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Monty Python film battle pushes JFSC legal fees to ten-year high

Monty Python film battle pushes JFSC legal fees to ten-year high

Monday 16 July 2018

Monty Python film battle pushes JFSC legal fees to ten-year high

Monday 16 July 2018


Jersey’s financial regulator’s spending on legal fees hit a ten-year high last year, rocketing to nearly £900k due to a “complex” case involving the film company behind Monty Python’s Life of Brian.

The Jersey Financial Services Commission (JFSC) spent £872,000 on litigation costs in 2017 – a jump of over a quarter of a million from the previous year when they stood at £613,000, and the highest spend since before 2006.

This was mostly due to the Royal Court case involving former investment manager David Francis, JFSC officials told Express. 

After a battle that rumbled on over many years, the financier was banned from working in the finance industry after being found to have secretly pumped nearly £3.5million of client money– including that of “vulnerable” individuals – into a film company set up by Beatle George Harrison in a bid to rescue it from Financial ruin.

Royal court

Pictured: The JFSC's ongoing battle with former financier David Francis was one of the main driver's behind last year's high legal costs.

The JFSC described the case as highly complex, “requiring a significant amount of time and resources.” There were 20 pre-trial hearings alone in the Royal Court, with the regulator required to address 27 points of appeal in total.

Having won the case, they’re now looking to recover these costs from Mr Francis.

The JFSC told Express that such cases – and the costs associated with them – weren’t something usual, however.

“Most cases can be resolved through cooperation and sensible dialogue with the registered person, but where that is not achieved or where the misconduct is so serious, the JFSC must maintain the ability to take action and enforce the regulatory standards,” a spokesperson said. 

Nonetheless, the regulator’s recently-published Annual Report for 2017 suggested that increasingly complex cases could pose a challenge and that it may be experiencing a “step change to greater levels of expenditure” as a result – something they branded a “concern.”

JFSC

Pictured: The JFSC said that issues under investigation were "growing in complexity", which could mean higher legal fees in future.

“2017 saw a marked increase in the cost of litigation in respect of our enforcement action. The issues under investigation are growing in complexity, are being harder fought, and potentially involve novel issues that need to be tested before the Courts. All of this exposes the organisation to spiralling costs. As a relatively small regulator, these rising litigation overheads are a concern for us and we have to make difficult risk-based decisions around which cases to pursue and how far they will be taken,” the report noted.

Litigation decisions have now been delegated to a standing sub-committee of the Board, including the Director General and other Commissioners to be nominated on a case-by-case basis.

But spiralling legal fees weren’t the only challenge identified in the report – recruitment and retention of staff was also said to be a difficulty.

The report explained: “Recruiting and retaining staff is challenging for any organisation but, as a financial regulator in a small jurisdiction, we face the more specific issue of requiring a particularly niche and specialist workforce. Sourcing these relevant skills can be difficult and in-house training and development is critical to bolstering existing expertise and corporate knowledge. 

“Ensuring we proactively mitigate the risk of losing unique skillsets is a key focus for the organisation and we have retention strategies in place to lessen the potential impact of high turnover.”

The report's publication follows the departure of JFSC Director General John Harris, who announced last week that he would be stepping down after more than a decade due to "stress" and fear of "burnout".

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