In a statement, the FCA said the challenge comes from a number of pension advisory firms who are members of the British Steel Action Group, advised by FS Legal Solicitors.
Commenting on the matter, the FCA said it is confident its decision to set up a redress scheme is appropriate and that it will “vigorously defend it”.
“In making our decision we considered extensive stakeholder feedback from the consultation process,” the regulator said in a statement.
However, it said in the “unlikely event” that the challenge is successful and the scheme is cancelled, the usual time limits for complaining and referring complaints to the Financial Ombudsman Service will apply.
This would risk former BSPS members who think they may have received poor advice to transfer out of their pension scheme in 2016 or early 2017 being timed out from making a complaint.
As a result, it has said former BSPS members who received advice before 30 April 2017 should complain to the firm now and refer their complaint to the Fos if they are unhappy with the firm's response.
If former BSPS members have already complained and are unhappy with the firm's response, they should refer the matter to Fos within six months of the date of the response to ensure that they are not timed out of the scheme if it is cancelled.
‘Attempt to delay’
The FCA believes the legal challenge is an attempt to delay the payment of redress to some former BSPS members.
However it said if it causes scheme timings to change it will let former BSPS members and other stakeholders know.
In the meantime, the FCA said firms should continue to prepare for the implementation of the scheme.
It reminded firms that the scheme means firms must review the advice given to BSPS members even if the time limits for making a complaint run out after the scheme starts.
It added: “We are confident that our decision to implement a scheme will ultimately be upheld.”
BSAG represents firms which advised members of the BSPS.
Responding to the FCA's comments, Gareth Fatchett, solicitor and notary public partner at FS Legal Solicitors said:
"The FCA have taken six years to deal with BSPS. Many firms had DB based file reviews which took the FCA over one year to complete. The BSAG firms issued a very complex claim in 28 days. Any sensible person knows where the delay has been caused.”
In his view "the blame shifting is the prelude to the scheme being dropped by the FCA. He added: "They have made a real mess of BSPS from start to finish."
How did we get here?
During 2017, BSPS members were asked to make decisions about their pensions as part of a restructure of the scheme.
About 8,000 members transferred out of the 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 Financial Conduct Authority that resulted in a number of advice firms – key players in the debacle – stopping their transfer advice service, while others went out of business.
The debacle created a mountain of liabilities, which lawyers believe could end up costing the industry up to £300mn.
jane.matthews@ft.com
