A judge in the High Court has dismissed claims for judicial review from three financial advisers over five Keydata decisions handed down by the Financial Ombudsman Service, which they had hoped to have stayed until after a major adviser litigation by the industry compensation scheme.
In October last year, Dumfries-based Westscott Financial Services, Essex-based CBHC and Manchester-based DTE Risk and Financial Management sought a stay of rulings to prevent enforcement.
They argued their decisions should be stayed until the result of a legal challenge by the Financial Services Compensation Scheme to recoup compensation from hundreds of advisers over the failed Keydata investment scheme was heard.
The FSCS action has been protracted and delayed itself, with out-of-court settlements bringing in more than £12m so far and a new group of 17 lead defendents - of 15o that remain - now selected to face trial.
In each case the stay was refused, the ombudsman upheld the complaint and directed the IFA to pay compensation. The claimants then each sought judicial review of the decision not to stay the determination in their case.
CBHC advised Mr and Mrs Steel in late 2005, DTE advised Mr and Mrs Dalby and Mr and Mrs Buvyer-Walker in mid 2006 and Westscott advised Mr and Mrs Ross in early 2009, with all investors buying Keydata products.
Mrs Justice Thirlwall stated that she was satisfied that the Ombudsmen understood the basis upon which the applications for stays were made.
“I can identify no error in their approach to the applications. Their reasons are clearly expressed and easily understood. There were no errors of law. In my judgment the decisions were not irrational.”
She therefore dismissed the claims for further judicial review.