Chief executive of the General Insurance Standards Council (GISC), Chris Woodburn, predicts the Competition Commission Appeals Tribunal (CCAT) will throw out the Institute of Insurance Brokers' (IIB) challenge.

Woodburn said the Office of Fair Trading (OFT) may have used the wrong legal route to approve the General Insurance Standards Council's (GISC) rulebook, but the decision was correct.

The CCAT will decide on the IIB's appeal against the OFT's ruling on September 17.

Woodburn said he believed the OFT's decision to approve the GISC rulebook was correct. He said there were two routes the OFT could have taken to approve the rulebook – negative clearance and exemption. The OFT used negative clearance because it said the GISC did not perform an economic activity.

However, Woodburn said he thought CCAT president Sir Christopher Bellamy would find the OFT should have considered the GISC's application for exemption instead.

“One distinct possibility is that the tribunal will say to the OFT ‘you got to the right decision by following the wrong route – you should have considered an application for exemption from the GISC',” he said. “If it's suggested we apply for exemption, we will do that.”

He said the OFT would take a further four months to consider an application for exemption, pushing the GISC's start-up date into 2002.

“We would continue to be a voluntary organisation, as we are at the moment,” he said. “That doesn't dismay me because, given the number of new applications, we're gaining market penetration all the time. It would be frustrating if we had to wait another four months for Rule F42, but it's not disastrous.”

The GISC had 5,342 members and 1,265 applications for membership by the end of August. However, 44 “small” brokers have withdrawn their applications and seven had withdrawn their membership.

IIB director general Andrew Paddick predicted a “tremendous exodus” of brokers from the GISC if the CCAT decision was in the IIB's favour. “There will be a large number of professional brokers leaving because they want to be regulated by a professional body,” he said. “The GISC can have the rest.”

The OFT would not speculate on the outcome of the case.