For Andrew Whittaker, general counsel at the Financial Services Authority (FSA), it has been a busy few months. What with one thing and another, times in the financial sector have been tough and the regulator itself has come in for intense scrutiny.
Clearly this stems from the debacle that was, and continues to be, Northern Rock, but as the FSA’s omnipresent press officer warns, discussion of individual regulated companies is very much off-limits. So talking around the subject has to suffice.
Explaining that the FSA’s legal function is divided into four distinct teams, which focus respectively on retail and wholesale markets, European issues and the regulation of small firms, Whittaker stresses that it would be “invidious” to say that any one team has been especially busy in recent months.
“We’ve had a lot of additional work over recent months dealing with current market conditions,” he says. “We’ve tried not to deal with that in one team but to share it out among lawyers across the division. By having a lot involved we’re less dependent on individuals.”
Which is probably a wise policy considering the regulator’s erstwhile retail chief Clive Briault, who had a long and distinguished career at the Bank of England and the FSA, lost his job after being held personally responsible for failing to spot Northern Rock’s flaws.
Quite what the legal team’s involvement in the Northern Rock situation has been is unclear. While responsibility for the retail team lies with lawyer Mark Threipland, Whittaker has overarching control of the division, which has an annual budget of £7m.
“I’ve been highly involved in all the high-profile market conditions issues that the FSA has dealt with since last summer and continue to be so,” says Whittaker. “I manage the division to ensure we’re involved in all the right issues and we’re confident that, as a team, we can stand by the advice we’re giving.
“I personally advise on the most tricky legal issues affecting the organisation. In the past I was highly involved in advising on whether we should get involved on the bank charges litigation.”
Suffice to say that Whittaker has been heavily involved in dealing with Northern Rock.
Apart from the legal side of things, Whittaker, who has been doing regulatory work since 1992, is a member of the FSA’s executive and regulatory policy committees.
“The executive and policy committees steer the organisation,” he explains. “The executive committee deals with management issues and day-to-day support issues, while the policy committee is about rule-making and guidance. I’m a full member of both those committees, so I’m actively involved in decision-making, not just legal advice.”
While Whittaker is in control of a reasonably large annual budget, just £500,000 of that is allocated to external legal spend, with the bulk of the watchdog’s legal issues being handled in-house.
“We mainly do work in-house because we work in a business where it would be very odd if someone else knew more about financial services regulation than we did,” he says. “There’s also the potential for conflicts, because if clients have a choice of going to the best lawyers or those that the FSA uses, then going to the ones the FSA uses would be a better bet.”
That said, Whittaker does turn to a trio of silks for counsel on a range of issues, with Michael Brindle QC of Fountain Court, Charles Flint QC of Blackstone Chambers and Ian Glick QC of One Essex Court all trusted FSA advisers.
“They give advice on a combination of public and commercial law,” says Whittaker. “When we’ve needed a law firm, we’ve used Ashurst. We’ve turned to them when preparing to defend litigation – we’ve had very little actual litigation against us, but it’s been threatened and we’ve had to have lawyers lined up.”
Whether he is expecting the threat of litigation to increase is unclear but, as revealed by The Lawyer (21 April), Whittaker is looking to have a few other law firms join Ashurst on the organisation’s list of external advisers. Rather than establishing a formal panel, however, he is looking to attract a short list of trusted individuals he can call on as and when the need arises. This should ensure the team achieves its, and the FSA’s, goals.
“We have a clear mission that we want to be trusted advisers, respected challengers and effective managers of legal risk,” adds Whittaker.
Name: Andrew Whittaker
Organisation: Financial Services Authority (FSA)
Position: General counsel
Reporting to: CEO Callum McCarthy
Turnover: £300mEmployees: 65
Annual external legal spend: £500,000
Main law firm: Ashurst
Andrew Whittaker’s CV
Education:1967-74: Torquay Boys Grammar School
1974-77: Balliol, Oxford
1977-78: College of Law
Employment:1978-82: Qualification and private practice as solicitor
1982-85: Legal roles at the Department of Trade and Industry (DTI)
1985-97: Legal policy and supervisory roles, DTI
1997-2000: Joint acting director, markets and exchanges division, Securities and Investments Board
2000-present: General counsel to the board, FSA