Glyn Taylor, a solicitor at Anthony Philip James & Co (APJ), which is bringing a number of claims against Sipp providers for alleged mis-selling, said the case was not ideal for testing the argument that Sipp providers can be liable for losses from taking execution-only business.
This was because the client had been intent on making the investment and the court may find it was just for Carey to establish the Sipp.
If the case is lost, it will therefore not act as a precedent for others where the underlying facts are slightly different, he said.
The Russell Adams versus Carey hearing centres on a claim from a client who invested his £60,000 pension in illiquid commercial property.
He is accusing Carey of colluding with unregulated introducers to facilitate investments which were unsuitable and are now deemed "worthless".
The client had signed an execution-only contract but his lawyers argued regulatory principles around treating customers fairly meant he should have never been allowed to open the Sipp without advice.
The case, which was heard in March and will act as a test case for about 90 more clients with liabilities of £3m, is currently awaiting judgement.
Mr Taylor said: "In this case, there is evidence that the client was intent on making the investment and would have done so regardless of any advice given.
"It is quite common for the unregulated introducer to offer a cash incentive to the client to invest in a non-standard asset. This happened in the Adams vs Carey Pensions case.
"Therefore, the court could decide that the claimant would have proceeded with the investment in any event due to the cash incentive.
"As a result, I believe that while the judge may find that Carey Pensions did breach its duty to the client, as the client was intent on proceeding with the investment the judge could find that it was just and equitable for Carey Pensions to enforce the Sipp.
"This means that we can’t take a clear steer from the case as to whether other cases against Sipp providers would be successful."
Some in the industry perceived the Carey case as a potential watershed moment in the way Sipp claims are handled, because, if won, it could put liability firmly in the hands of the Sipp provider.
Martin Tilley, director of technical services at Dentons Pension Management, had warned it could lead to scores of providers winding up their operations as they are being pursued for past business written.
Mr Taylor agreed, if found against Carey, the case could have wider ramifications going forward.
But he said the Berkeley Burke Judicial review, heard last week, was potentially more important as it would determine between two levels of due diligence that the Financial Ombudsman Service (Fos) and Financial Conduct Authority (FCA) have said are required of Sipp operators.
Berkeley Burke vs Fos was heard at the Royal Courts of Justice last week and saw the Sipp provider fight a decision from 2014, in which the ombudsman ruled it had to compensate a client after it failed to carry out adviser-style due diligence on his investment.
Mr Taylor said: "The representations made by the FCA in the judicial review make it clear that finalised guidance issued in October 2013 was a reminder of regulatory responsibilities that became a requirement in April 2007."
In its submission to the court the FCA stated acquiring the assets in a Sipp formed part of operating the Sipp and under section 22 of the Financial Services and Markets Act 2000 establishing and operating a Sipp as well as buying and selling securities are regulated activities, therefore Principles two and six apply.
This means Sipp operators must conduct their business with "skill, care and diligence" (Principle two) and "pay due regard to the interests of its customers and treat them fairly" (Principle six).
Furthermore, the FCA stated the idea the client is responsible for their own decisions, for instance in an execution-only setup, is only one of several factors the regulator takes into account when making and applying its rules.
"It cannot be relied on directly as between a firm and a consumer as a ground for either setting out any obligation on, or any limitations on the obligations of firms such as Sipp operators," the FCA stated.
Mr Taylor said: "All firms, regardless of whether they do or do not provide advice must meet Principle 6 and treat customers fairly. Therefore there isn’t a distinction between the level of due diligence required by a Sipp operator to comply with its duties if the investment was pre-2013.
"For this reason the outcome of the judicial review could have a much greater bearing. We would hope that the court finds, in line with the FCA representations, that the same level of due diligence was required pre-2013."
APJ is bringing a number of claims to the courts on behalf of investors who have invested in unregulated products through Sipps, including Berkeley Burke.
Mark Smith, chief operating officer at Sipp provider Mattioli Woods, said he understood Mr Taylor's argument but disagreed with his views on the Carey's potential impact on the market.
He also said the regulatory treatment of clients of Stadia Trustees, which Mattioli was appointed to assist when it was forced to cease accepting new business in 2013, suggested Sipp firms already carried liability in the regulator’s eyes.
The Financial Services Compensation Scheme is currently compensating those clients, who had been approached by the same unregulated introducer.
He said: "The FCA has been very clear in its submission to the court that in their view there is no such thing as an execution only sale. If a firm wants to limit how they do the sales it is a matter for them but it doesn’t stop them from having to comply with the FCA’s COBs and TCF rules."
Martin Tilley, director of technical services at Dentons Pension Management, previously warned a judgement against Carey could have profound effects on the Sipp market and lead to providers winding up their operations as they are being pursued for past business.
He said this was true based on the principles of the case but he agreed with Mr Taylor that unless the exact circumstances of the Carey case are duplicated the decision may not be applicable to similar but not identical subsequent cases.
He said: "If Carey do lose, the findings of the judgement will be crucial in determining if it may be the landmark case that some suggest."
carmen.reichman@ft.com
