City watchdog could face legal challenge over HBOS report delays

14th August 2015


The City watchdog could be taken to court if it continues to delay the publication of its report into the collapse of HBOS.


Threats by families of British soldiers killed in Iraq to take legal action against John Chilcot, who launched the Chilcot inquiry into the war, do not bode well for the Financial Conduct Authority (FCA) which has pushed back the publication of its HBOS report.


The report was commissioned in 2012 following the collapse of the bank in the 2008 financial crisis. The report has been held up as key figures involved in it have rebutted the findings, which has also happened in the Chilcot report.


The delaying of the report is called ‘Maxwellisation’ after newspaper owner Robert Maxwell who was criticised in a government report in 1969 and subsequently took the Department of Trade and Industry to court.


Philip Meadowcroft, a former shareholder in HBOS, told the Financial Times that ‘abuse’ of Maxwellisation rules was the problem as it meant the report publications could be held up indefinitely.


He also said the legal threats over the Chilcot report were a ‘serious warning’ to the FCA.


‘There seems to be little appetite in Whitehall to resolve the absurd consequences of Maxwellisation as they have been played out in both the Chilcot and the HBOS inquiries,’ Meadowcroft told the newspaper.


‘Perhaps there are one or two parliamentarians, past and present, who may not come out of such inquiries smelling of roses – and that’s apart form the regulators, past and present again, and the former directors in the case of HBOS.’


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