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Apfa orders FSCS to help Keydata defendants

Apfa orders FSCS to help Keydata defendants

The Financial Services Compensation Service must help those defendants who face outstanding claims in respect to sales of Keydata products, director general Chris Hannant has said

He called on the FSCS to reach a broad settlement with the remaining defendants, saying: “The FSCS has been struggling to identify lead cases, even with the threshold of claims lowered to £100,000. The FSCS should make every effort to contact the outstanding litigants and attempt to broker a settlement.”

He said that the FSCS was at the stage where the larger defendants had already reached settlements, leaving only smaller firms as part of the case, which has been running since November 2011.

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Keydata was placed into administration in June 2009. In November of that year the FSCS confirmed that the former investment service firm was ”in default”, and that investors with eligible claims against the firm could claim compensation from the FSCS.

The scheme has settled with the majority of firms, and recovered more than £100m.

Mr Hannant said: “Many of these firms do not generate the turnover or the profits needed to carry the cost of a court case and the claims raised against them.”

To date, 15 firms have been identified as lead defendants from the 63 remaining firms who have not yet reached a settlement with the FSCS.

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A spokesman for the FSCS said: “We only pursue recoveries where it is reasonably possible and cost-effective to do so. Our latest position regarding our recoveries, which includes Keydata, will be outlined in our plan and budget which will be published in the next few days.”