Blame Brown and be frightened of the FSA says Regulator Sants

March 18, 2009

Hector Sants, Chief Executive of the FSA, made two strong speeches last week. In one he blamed Gordon Brown for his contribution to the economic crisis. In the other he warned of a tough new attitude to regulation which ought to focus minds somewhat.

“It is quiet out there. Too quiet”. I am not sure whence I get this expression, with its intimation of pending violent attack. It could have been in one of those novels of war or Empire which I read as a child – about Hornblower or Richard Hannay or, later, of Flashman; it might have come from one of the old war films, with John Mills peering across the trenches, or scanning an empty sea or sky for the threatening Hun; perhaps it was in a Western, as John Wayne’s instincts told him that a cloud of arrows could be expected anytime soon. These stories often include a powerful but evil figure whose outward success conceals a past which is uncovered in the closing chapter or the last reel. His reputation might, for example, have depended on an alleged “economic miracle” which is shown to have been a sham, bringing misery for millions as it fails.

Sants quotationThis sense that something is about to happen has been hanging over those whose business involves litigation and regulatory or internal investigations. The battle analogy is an apt one. Some of the units have been fighting hard since the economic “war” began; others have seen their numbers thinned out as they wait for the coming conflict. As in all the most gripping war stories, the attack is expected on more than one front.

One of those is litigation. The lull in the UK has lasted for ten long years. The CPR achieved its object of persuading parties out of the court system not, as was intended, by encouraging parties down the flower-strewn path to mediation but by making it too expensive to litigate. There is no one baddy here, but several: we can blame the government for its neglect of civil justice and its contempt for that admirable principle of “access to justice” which it mouthed even as it hiked court fees and cut Legal Aid; we can suggest that the rules and those who administer them have paid excessive attention to encouraging settlement and too little to the basic mechanics of case management; we can point to lawyers whose disdain for cutting the hours spent has been obscured by complaints about the rates per hour; not least we can point to clients who produce sow’s ear data and whine about the cost of turning it into silk purse evidence. Read the rest of this entry »


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