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The £900,000 fine given to financial services organisation Thinc could lead to further professional liability claims, according to one expert.
Liability lawyer Nik Carle said before the fine, given for sub-prime mortgage advice failures, there had been no indication of what constituted acceptable sub-prime lending behaviour.
Now, he said, there is scope to use Thinc's actions as a benchmark for assessment.
He told IFAonline: "This decisive move by the Financial Services Authority (FSA) sets a high bar for the assessment of sub-prime lending and advisory practice.
"There is certainly scope to adopt the FSA's Principles for Businesses as a benchmark when litigating independent financial adviser claims and contributory negligence allegations generally in this field."
He is urging sub-prime insurers and advisers to put lessons learned from the Thinc case into practice and said an industry standard could be set.
The FSA fined Thinc for "inadequate risk management and compliance systems for its sub-prime mortgage business" between January 1st 2006 and September 30th 2007.
John Simmonds, chief executive of Thinc, said the company regrets the shortcomings of its record-keeping processes and is implementing a comprehensive remedial plan.
