FCA 'immune' from adviser court case

According to an article published by FTAdviser, Alistair Hinton and his wife Terry were forced to sell their financial advice company, Hinton Associates, in 2011 after the former FSA claimed the pair had been employed by a censured firm. According to Mr Hinton, the same register also falsely claims that both he and his wife were at one time directors of that firm

The censured firm, Berkeley Independent Advisers Limited, later acquired by Tenet, was declared in default by the Financial Services Compensation Scheme in 2006 after going into administration.

Mr Hinton and his wife were listed as appointed representatives of Berkeley, but claimed that neither he nor his wife had ever worked the firm. This resulted, he said, in loss of business, and he subsequently complained to the FSA.

According to Mr Hinton:

"The FSA has correctly admitted in writing that there were never any contracts of any kind between either myself or my wife and Berkeley; she was employed by our firm and all the advice that she gave was processed through our firm and our FSA approved headed notepaper and other documentation clearly demonstrate who was who and who was authorised and regulated by whom. IN short, she never worked either as an employee or sub-contractee of Berkeley.

"Secondly, a quick check of the companies’ register reveals that neither of us was ever a director of Berkeley."

The FSA admitted that while the information had been misleading, unclear and unfair, it was “factually and legally correct”, which Mr Hinton has disputed.

He now wants to sue the FCA for libel but has been told it has statutory immunity from liability for damages, regardless of the merits of the case. Mr Hinton said this effectively prevents him from taking the FCA to court.

Mr Hinton said:

“We just cannot do anything about it. The government won’t even give us a reason why they have been given this immunity. People know you can sue the police and the Serious Fraud Office, but not the FCA.”

"The only contract was between our firm as contractor and Berkeley as contractee. As we pointed out to deaf ears at FSA, neither our firm nor either of us as individuals ever "represented" Berkeley nor (as FSA sought to allege) was our firm or were we “agents for Berkeley”; neither we as individuals nor our firm were ever asked or contracted to “represent” Berkeley or act as its “agents”, nor did we or our firm ever do so.

"Our firm was at no time under contractual obligation at any time to do anything “for” Berkeley other than adhere to FSA rules and regulations – ergo my wife was never and adviser “for” Berkeley."

Under the Financial Services Act 2012, the FCA cannot be sued for libel or damages unless it was acting “in bad faith” or unlawfully, according to the Human Rights Act 1998.

In response, the FCA has said it doesn’t comment on individual cases. The Treasury also declined to comment on why the watchdog had this immunity.

An online petition 'Equal under the law?' regarding the FSA/FCA’s statutory immunity has since been launched in response to the incident.