The recent Appeal Court ruling in the Clark & Clark versus In Focus case has been dressed up by some as a bit of a victory for financial advisers.
And I can see why a glass of claret may have been raised in celebration.
In essence the Appeal Court appears to have made it more difficult for a vexatious litigant to go for two bites of the compensation cherry by accepting a Financial Ombudsman award and then asking for more at the courts.
Clark & Clark argued that inappropriate advice from In Focus Asset Management & Tax Solutions had caused losses of more than £500,000.
They accepted the statutory maximum £100,000 that the ombudsman could award, but added a handwritten rider reserving the right to pursue the matter in the civil courts.
The case has bounced up through courts, with In Focus finally winning.
But is this really a good thing for the industry and consumers?
It may quell fears about open-ended liabilities, but the real victor is the legal profession.
Any consumer who has a big claim against an adviser may no longer feel able to use the ombudsman.
So both they and the financial adviser will have to go through the courts from the start.
It has been suggested consumers could split claims into smaller components – again, this won’t help either advisers or their clients. But lawyers could gain.
I have seen it argued that this will be a bash on the nose to the claims management industry, which may have tried to persuade people to use ombudsman awards to pursue larger claims.
I do not think that washes. These are extremely rare cases.
Anyone with the nous and the money to pursue a large claim is not going to be taken in by claims managers whose province tends to be the lower-earning and less well-educated.
And this does not close the door where issues have not been considered by the ombudsman.
So the only losers will be those who have very large claims and will be wary of using the ombudsman for fear that even if they win they will only be cutting their losses while the firm responsible will get away with cut-price compensation.
That may make you feel happier about the state of your industry but it leaves me feeling distinctly uneasy.
It is time to rebuild trust
Mark Polson, principal of consultancy Lang Cat, hit the nail on the head when he said if the industry wants to solve the pensions gap it must first focus on the trust gap.
Trust should be the foundation of any relationship between the consumer and a financial firm.
Instead of concentrating on rebuilding it, too much effort has been expended in some quarters on futile attempts to defend the indefensible and maintain the status quo.