Andrew Paddick suffered a blow to his plan of establishing an alternative regulatory regime for brokers after the Office of Fair Trading (OFT) this week threw out the bulk of his objections to the General Insurance Standards Council (GISC).

The OFT decided that the GISC is not infringing competition law by using its dominant position to penalise and discriminate against general insurance brokers if they do not join it.

It has also rejected Paddick's request for an interim measures directive to delay the GISC from bringing Rule F42 into effect.

Rule F42 gives insurers the power to cancel the agencies of all intermediaries that are not members of the GISC. It will become effective on September 1.

Both the timing of the announcement and the decision took Paddick, the director general of the Institute of Insurance Brokers, by surprise.

He submitted his second appeal to the GISC just over a month ago and had not expected the OFT to act until long after May 1 – the day after the current statutory regulator is repealed.

Paddick admitted he was incensed by the decision and threatened to call for the resignation of OFT director general John Vickers over the issue.

He has vowed to take the case to the Competition Commission Tribunal.

“We believe the OFT is completely wrong,” he said. “We'd like it to reject our Section 47 complaint without delay so we can go straight to the tribunal.

“If the OFT has made a mess of it, it'll be for the tribunal to decide.

“It's a very sad reflection on John Vickers personally. I'm getting so angry, I'm not far from calling for his resignation over this.”

Paddick's complaints largely concerned Chapter 2 of the Competition Act. However, the OFT is still considering his complaint concerning Chapter 1. It has not yet given a date for its decision.

The final step after a tribunal would be to take the case to the Court of Appeal where Paddick would only be allowed to argue his case on a point of law.

GISC spokeswoman Catherine Nicoll said the result was reassuring but added “we're not gloating”.

She added: “I don't want people to see this as a very confrontational us-and-them. We're trying to conduct ourselves in a way that serves well all the businesses for whom there may be implications.”

In a packed British Insurance Law Association lecture at Lloyd's recently, GISC chief executive Chris Woodburn admitted Paddick's challenge was one of the big issues facing the GISC.

But Nicoll said it wouldn't be right to concentrate overly on it.

“The GISC is addressing an enormously diverse industry in a fair manner and this sort of activity actually involves a very small part of it,” she said.