A test case which could establish the extent to which corporate policyholders' legal costs are covered by the Financial Services Compensation Scheme (FSCS) is set to go to appeal.
A test case, which could establish the extent to which corporate policyholders' legal costs are covered by the Financial Services Compensation Scheme (FSCS), is set to go to appeal.
The FSCS serves to compensate companies when insurers collapse. In the past it has covered private policyholders for 90% of their legal costs.
However, it has now resisted extending the same treatment to corporate policyholders.
In a test case brought by IT firm Geologistics last year a High Court judge ordered the FSCS to cover its legal costs. However the FSCS has now decided to appeal.
An FSCS official said: "It's important for this issue to be clarified as soon as possible. Part of our role is to ensure that the scheme doesn't make payments that may be unlawful."
