Adviser advocate fights back against network PI claims

Gwynedd-based Evan Owen, former chairman of the IFA Defence Union, said he had been contacted by many former appointed reps of Positive Solutions, Tenet and the Lighthouse Group, who said they were being chased for “money they did not owe”.

In some cases, the letters from their networks claim individuals owe varying sums over Keydata policies sold before 2009.

Other letters state that networks have been “negotiating” with their PI insurers to bring the total excess down, before informing the individuals of the specific amount they owe.

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However, Mr Owen said he has been seeking the advice of a barrister, as he believes in many cases there is nothing in advisers’ contracts to suggest they are individually liable for advice on Keydata given while they were appointed reps of the networks.

He claimed some advisers had asked him whether they should just settle up to avoid any “hassle” but he thinks there is a strong case against the networks.

Mr Owen claims the networks themselves are responsible under FCA Supervision 12, which states: “The firm is responsible, to the same extent as if it had expressly permitted it, for anything the AR does or omits to do, in carrying on the business for which the firm has accepted responsibility.”

One former Positive Solutions adviser, known to Financial Adviser, said: “I did sell some Keydata during 2005 and 2006, but this was after a presentation to Positive Solutions advisers.

“I do not think Positive Solutions should be chasing me for PI excess, especially since this was so long ago.”

Wallace Dobbin, Intrinsic’s legal and governance director, said: “We can confirm that Positive Solutions has settled all of its Keydata liabilities with the FSCS on terms which remain confidential. As a consequence, Positive Solutions has been in correspondence with relevant partners in line with its usual business practice and contractual terms.”

Martin Greenwood, executive chairman of Tenet, said: “We do not comment on individual cases. However, we would underline that the continuing contractual obligations of an AR of the Tenet Group are set out in the agreement freely entered into by both parties.”

A spokesman for The Lighthouse Group said: “Lighthouse never comments on confidential matters between the group and its adviser.”

Last September, The Lighthouse Group’s accounts stated it had seen operating costs increase by £0.9m to £7.46m, as a result of extra investment as well as “higher professional indemnity insurance costs.”