Lawyers working to help victims of the British Steel Pension Scheme (BSPS) transfer mis-selling scandal have questioned whether the Financial Conduct Authority’s (FCA) proposed £71m compensation scheme goes far enough.

Although the law firm, Clarke Willmott, welcomed the scheme, it warned that "many" of the 7,700 people who transferred would be excluded.

It noted that only those who were advised to transfer out between 26 May 2016 and 29 March 2018 would be covered by the redress scheme.

Furthermore, the firm said that many of those that transferred during that window would still be excluded from the scheme, as they would have become time-barred before the scheme comes into effect.

“Very broadly speaking, you have six years to make a claim or complaint about the transfer advice received,” commented Clarke Willmott partner and financial services litigation specialist, Philippa Hann.

“The FCA has, under current proposals, confirmed that the clock will only stop running for these purposes when the scheme rules are published, which is set to be ‘autumn/winter’ 2022.

“This means that anyone who transferred out before autumn/winter 2016 could well be time-barred and not only unable to participate in the redress scheme, but out of time to make a claim or complaint at all. If publication of the scheme rules is delayed, more people could be excluded.

“Ultimately, those people could be left entirely behind and unable to pursue compensation at all. This really isn’t good enough, more so because those who transferred out earlier have the largest losses (around £320,000 on average).”

Hann stated that anyone who transferred before 2017 should be seriously considering taking steps to make a complaint now to avoid the risk of being time-barred and not being able to pursue any compensation at all.

“Further, anyone treated as an ‘insistent client’ by their adviser will also be excluded from the redress scheme,” she continued.

“We have acted for a number of people in this situation and all of our complaints where final decisions have been issued by the Financial Ombudsman Service have been successful. We don’t think those treated as insistent clients should be excluded.

“Whilst former BSPS members may be excluded from the redress scheme, they can still make complaints which can be referred to the Financial Ombudsman Service. We would encourage anyone treated as an insistent client to make a complaint.”

Commenting in response, an FCA spokesperson said: “We are consulting on proposals for a redress scheme to ensure that BSPS members who were given unsuitable advice to transfer from the scheme and suffered financial loss receive redress. The consultation will close on 30 June 2022.

"Any consumer can make a complaint now rather than waiting for the outcome of the consultation. We would encourage all consumers, particularly those who received advice in 2016, to consider complaining now if they are concerned that the advice they received was unsuitable. They can access support through the Advice Checker on our website or via the Financial Ombudsman Service.

“If we implement a redress scheme, firms will need to check that insistent clients have been correctly labelled. These clients will also be informed of their right to complain to the Financial Ombudsman Service if they don’t agree that they were insistent.”

Lawyers at Clarke Willmott set up a taskforce in 2018 to help victims claim compensation and have so far helped over 1,000 steelworkers recover more than £20m in compensation.

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