RegulationNov 26 2014

HM Treasury: FCA immunity is sacrosanct

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HM Treasury has defended the FCA’s immunity from being sued, which a spokesman said is in the public interest.

A spokesman for HM Treasury said: “The government created the FCA and gave it strong powers to ensure customers of financial services are treated fairly and abuse is tackled wherever it occurs.

“Like several regulators, the FCA has statutory immunity to ensure it can carry out its work effectively.”

He went on to say that other regulators such as The Pensions Regulator and the Land Registry have similar immunity.

Under the Financial Services Act 2012, the FCA cannot be sued for libel or damages unless it can be shown it has acted “in bad faith” or unlawfully, according to the Treasury spokesman’s reading of the Human Rights Act 1998.

The City watchdog’s statutory immunity came into question last week after a Herefordshire man, Alistair Hinton, and his wife, Terry, claimed they were forced to sell their Bath-based financial advice company after being allegedly libelled by the FCA.

The couple had been named by the former FSA as directors of Berkeley Independent Advisers Ltd, based in Coventry, which was declared in default by the Financial Services Compensation Scheme in 2006 after going into administration in March that year.

But they have never worked for the firm and have given up their bid for justice after unsuccessfully attempting to sue the FCA.

The FCA admits the information was misleading, unclear and unfair but says it was “factually and legally correct”, which the Hintons dispute.

Legal view

Gareth Fatchett, of Birmingham-based Regulatory Legal solicitors, said: “The FCA has got to have some protection otherwise it could not investigate freely.

“There are going to be a number of cases where it gets it wrong because they are only human, but investigating authorities have got to have some protection.”