The industry may finally get long-awaited clarity on which part in the supply chain is liable for high-risk investments in self-invested personal pensions.
According to Stephen McPhillips, technical sales director at Dentons Pension Management, time will tell whether the industry can draw conclusions from the Carey judgment, which should come to a close this year.
Mr McPhillips said: “The judge dismissed all three of the causes of action brought by [the client] Mr Adams, but industry commentators have urged caution about any broad conclusions being drawn from the judgment; the case was fought on three very specific points relating to the circumstances of it, and may have had a different outcome had things been different.
“Once again, time will tell on this one because an appeal is scheduled to be heard during March 2021.”
In May, Carey, now known as Options Pensions, won the case brought by its client Russell Adams after a High Court judge ruled that the provider, which was explicitly acting on an execution-only basis, was not liable for his decision to invest in a high-risk investment that later failed.
Mr Adams alleged that Carey Pensions had 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 not have been allowed to open the Sipp without advice.
But the High Court threw out all of Mr Adams’ claims.
Tim Hampson, partner at Wixted & Co Solicitors, who represents Mr Adams, previously told FTAdviser that the judgment had approached the case from “all the wrong angles” and placed “too much emphasis” on the documents produced by Options rather than properly considering the statutory framework.
Mr Hampson said: “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.”
He is now hopeful that this year’s appeal will “bring some real clarity” to the issues.
Meanwhile, Options believes the original judgement was detailed and well considered and will continue to be upheld following the appeal.
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