a firm.
She says: “This evidence could muddy the waters in a civil case as it may be based on a narrow line of questioning obtained through challenging questioning to an adviser who is compelled to answer. I would hope that a judge would put such evidence into its proper context.”