Freshfields Bruckhaus Deringer and the Solicitors Regulation Authority (SRA) have been criticised in a parliamentary report into ScottishPower’s ‘cashback guarantee’ scandal.
A report by an all-party Parliamentary group chaired by Andrew Percy MP, said that the warranty scheme was ‘effectively a fraud on the public’. When the scheme collapsed customers lost out on a collective estimated £75m.
The report states Freshfields had worked with Scottish Power to ‘foster misinformation’ about the cashback promise to 625,000 customers.
The report said: ‘In essence ScottishPower were lying about their liability so that they could secure the best deal for them. This group is shocked that a major utility and prominent law firm could act in such a way when the money belonging to 625,000 defenceless consumers was at stake.’
The group also found both Freshfields and Scottish Power’s behaviour ‘very concerning’, and accused Freshfields of applying pressure during the sale of guarantee contracts to now defunct company, Powerhouse.
The report said: ‘One letter from Freshfields appears to use strong arm tactics, at one point suggesting that if Powerhouse collapsed under the pressure, ScottishPower could always come to the aid of customers on a “White Knight” basis.’
According to the report, the SRA threw out a complaint made by the founder of the campaign group Scottish Power Broken Promises, Alan Campbell. The SRA concluded Freshfields could not be said to have lied to regulators.
However, the MPs criticised the finding in the report, stating: ‘Though the SRA’s reasoning on this issue may be technically correct, it only exemplifies the backward logic applied to this entire scandal. The SRA are effectively saying that no-one can be proven to have lied about the liability for the Cashback Promise until a court has ruled either way.’
Freshfields would not comment on the report but said in a statement: ‘The SRA concluded after careful consideration of the evidence that there was no misconduct on the part of Freshfields, and decided they will not be taking any further action.’
An SRA spokesperson said: ‘We now have a copy of the All-Party Parliamentary Group (APPG) on the Scottish Power Cashback Mis-selling report and are looking at the detail. We have not been asked to meet with the APPG or contribute to their enquiry, but we are always happy to provide information on how we work.’