CompaniesFeb 17 2012

Towry loss to spell end for two other High Court claims

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Raymond James has said its victory against Towry in its recent suit over poaching of clients will kill-off several others claims that it says are being brought by intermediaries in the High Court over alleged client solicitation, which had been awaiting for the outcome case before proceeding.

On Tuesday (14 February), Towry lost its court case against Raymond James and its seven ex-Edward Jones advisers, in which it was seeking almost £6m in damages.

A judgement from Mrs Justice Cox at the Royal Courts of Justice found in favour of Raymond James and the seven, after Towry alleged the former Edward Jones advisers had solicited clients to leave Towry following its takeover of their former firm in 2009.

A spokesman for Raymond James claimed the rejection of Towry’s bid for damages was likely to put other companies of pursuing their former advisers in this way.

He said: “This court case was so important that several other similar claims in the High Court have been awaiting for the outcomes before proceeding. They are now unlikely to go ahead because of the precedent set here.”

In her judgement, Justice Cox said: “Having regards to the whole evidence in this case, the allegations against Raymond James do not withstand scrutiny.

“In my judgement the allegation of conspiracy as between the individual defendants or some of them was wholly unsustainable in the evidence in this case.”

Raymond James has also stated that the case raises questions over the use of non-dealing clauses in relation to the regulator’s Treating Customers Fairly rules. The firm has intimated that it would support standard guidance on the use of such clauses across the industry.

On Thursday (16 February), Aifa rejected such a call, telling FTAdviser sister title Investment Adviser that an industry code of conduct on client ‘poaching’ would have to be voluntary and would likely “not work”.

Chris Hannant, policy director at Aifa, said: “We don’t want to see further regulation of the industry. I’m struggling to see what real value it would add other than to burden advisers with more to think about if they have the code of conduct.”

Towry’s chief executive Andrew Fisher said after the judgement that while he was “disappointed” his case had been dismissed by the Royal Courts of Justice, he felt the judgment would be instructive for firms wishing to protect their legitimate business interests.

Mr Fisher said: “The judgment does support the efforts of professional services firms like ours, to protect their legitimate business interests, through contractual non-solicitation, non-dealing and confidentiality clauses.”