Heavyweight financial services silk Andrew Green QC (pictured) of Blackstone Chambers has been appointed as a specialist adviser to the Treasury Select Committee and commissioned to review ‘Maxwellisation’ after it took regulators seven years to publish a report on the failure of HBOS.
A parliamentary committee has begun a review into the public inquiry process of Maxwellisation, the process by which those who stand to be criticised in a public report are given an opportunity to respond to criticisms prior to publication. It follows events in December where UK regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) published their report into the collapse of HBOS some seven years after it collapsed.
In a letter written by Andrew Tyrie MP, chairman of the Treasury Committee, to Chancellor George Osborne outlining the terms of reference of the review, Tyrie blames Maxwellisation, which lasted for 14 months, in delaying the HBOS report. ‘Some argue,’ the letter said, ‘that this took an unnecessarily long time.’
Evidence taken by the Treasury Committee ‘suggests that a balance needs to be struck,’ the letter said, as there is a ‘risk that very lengthy Maxwellisation proceedings could undermine confidence in the public review process.’
The review aims to make recommendations that can guide future public financial inquiries and to ensure any Maxwellisation process carried out is fair and proportionate.
Green QC is advising alongside a team of junior barristers from Blackstone. He is the author of the ‘Report into the FSA’s enforcement actions following the failure of HBOS,’ published in late 2015 which he was instructed by the FCA and PRA (and approved by the Treasury Select Committee) to produce.
Commenting on the announcement, Tyrie said: ‘This review will establish what the law requires, and the problems that may arise, from Maxwellisation. It may also make recommendations for remedy. It took seven years for taxpayers – who had to foot the £20.5bn bail-out of HBOS – to obtain a full explanation of HBOS’s failure. Serious management, governance and regulatory oversight failures all contributed to the bank’s collapse. The seven year wait was prolonged by Maxwellisation.’
He added: ‘Maxwellisation was never intended to be a means by which interminable argument would develop about every last detail of a regulator’s report. To permit that would undermine confidence in the public review process. The Committee may have a lot to examine.’
Maxwellisation is named after the late newspaper tycoon Robert Maxwell, who was criticised in a public inquiry in 1969 but had no right of reply.