Mousey
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Post by Mousey on Mar 29, 2021 14:52:08 GMT
This may be of interest to those considering the FSCS as a potential route to explore.
A judgment of The Hon. Mr Justice Bourne in the case of Donegan & Ors, R (On the Application Of) v Financial Services Compensation Scheme Ltd was published today.
Paragraph 1 sums up the case quite well:
By this claim for judicial review the Claimants [Bondholders in LCF] challenge a decision announced by the [Financial Services Compensation Scheme] on 9 January 2020 ("the Decision"), stating that it would not pay compensation to a category of investors who had suffered losses arising from the collapse of London Capital & Finance PLC ("LCF").
Unfortunately, and with a large spoiler alert, the final paragraph reads:
It goes without saying that the Claimants and their fellow investors deserve the greatest sympathy for the plight in which LCF left them. Nevertheless, despite the force, lucidity and skill with which their case was advanced before me, the claim must be dismissed.
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shw
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Post by shw on Mar 30, 2021 14:43:55 GMT
Good reference thanks.
Looks like we would also probably waste our time,money and precious living experiences to take on any of the P2P platforms.
I still believe investors should be able to hold Administrators to account for the costs incurred to wind up the P2P platform loan book especially exorbitant fees.
Other than that it's tough excrement and play your own violin in splendid isolation !
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Mousey
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Post by Mousey on Aug 21, 2021 9:14:45 GMT
"London Capital & Finance plc bondholders withdraw their judicial review appeal"
A statement was made yesterday by the LCF Bondholders group - t.co/U1WLcXDa31
They have decided not to continue with their appeal citing "unmitigated, unreasonable and substantial personal costs risk that it would involve":
"The FSCS agreed at the outset of the JR not to seek to recover its legal costs of the judicial review case (as the winner of a case would usually be entitled to do). However, the FSCS has refused to extend the same agreement to the appeal. This means that, if our appeal were to fail, the four of us claimants would stand to be personally liable for all of the FSCS's legal costs."
The statement concludes:
"Overall, the lack of any route via the FSCS, the administrators or otherwise to identify or contact all (or even most of) the affected investors, a certain amount of bondholder fatigue, the diminishing returns for bondholders from the judicial review case following the announcement of the government's ad hoc compensation scheme and the ineffectiveness of the cost-capping order process to address all the costs of appeals, mean that our judicial review appeal will sadly now have to be withdrawn.
We remain of the view that the appeal is meritorious, as can be seen from our skeleton arguments for permission to appeal, which are being made available today at: shearman.sharefile.com/d-s41a3b0753e1148fe970b9d02899eff8c . The appeal is being withdrawn only due to the unmitigated, unreasonable and substantial personal costs risk that it would involve."
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agent69
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Post by agent69 on Aug 21, 2021 15:34:59 GMT
"London Capital & Finance plc bondholders withdraw their judicial review appeal"
A statement was made yesterday by the LCF Bondholders group - t.co/U1WLcXDa31
They have decoded not to continue with their appeal citing "unmitigated, unreasonable and substantial personal costs risk that it would involve":
"The FSCS agreed at the outset of the JR not to seek to recover its legal costs of the judicial review case (as the winner of a case would usually be entitled to do). However, the FSCS has refused to extend the same agreement to the appeal. This means that, if our appeal were to fail, the four of us claimants would stand to be personally liable for all of the FSCS's legal costs."
The statement concludes:
"Overall, the lack of any route via the FSCS, the administrators or otherwise to identify or contact all (or even most of) the affected investors, a certain amount of bondholder fatigue, the diminishing returns for bondholders from the judicial review case following the announcement of the government's ad hoc compensation scheme and the ineffectiveness of the cost-capping order process to address all the costs of appeals, mean that our judicial review appeal will sadly now have to be withdrawn.
We remain of the view that the appeal is meritorious, as can be seen from our skeleton arguments for permission to appeal, which are being made available today at: shearman.sharefile.com/d-s41a3b0753e1148fe970b9d02899eff8c . The appeal is being withdrawn only due to the unmitigated, unreasonable and substantial personal costs risk that it would involve."
Is this coded talk for 'we haven't got a hope in hell of wining the appeal'?
Given the amount of money involved (I believe around £230m was lost), I'm suprised they can't raise cash for an appeal.
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Mousey
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Post by Mousey on Aug 21, 2021 17:55:05 GMT
Is this coded talk for 'we haven't got a hope in hell of wining the appeal'?
Given the amount of money involved (I believe around £230m was lost), I'm suprised they can't raise cash for an appeal.
Well their legal team was working pro-bono so in their opinion might not be completely meritless.
It's worth repeating the following from their statement: The introduction of the government's ad hoc scheme has meant that the judicial review case has lost much of its import, being now "worth" approximately £2,000 for a typical investor who placed £10,000 in an LC&F ISA from January 2018 or £20 million in aggregate across all LC&F bondholders.
The scheme is explained as...:
...The government's response to the Gloster Review, including in the form of the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill, which proposes an ad hoc compensation scheme with an 80% return capped at £68,000. Please note that given the amounts involved and the likely substitution of the Treasury for bondholders in the administration (see point 1) additional amounts are unlikely to return to most bondholders, except perhaps those with the very largest losses (i.e. for those where the cap of £68,000 results in recovery of less than 25% of their much larger losses).
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Mousey
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Post by Mousey on Sept 21, 2021 9:40:27 GMT
This concerned "Judicial Review proceedings to challenge the lawfulness of the FSCS's refusal to award them compensation in respect of their losses". The claimants had held investments in a so-called wind-bond. Beaufort facilitated the transfer of the investment to a so-called power-bond. The claimants case is that "Beaufort failed to comply with its regulatory duty under COBS Chapter 10 to assess the appropriateness of the power bonds for them". In any event both bonds failed.
The Honourable Mrs Justice Collins Rice concluded:
Most unfortunately for the Claimants, however much they may regret the involvement of Beaufort in their financial affairs, the alternatives do not appear to have offered a better prospect for them. Even if Beaufort was at fault, it was not Beaufort's fault that both the wind bond and the power bond failed, and that made the Claimants' losses inevitable. The FSCS's remit begins and ends with the consequences of Beaufort's actions. But the Claimants' financial predicament is not demonstrably worse because of Beaufort than it would have been anyway. Not all investment losses are eligible for compensation. The FSCS was entitled in all the circumstances to find that the Claimants' situation was not covered by the statutory scheme.
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Mousey
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Post by Mousey on Sept 22, 2021 8:52:39 GMT
The Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill is expected to have its third reading in the commons today.
clearthelobby.co.uk describes the bill: Creates a fund to compensate the 11,625 bondholders whose investments were largely wiped out when the financial services firm London Capital & Finance collapsed in 2019. The scheme will be financed by the Treasury and administered by the Financial Services Compensation Fund. The bill also allows the Treasury to make a loan to the Fraud Compensation Fund, to help it pay out £350m to victims of pension fraud who have recently come into scope of the fund.
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