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Court allows appeal against Carey in landmark Sipp case

Court allows appeal against Carey in landmark Sipp case

The Court of Appeal has granted Russell Adams permission to appeal in the long-running case against self-invested personal pension provider Carey Pensions.

Lord Justice Arnold allowed the appeal on the grounds that Mr Adams had a "real prospect of success”.

He found that the importance of the issues raised and the delay of two years in producing the first judgment also amounted to compelling reasons for the grant of permission.

The case is expected to be heard at the Court of Appeal in early 2021.

In May, Carey, now known as Options Pensions, won the case after a High Court judge ruled that the provider, which was explicitly acting on an execution-only basis, was not liable for a member’s choice to invest in a high-risk investment.

Russell Adams alleged that Carey Pensions mis-sold him a Sipp. He and his lawyers accused the Sipp provider of using a Spain-based unregulated introducer to facilitate investments in Store First unit pods which were unsuitable and are now deemed "worthless".

His lawyers argued regulatory principles around treating customers fairly meant he should have not been allowed to open the Sipp without advice.

But the High Court threw out all of Mr Adams’ claims.

The Court of Appeal will now reconsider the scope of the duties owed by Sipp operators purporting to act on an execution-only basis, as well as the true statutory construction of section 27 of the Financial Services and Markets Act 2000.

The appeal will happen quickly because of the historic delays.

Tim Hampson, partner at Wixted & Co Solicitors, who represents Mr Adams, said: "We always considered that the original judgment approached the case from all the wrong angles, placing too much emphasis on the ‘paper-trail' of standard form documents produced by Options and not properly considering the primacy of the statutory framework. 

"That framework has specially been put in place by parliament in order to protect consumers such as Mr Adams from the exact circumstances he found himself in. 

“Mr Adams is naturally very pleased with the outcome of his application for permission to appeal, we now look forward to the Court of Appeal considering the case early next year and bringing some real clarity to the issues."

Gerard McMeel QC, barrister at Quadrant Chambers who is Mr Adams’ lead advocate said: “The Court of Appeal now has the opportunity of determining what professional standards are required of those entrusted with pension assets, and what are the consequences for those Sipp providers who took the risk if dealing with unauthorised intermediaries.”

Christine Hallett, managing director of Options, said: “From Options’ point of view, the decision to grant permission for the appeal is disappointing.

"The original judgement was detailed and well considered, so we strongly believe that it was the correct decision and will be upheld following the appeal."

amy.austin@ft.com

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