A law firm which led a £548million equal pay claim against Scotland’s biggest local authority has suspended its activities.

Action 4 Equality Scotland (A4ES) – which is representing about 18,000 women in a dispute with Glasgow City Council – took the decision after industry watchdogs said it could have broken the law.

According to founder Stefan Cross, the Financial Conduct Authority (FCA) said his firm may have been carrying out claims applications in breach of new legislation.

Claims management companies in England and Wales have been regulated for several years, although this was only introduced in Scotland in April.

A4ES has admitted it was unaware of the change in law and had not applied for a licence to operate.

Stefan Cross QC, a director of the company, insisted it would not affect the ongoing settlement process.

But he did admit the development may impact on future negotiations.

He said in a statement: “Obviously, the firm instructed our lawyers to give us advice on the contents of the letter from the FCA and to engage with them.

“A4ES intends to make an application to the FCA to become a regulated claims management company.

“This can take several months but we will not be undertaking regulated claims management activities until we receive the FCA’s formal position.”

He added: “As a result it was decided to suspend all of the A4ES’s activities while these matters are investigated.”

The lawyer confirmed the firm had closed down its website after being contacted by the FCA.

Cross said the move would not affect the ongoing settlement process as it is being handled by Addleshaw Goddard, another legal firm.

However it could have an impact on the claims of caterers employed by Baxter Storey.

The long-running pay dispute was settled in January. Glasgow City Council agreed to pay out a reported £548million to compensate women for money they should have been paid.

Many cases went back to 2006 when the new job evaluation scheme was adopted.

An FSA spokeswoman declined to comment but confirmed there had been recent claims to regulations.

Read More

Top news stories today