The City watchdog has been told it must ramp up efforts to take action against rogue advisers and get justice for steelworkers as time is running out for people to bring claims.
At a press conference yesterday (January 21), which raised ongoing concerns about the regulator’s response to the British Steel crisis, MP Stephen Kinnock pushed for urgent action and warned time was running out for certain groups of steelworkers.
He said: “The current system is failing and the FCA needs to change gear. No more warm words please, we need action. The clock is ticking and we need action now because once the statute of limitation runs out then there is nothing more that can be done.”
Limitation periods start from the 'date of accrual of the cause of action'- the first time it was possible to lodge a claim - and last for six years.
Also appearing at the conference, Philippa Hann, partner at Clarke Willmott, who handles legal cases for steelworkers, warned many were fast approaching the six year anniversary of when they transferred out of the scheme.
She said action could not be taken in “one year or even two year’s time” but steps must be taken right now.
Ms Hann estimates that around 2,000 to 3,000 steelworkers will be caught out by the statute of limitation rules.
She said: “We believe from the information and the 700 clients we have that most of those steelworkers transferred in mid to late 2017 so that time period is ticking away.”
According to Ms Hann, 7,700 people transferred out but it is estimated that 6,000 were badly advised and should be seeking compensation.
But she said only about 10 per cent were actually taking action at the moment.
Ms Hann said: “While we know the FCA has a lot to deal with, time has become of the essence.
“We are grateful to the FCA for writing to each and every single one of those steelworkers and we know that did spark some action on behalf of the steelworkers but there is far more to be done to ensure justice is served.”
In a letter to Nikhil Rathi, chief executive of the FCA, published yesterday (January 21), Mr Kinnock along with fellow MP Nick Smith raised concerns that the regulator in its current form is not fit for purpose and called on it to ensure that consumers are better protected.
The MPs urged the FCA to set up a dedicated consumer arm or taskforce which is able to deal with consumer issues as they arise.
In terms of the BSPS debacle they asked for s166 reviews into the advice firms involved or for the FCA to set up a redress scheme for the workers.
An FCA spokesperson said: “We thank Mr Smith and Mr Kinnock for their letter, and will respond soon.
“We have undertaken a number of actions designed to help those who transferred out of the British Steel Pension Scheme. This includes writing to 7,700 former BSPS members to help them revisit the advice they received, and to complain if they have concerns. We have also held events in Port Talbot.
“We have several investigations ongoing into the advice that was given at the time. We have banned contingent charging in most circumstances to remove the conflicts of interest which arise where a financial adviser only gets paid if a transfer goes ahead.”
BSPS saga
Both Mr Kinnock and Mr Smith have been campaigning and lobbying regulators, as well as the Financial Services Compensation Scheme and ombudsman service, in order to get justice for British Steel victims.
Three years ago British Steel Pension Scheme members were asked to decide whether to move their DB pension to a new plan, BSPS2, or stay in the existing fund, which was then moved to the PPF as part of a restructuring of pension liabilities, or to transfer out altogether.
As a result about 8,000 members transferred out of the old scheme, with transfers collectively worth about £2.8bn.
But concerns about the suitability of the transfers were soon raised, leading to an intervention from the FCA that resulted in 10 companies – key players in the debacle – stopping their transfer advice service.
amy.austin@ft.com
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