Attempts by the Financial Industry Complaints Service (FICS) to make members responsible for its costs in the event of judicial reviews have been knocked back by members. This has left FICS looking for alternative solutions that would save it from having to cough up vast amounts of money in legal bills when members don’t agree with the adjudications against them.

FICS CEO Alison Maynard told Sunrise Exchange News in May that the service needed to change its rules after its insurer threatened to cancel professional indemnity cover because of the costs involved with legal challenges by members.

FICS has had three recent legal challenges to its decisions. One of the members successfully applied for a judicial review of a FICS decision, which left the scheme with a large legal bill.

Ms Maynard says the service decided not to go ahead with the proposed changes after consulting members.

“This is still an issue for us, and we are monitoring the situation, and looking at our options,” she told Sunrise Exchange News yesterday. “However there have been no judicial review requests by members in recent months, so that has been a good thing.”

She says FICS has managed to arrange professional indemnity cover until the end of the year.

While dissent from members over certain adjudications is not unusual for dispute resolution schemes, FICS says challenges using external legal mechanisms are. “Such challenges could be seen to undermine the viability of the schemes,” the organisation said in a bulletin to members.