Class Law hits out at DWS probe into ailing insurer

THE INDEPENDENT: firm threatens FSA with legal action

City law firm Class Law piled pressure on the liquidator of collapsed insurer the Independent this week, saying it could not understand why an investigation by City counterparts Denton Wilde Sapte has not been completed, and threatening the Financial Services Authority with legal action.

Denton Wilde Sapte was retained last April by PricewaterhouseCoopers (PwC) - the Independent's liquidator - to investigate the role of the Independent's former advisers, including City firm Herbert Smith.

Class Law partner Stephen Alexander, who is acting for many creditors of the Independent, said: 'We can't understand why it's taking so long to complete.'

He said creditors were suffering every day and added: 'There needs to be more urgency on the part of the liquidator.'

Herbert Smith continues to act in the meantime for PwC on the provisional liquidation.

Meanwhile, Class Law claims that the FSA failed to act on a tip-off from French authorities that the insurer was in deep water six months prior to the Independent's collapse.

The French had banned Independent's French subsidiary from taking on new business amid fears that it was under-capitalised.

Mr Alexander said Class Law will consider legal action to obtain the documents if they are not forthcoming.

An FSA spokesman said a letter sent by the French authorities about a sister company of the Independent had 'no bearing on the issues we're looking at', and would not be disclosed to creditors.

A PwC spokeswoman said that she could not comment on what actions may or may not be brought.

She added: 'We note these complaints come from legal representatives whereas we have no evidence that creditors themselves are actually displeased.'

Jeremy Fleming