Investors in the former Woodford Equity Income fund are able to submit claim forms until 4 December, with the scheme meeting and vote due to take place on 13 December.
Hundreds of investors call for probe into FCA's handling of Woodford saga - reports
The scheme, put forward by Link Fund Solutions and backed by the Financial Conduct Authority, proposes to return 77p in the pound to investors, for a maximum total redress of £235m. However, this calculation is disputed by Harcus Parker.
The law firm representing a class action law suit of investors argued the proposed redress would only offer investors 6p per share, suggesting the total amount lost by investors totalled more than £1bn.
It suggested that by pursuing a legal claim and utilising the Financial Services Compensation Scheme, investors could potentially receive nearer 50p per share, based on the more than £1bn calculation.
The law firm has already written to the 7,500 clients it represents, who are trapped in the former Woodford Equity Income fund, to advocate against the redress scheme.
Damon Parker, partner at Harcus Parker, said the law firm wanted investors to know the "full facts" before casting their votes and to ensure they could make an informed decision.
He explained: "It is our view that the information supplied by Link and the Financial Conduct Authority has not been written in a way that easily reveals its meaning. And we struggle to understand how they reach some of their calculations.
"We strongly believe that this a bad deal for the investors and that the financial institutions that should be there to support them are letting them down again by not fully and fairly explaining the scheme and its consequences. If people hear what we say and decide to vote in favour of the scheme then that is fine, so long as they fully understand the issues."
The law firm said investors may be able to claim "all of their money back" from the FSCS, if the lifeboat scheme was to honour the claims.
Registration to vote on Link Fund Solutions' Woodford scheme of arrangement opens
It added that, by voting in favour of the scheme, investors would also agree to stop the ongoing litigation. Harcus Parker explained that if investors vote down the deal, they could go to trial and win "an award of compensation that Link is unable to meet", leading to the company likely becoming insolvent, which would bring the potential of FSCS compensation "into play".
The FSCS provides compensation to investors who suffered losses as a result of institutional failings from regulated firms or regulated activities, and can award up to £85,000 per person.
Harcus Parker also highlighted the FCA has already found "critical errors and mistakes" in LFS' role overseeing the former WEIF, which supports its claim the FSCS would likely become available to investors.
A spokesperson for the Transparency Task Force, which has been holding seminars for investors alongside the law firm, said: "We are grateful to Harcus Parker and Damon Parker for taking the time out to talk to our members.
"There is a huge principle at stake here which is that the FCA's and Link's scheme makes a mockery of consumer protection. Investors are being very ill-served by an opaque and ungenerous scheme which has the effect of protecting institutions at investors' expense.'"
An FCA spokesperson told Investment Week: "The proposed redress reflects the loss caused by LFS' failure to comply the FCA's Principles. It does not, nor is it intended to, reflect any losses caused by a deterioration in the performance of the underlying investments in the fund.
"As we have made clear, this redress scheme offers the quickest route for redress for the vast majority of people. Payouts through other means, such as litigation or the FSCS, are not guaranteed and will likely take longer to achieve. We firmly believe that what is being offered by Link warrants serious consideration by investors."