The fight for a time limit on claims against financial services firms is being taken to Europe and could end up in the high court if the FCA does not agree to a long-stop, Alan Lakey has claimed.
Mr Lakey, senior partner for Hertfordshire-based Highclere Financial Services and part of the long-stop working group for the Association of Professional Financial Advisers, said he has been given “clear legal advice” that the European Union’s Alternative Dispute Resolution Directive does not prevent the UK regulator from implementing a long-stop.
Apfa and its partners are set to meet with the FCA soon to push the regulator to clear up the issue and, if the FCA refuses, the issue could be taken to a judicial review, he said.
“I don’t think the directive prevents a long-stop and I have spoken to a number of barristers who agree with that,” he added.
“The problem with a judicial review is the bills can run up and the loser generally pays them.
“I believe this is an issue the majority of the industry feels strongly about and if we were to request that the industry donates money towards this case I imagine we could get a sizeable amount.”
In June an industry-led campaign calling for a long-stop was formed, led by network Tenet, provider Zurich and Apfa.
Having initially stated it intended to review the case for a 15-year long-stop for financial services, the FCA admitted in July it had put this on hold due to the looming implementation of the EU’s consumer directive, which aims to allow consumers and traders to solve their disputes without going to court.
However, Apfa does not believe that the directive, which is due to be implemented by summer of next year, would prevent the reinstatement of a long-stop, and is calling on the FCA to decide whether the EU directive does preclude the UK from bringing in a limit to the liability on financial advice.
A spokesman for the FCA said: “We said we would consider the case for a long-stop in our business plan. At the moment we are working through the process.”
She said she did not know when a decision would be made, adding that the FCA does not have a meeting with Apfa scheduled for November.
Adviser view
Adam Bell, a partner at Hertfordshire-based BpH Wealth Management, said: “IFAs are being denied due legal process by which everyone else is covered.
“The big problem is that 25 years down the line someone might decide to make a complaint. We know from our experience that what clients say happened is not always the case because we have always been good at keeping our paperwork.”
