Berkeley Burke’s appeal against a High Court decision in its long standing battle against the Financial Ombudsman Service (Fos) is due to be heard in October and will be streamed on the internet.
Berkeley Burke is fighting a decision from 2014, in which the Fos ruled the self-invested personal pension (Sipp) provider had to compensate a client after it failed to carry out adviser-style due diligence on his investment.
In October 2018 Berkeley Burke lost a High Court case meaning the ombudsman's ruling stood, but in February 2019 Lord Justice Hickinbottom of the Court of Appeal granted Berkeley Burke permission to appeal the ruling, claiming the decision was potentially one of "considerable and wider importance within the industry and for customers."
FTAdviser understands that a two-day appeal hearing is scheduled to begin on October 15, 2019 and will be live streamed on the court's Youtube channel, a service that began in November 2018 to improve public access to the courts.
The case could have wider ramifications for the industry as it centres on the question of liability a Sipp provider has when accepting business.
The original Fos decision ordered Berkeley Burke to repay Wayne Charlton after he lost part of his pension to unregulated investment Sustainable AgroEnergy, which had promised returns of between 8 and 9 per cent.
The company purported to provide agricultural land leases in Cambodia, where they would grow jatropha trees for biofuel.
But in 2012 the company was investigated by the Serious Fraud Office and went into administration.
In the High Court ruling against Berkeley Burke in October, Mr Justice Jacobs listed four instances when he felt a Sipp operator should intervene;
1) when the proposed investment is not eligible for the tax benefits of being put in a Sipp.
2) when the rules on what can be put into a Sipp change.
3) when the provider receives information which casts doubt on the integrity of those promoting the investment.
4) when the Sipp provider has learnt of problems, such as a possible insolvency, which affect the proposed investment.
But Berkeley Burke at the time maintained the ombudsman "erred in law" applying the FCA principles in a way that created a "new and unexpected duty of care" on the part of Sipp operators to investigate investments before accepting them into a Sipp.
Since then the Financial Ombudsman Service has held more and more Sipp providers accountable for accepting unregulated investments into their books that later failed.
Earlier this month, FTAdviser reported that adviser trade body Libertatem is seeking donations from advisers to help towards the cost of Berkeley Burke’s appeal case.
The group is helping to form the provider’s legal case as well as seeking tens of thousands of pounds in donations from advisers and other Sipp providers.
Garry Heath, director general at Libertatem, said it was in advisers’ best interests to put their support behind this case as if the Fos wins, the precedence set could be used against advisers in the future.
But he also disclosed that Libertatem offered to help because Berkeley Burke’s IFA arm is a member of the trade body.
amy.austin@ft.com
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