The Financial Services Compensation Scheme's (FSCS) pursuit of IFAs who it alleges mis-sold Keydata products has been delayed after the scheme reached settlement deals with some of the firms' professional indemnity (PI) insurers.
The FSCS is pursuing around 500 financial advisers through the courts who it accuses of selling Keydata investments - both those backed by Lifemark and SLS bonds - to unsuitable clients, in order to recoup some of the £400m the scheme has paid out in compensation to those clients.
A case management conference - where the FSCS would outline its claims against six lead test case firms - was due to be held on the 21 March, but this has now been pushed back to sometime in May, according to law firm Beale and Company partner Damian McPhun, who is representing a number of advice firms who are defendants in the case.
The FSCS launched its test case against six advice firms last year. However the PI insurers of the majority of those firms have since reached an out of court settlement with the FSCS, meaning they can no longer be pursued through the courts.
As a result the scheme is now searching for a new set of lead test cases, those with insurance cover provided by insurers other than those which have already settled all their claims with the FSCS.
If the FSCS is unable to find enough firms with insurance that are suitable test cases it will have to try and convince the court that IFAs without insurance can still be test cases, said McPhun.
A spokesperson for the FSCS said the scheme could not comment on an ongoing case.
Read more on Keydata HERE
Read more on the FSCS HERE
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