LONDON: Bondholders hit by the collapse of the investment firm London Capital & Finance (LCF) cannot recover their losses under Britain's Financial Services Compensation Scheme, a British High Court ruled on Monday.

The ruling will add to pressure on the government to stump up more cash after it said last year it would set up a scheme to determine if some of the bondholders could be paid a one-off payment in certain circumstances.

LCF went bust in early 2019, leaving 11,600 bondholders facing losses of up to 267 million pounds. LCF was regulated by the Financial Conduct Authority, but the mini-bonds were unregulated.

The bondholders had sought a judicial review of a decision by the FSCS to reject most of their claims.

The High Court agreed with the FSCS on Monday that the bonds sold by LCF did not meet the scheme's conditions for compensation.

"It goes without saying that the Claimants and their fellow investors deserve the greatest sympathy for the plight in which LCF left them. Nevertheless, despite the force, lucidity and skill with which their case was advanced before me, the claim must be dismissed," the ruling said.

Thomas Donegan, a partner at law firm Shearman & Sterling, which is representing a group of LCF bondholders, said the bondholders intend to seek permission to appeal against the decision.

The FSCS said it was pleased with the court's decision, and that it was still able to pay compensation to bondholders who had received regulated advice from the collapsed fund.

The FSCS said it had paid 56.7 million pounds in compensation so far, and these payments would not be affected by the court decision.

"We are continuing to look at LCF claims for misleading advice on a case-by-case basis and we'll write to bondholders individually if we can pay compensation," the FSCS said in a statement.

Donegan said Monday's ruling related to about 60% of the LCF funds.