The Financial Services Compensation Scheme (FSCS) has racked up almost £300,000 in legal costs fighting the judicial review against its decision to classify Keydata as an intermediary.
Money Marketing, Fund Strategy’s sister publication, understands the FSCS’s stated costs were £280,000, including paying its law firm Bingham McCutchen and appointing Charles Flynt, QC, as counsel to defend its case in the Birmingham High Court last week.
The FSCS’s costs are more than five times the amount incurred by Regulatory Legal, which represented the 212 IFA firms that believe the intermediary industry should not foot the compensation bill for the company’s collapse.
Regulatory Legal spent £50,000, which includes hiring counsel Anthony Speaight, QC, and Andrew Maguire. (article continues below)
If the FSCS wins the review, then legal costs will fall on Regulatory Legal, while if it loses, the industry will fund the costs.
Alan Lakey, a partner at Highclere Financial Services, says: “When it is other people writing the cheque, it is very easy to be free with the funds. This is part of the problem we have—every time we threaten legal action against the regulators we pay their fees if we lose and if we win we still probably pay those fees to some extent.”
Judge Justice Beatson is due to issue a decision this month on whether the FSCS should have classified Keydata as an intermediary.