Regulatory Legal’s IFA steering group for Arch Cru investors has authorised a judicial review claim to be launched against the Financial Services Authority (FSA).
According to a spokesperson for the steering group, the Financial Services Authority has agreed to “some form” of cost capping for the judicial review.
The spokesperson claimed this would be 75 per cent of the original estimate, which was over £250,000.
Joe Egerton, campaigns director for Justice for Financial Services, said that the move to cap costs would be “no skin off the FSA’s nose”.
He referenced costs brought by the legal challenge by Heather Moor & Edgecomb over the Financial Ombudsman Service’s failure to hold an oral hearing.
Mr Egerton said: “The costs that were claimed from HME by Fos for leading and junior counsel in the two-day case were under £50,000 and FSA used Charles Flint QC. In the Fleurose case, where FSA used Richard Gordon for a one day appeal hearing, the costs were under £40,000.”
He added that in the Arch Cru case the FSA is the defendant, which means that Capita, HSBC, BNY Mellon and the Financial Ombudsman Service (Fos) are interested parties.
This in turn means that all three are affected and can make representations as well as asking for costs if the judicial review fails.
He also warned that there was no reference at all to cost cap with Capita, which is “more worrying” as Capita is using Herbert Smith, “unlike the FSA that uses in-house solicitors”.
Mr Egerton said: “Capita and HSBC may both claim over £250,000 if the judicial review fails.
“However, clearly the steering group’s decision has been taken and a judicial review will be launched by Regulatory Legal.”
Capita declined to comment on the costs, claiming that to do so would be “hypothesising”.