The Law Gazette
MPs have criticised the Solicitors Regulation Authority for what they say is a failure to examine the conduct of a magic circle firm over its role in a cashback guarantee scheme allegedly mis-sold to consumers.
A report published today by an all-party parliamentary group (APPG) chaired by Conservative MP Andrew Percy claims Freshfields had worked with the energy company ScottishPower to ‘foster misinformation’ about the relationship between ScottishPower and the cashback scheme which collapsed in 2003.
In its report, the group criticises the SRA for dismissing a complaint made by Alan Campbell, former director at PowerPlan and founder of a campaign group ScottishPower Broken Promises.
According to the report, the fact that the SRA’s response said ‘there is no such thing as a “true” or “false” statement of liability until a court has definitively determined the issue’ was not ‘morally justifiable’. The SRA is one of 14 regulators and government bodies whose conduct is questioned in the report.
It continues: ‘Of course this rationale completely disregards the rights of the customer who, quite reasonably, bought a product in good faith based on the reputation of the brand from which they purchased it ie. ScottishPower.
‘At no point could the customer have been aware, or in any position to challenge, the legal ambiguities of PowerPlan’s structure; nor were they ever in any realistic position to take their PowerPlan claim to court to receive such a ruling.’
An SRA spokesperson said the regulator is looking at the detail of the report. The spokesperson added: ’We have not been asked to meet with the [parliamentary group] or contribute to their enquiry, but we are always happy to provide information on how we work.’
The report recommends that the Serious Fraud Office and National Crime Agency investigate the alleged mis-selling, and the way liability for cashback was reported in ScottishPower’s accounts.
The report said: ‘This group is shocked that a major utility and prominent law firm could act in such a way when money belonging to 625,000 defenceless customers was at stake.’
A spokesperson at Freshfields said: ‘The SRA concluded after careful consideration of the evidence that there was no misconduct on the part of Freshfields, and decided they will not be taking any further action.’
A ScottishPower spokesman described the allegations against the company as ‘both factually and legally flawed’, adding that the findings of the APPG were ‘demonstrably wrong’.
