Self-invested personal pension specialists have cast doubt on Liberty Sipp's reliance on the Carey outcome to invalidate any outstanding claims against the provider.
Martin Tilley, director at Hurley Partners, and Richard Mattison, director at Whitehall Group, said although the outcome of the Adams v Carey Pensions case may affect future claims against Sipp providers, it was “highly unlikely” it will have a direct impact on Liberty Sipps’ outstanding claims as the circumstances differ.
In a statement on Companies House, the administrators of Liberty Sipp said the company was unlikely to be saved due to the extent of possible creditor claims.
But, the statement added if contingent claims were deemed to be invalid, then “following the decision in Adams v Carey Pensions (pending any appeal) and subject to the FSCS decision on update policies following these decision”, Liberty Sipp may be able to repay all the creditors in full.
However, Mr Tilley said this would depend on the nature of the claims as the circumstances are likely to be different and therefore the judgment will have little impact.
He said: “The Carey case has figuratively put a spanner in the works and may have the effect of paralysing future claims determinations. As said, those undetermined claims with similar features may now be found in favour of the Sipp provider.
“Those that have gone previously and been determined are unlikely to be changed and certainly won’t be unless any appeal fails and we could be months/years away from that.
"We have to drill down and look at the claims in detail. For example, the Carey case was specific in that an asset was acquired, whereas I understand Liberty held a degree of Sustainable Green agroEnergy which was a scam and for which monies should not have been released.
“If Liberty for example have a book of these, whatever happens in the Carey judgement will have little impact.”
There is also the problem that the Carey case could be subject to an appeal in which the current judgment could be overturned.
Mr Tilley added: “The Carey case may be a glimmer of hope for the Sipp providers in trouble, but until we see whether or not an appeal is made and is successful and where we have a material change in approach from Fos and latterly the FSCS it’s probably too early to tell.”
Whitehall Group's Mr Mattison agreed that it was “unlikely” Liberty Sipp’s claims would be found invalid purely on the back of this judgment.
He also noted that even though Carey won this case, it has recently lost a number of Fos decisions.
It is likely the Liberty Sipp situation is more akin to these and “the administrators' only options will be to put the company in liquidation”, according to Mr Mattison.
He added: “I expect the regulators to basically ignore the Adams case and consider it to be a one-off whilst continuing their policy of reaching decisions against Sipp providers.