Payments to women workers who won a £548 million equal pay settlement from a Scots council will be unaffected after the firm suspended business yesterday.
Action 4 Equality Scotland (A4ES) closed its website and stopped taking on clients after a financial watchdog warned the firm could be breaking the law.
The firm’s director Stefan Cross QC said all activities had been suspended after the Financial Conduct Authority said the firm may not be authorised to carry out claims management work.
A4ES represents the majority of 16,000 equal-pay claimants compensated by Glasgow City Council. Mr Cross previously said 6.9% was deducted from claims to cover legal fees. A proportion paid to his firm.
It is understood payments to the women have been made – with legal fees deducted – and will be unaffected by the firm’s suspension of business.
A4ES has handled 300,000 claims around the UK, recovering almost £4 billion in settlements.
The FCA has written to A4ES to say it was carrying out claims management activities in breach of legislation introduced in Scotland in April.
Mr Cross said he was unaware of the change and said the probe would not affect claims because they are handled by a London firm.
One woman represented by A4ES said the firm has told claimants about the situation. Council worker Frances Stojilkovic, a leading campaigner for compensation from Glasgow City Council, said: “They said it won’t affect us.”
The dispute with Glasgow City Council over women being paid less than men for doing jobs in the same grade was settled in January.
Mr Cross said A4ES will now make an application to the FCA to become a regulated claims management company.