Maxwellisation allows firms and individuals criticised in an official report a right of reply prior to publication, but the committee has raised concerns that the lengthy proceedings could risk undermining confidence in the public review process.
The Treasury Committee’s review will seek to ensure that Maxwellisation is used in “a fair and proportionate manner” in any future public financial inquiries, by setting out what the law requires and the problems that arise from the process.
Its report will focus particularly on the application of Maxwellisation in financial public reports, including inquiries and investigations.
Following a seven year wait, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) published their report into the collapse of HBOS in December last year, with the Maxwellisation process taking 14 months and named as a major reason the report’s publication was held back.
The delay had significant repercussions on the FCA’s ability to carry out proceedings against senior bosses involved in the affair, with a six-year statute of limitations preventing regulators from imposing fines on those investigated for the bank’s failure.
