Lawyers acting for hundreds of savers who lost money through failed financial adviser Knight Williams yesterday said the financial services industry should set up a rescue fund for clients.
Neil Micklethwaite, head of commercial litigation in the City law firm Dibb Lupton Broomhead, said every legal avenue would be explored to win justice for the savers.
But he argued that time was - literally - running out for many of the mainly elderly savers involved in the Knight Williams Action Group.
Mr Micklethwaite raised the possibility of the City's senior watchdog, the Securities and Investments Authority, or other sectors of the financial industry, setting up an independent fund to help the savers.
The fund would be similar , he suggested, to that of the Investors Compensation Scheme, the industry's own lifebelt. The ICS has said it is unable to prioritise the Knight Williams investors over the heads of equally desperate claimants.
Knight Williams & Co, which went into liquidation in July, claimed to be a retirement specialist. Its savers argue they were told their money would be safe, and that neither the risks of equity investments or the unusually high management charges on their funds were ever properly explained to them.
Kenneth Jordan, one of the action group's founder members, said: "I am in my 70s. Time is not on our side, members of our group are going down without getting any results from their claims for compensation."
Mr Micklethwaite admitted that drawn-out legal action may not be the best option. His suggestion of a special levy for the investors came despite, as he acknowledged, the relative failure of similar efforts in the City, including the fund for Maxwell pensioners.
Options under consideration by his firm include taking legal action against Knight Williams directors and others who contributed to the financial losses suffered by the savers. Using the law to force the SIB to take tougher action against Knight Williams, or disqualify their directors and staff from working in the financial industry again, was also not ruled out.
Other possible moves, such as forcing the investment management regulator, Imro, to take disciplinary action against one of the Knight Williams web of companies which is still trading, will be examined.
Neil Cooper, partner at chartered accountants Robson Rhodes, said his firm had also agreed to offer its services for free. A Robson Rhodes team will be helping the investors to prepare their case before the liquidator, so that they may be admitted as creditors of the Knight Williams company that failed.