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FSCS takes firms to court over claims pay-outs

FSCS takes firms to court over claims pay-outs

The Financial Services Compensation Scheme has begun legal action against failed advice firms Clarkson Hill and Bates Investment Services in a bid to to recoup funds it paid out as a result of claims against them.

Clarkson Hill is in liquidation and began winding up in 2011, after having gone into administration a year earlier.

The advice firm had been hit with operating losses before exceptional costs of £104,999 attributed to “reorganisation and additional regulatory requirements placed on the group”.

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It incurred £129,320 of costs from redundancies and the renegotiation of office contracts and £230,787 in order to meet the requirements of the Financial Services Authority to review and then revise the group’s processes and procedures.

The assets of the once-listed company were eventually sold to Merchant House Financial Services.

The dissolution of Clarkson Hill was deferred by six months in late August to allow the FSCS to take legal action which, once commenced, would postpone the firm’s dissolution indefinitely until it is concluded.

Bates Investment Services is also in liquidation, after having gone into administration in 2009. In 2010, it was declared in default by the FSCS.

A spokesman for the FSCS said: “The FSCS pursues recoveries when it is cost effective to do so.

“We have started proceedings against these firms, but cannot comment further or speculate on the outcome of this or any other possible future recoveries actions.”