About

Team size: 15

Major legal advisers: Addleshaw Goddard, Bevan Brittan, Burges Salmon, Burness Paull, Clifford Chance, Dentons and Eversheds Sutherland

What are the most important transactions, litigations, or other major projects that you have been involved in during the last year?

Over the past 18 months, FSCS’s legal team has been leading FSCS’s response to the collapse of London Capital & Finance (LCF). This is one of the UK’s biggest retail investment failures of recent times, and has already changed the market; from January 2020, the FCA banned the sale of “mini-bonds” to retail investors, and more recently (in December 2020) led to Dame Elizabeth Gloster’s report into the FCA’s regulatory supervision of LCF.

FSCS’s response to that collapse has required the legal team, working closely with external stakeholders, to utilise our technical expertise to investigate whether LCF carried out any regulated activities, for which FSCS could provide protection. Following that analysis, my team has worked with FSCS’s operational teams to devise a process for handling claims from around 11,000 bondholders. FSCS conducted a detailed review of over 2.3 million pieces of evidence for the LCF failure, including thousands of telephone calls and emails; one of the largest reviews we have ever conducted. To do so, the legal team has been instrumental in devising an innovative approach to the review, utilising automation and AI to reduce the need for manual review, coordinating teams across the UK to ensure that claims arising out of this high-profile collapse were processed as swiftly as possible.

At the same time, we successfully defended the judicial review challenge brought by certain LCF investors who were challenging FSCS’s decision that issuing bonds was not a regulated activity. This high profile, complex case, involving questions around the regulatory perimeter and consumer rights law, culminated in a three-day hearing in January 2021, with judgment in FSCS’s favour handed down in March 2021. Permission to appeal to the Court of Appeal was granted, but the claimants have since withdrawn their appeal.

What were the main difficulties your company faced during the initial Covid lockdown?

FSCS faced an increased number of potential firm failures and defaults, precipitated by the global pandemic. Indeed, FSCS was set up to protect consumers when things go wrong and especially when there are wider economic impacts on regulated firms. Yet, despite the increased pressures over the past year, FSCS harnessed its technology to operate more efficiently and effectively, not only allowing us to increase the number of claims we have processed to the highest level since the financial crisis, but also enhancing customer satisfaction to their best ever levels. At the same time, FSCS has focused on our people during this challenging year, and as a result has succeeded in increasing employee engagement, measured through a Net Promoter Score, to +67, another record. We have also completed our latest “Investors in People” review, achieving “Gold” standard for the first time, demonstrating how committed we are to our people.

Has working from home inspired any innovation in terms of the way you or your team work? Are there any standout products or tech you now use that you never did before?

Working from home has accentuated the importance of leading with influence and with empathy, and this has been my focus over this period. The challenges both at home and at work have brought a greater focus on the team’s mental health and wellbeing, and how people are impacted in differing ways. As a signatory to the Mindful Business Charter, mental wellbeing has been a priority for the FSCS legal team and we regularly explore ways we can improve mental health in the team. We have also tried to find varied ways to connect, organising regular team catch-ups and with our panel law firms. I have also recently been appointed as joint wellbeing lead at FSCS, and as well as championing mental wellbeing during this period, I have focused on promoting neurodiversity at FSCS so that we can become an ever more neuro-inclusive organisation. In championing mental health issues, I have also acted as a senior role model externally for InsideOut, a social enterprise with a mission to end the stigma of mental ill-health. The Black Lives Matter protests were also a catalyst for further dialogue across the organisation at FSCS, and have led to the Executive Team starting a new sponsorship programme for black talent at FSCS. Finally, in terms of technology and innovation, FSCS was one of the first adopters of Apperio, back in 2018, to help with its legal cost budgeting. Adoption of this technology has been extended to the finance team over the last year, as costs come under increasing external pressure and scrutiny.

The cost of the levy that funds FSCS is rising and has invited comment from senior individuals at the FCA. How do you see the future of the scheme and how does this relate to the pandemic?

Our latest levy forecast for this financial year, published in May 2021, was £883m, an increase of £133m on the previous year. We recognise that the levy is too high, is not sustainable for firms and reflects a system that needs to be reviewed. At the same time, we are using this crisis as a catalyst for FSCS to have a greater voice in bringing the necessary stakeholders together (the regulatory family, the government, and the industry), presenting data-driven insights that can inform the debate, and so bring about meaningful change. We have used the last 12-18 months to show to our stakeholders what FSCS can do, and so influence what the future can hold. We recognise the continuing need for FSCS in the future, to help promote confidence in the financial services industry and to protect consumers when things do go wrong, but also that we should play a more active, strategic role in helping to prevent consumer detriment and levy payer costs in the first place, by working collaboratively with our stakeholders to identify and root out poor behaviour and practices in the sector.

Have the complex legal ramifications of Brexit elevated the GC function within your institution?

The increasing complexity and associated challenges that the financial services sector faces, not only from Brexit but also from a whole host of other factors, have helped to propel the importance of the legal function at FSCS. At the start of the pandemic, I was promoted to chief counsel (from general counsel since 2010) and became a member of the FSCS Executive Team. This has enabled the legal function to have an increased voice in FSCS decision-making, and enabled me to influence not only decisions which are legally-focused, but also the shape and direction of FSCS’s strategy into the 2020s at a time when the pandemic has been a catalyst for change and new opportunities.