A group of investors who allege they received negligent financial advice will be able to bring their case to a UK court after the Court of Appeal overturned a previous ruling.
In 2014, 62 people invested £10mn in employer pensions, many of which were defined benefit schemes, to investment funds administered by Castle Trust Management Services, which is based in Gibraltar.
The funds were placed into Qualifying Recognised Overseas Pension Schemes established in Gibraltar, and the investors say they were then given advice to place their savings into unregulated collective investment schemes.
These were highly speculative, illiquid investment schemes that carried a significant risk of loss, according to High Street Solicitors.
The group previously lost a High Court case which ruled they should have brought their case against Castle Trust & Management Services in Gibraltar, where the company is based.
Late last year, the Court of Appeal overturned this decision, saying the courts of England and Wales did have jurisdiction to hear the claim.
Castle Trust Management Services has until January 25 to file its defence.
The losses
The full amount lost still needs to be confirmed by an actuary.
High Street Solicitors said it was a minimum of £10.2mn, which was the total amount transferred from the pension schemes into the funds.
James Holloway, a claimant who transferred £211,443 out of the DS Smith Group pension scheme, said: “Eight years ago, I transferred my pension to Castle Trust Management only to be paid £2,800 and told that my investment into Elysian Fuels was worthless.
“I was devastated and sank into depression.
“I have now been given a lifeline to pursue a claim...it has been an incredibly long journey and I’m really hopeful for a resolution and to have some closure from this deeply distressing time.”
Sarah Kearney, director at High Street Solicitors, said the Court of Appeal’s decision is an “incredibly significant” development in this case.
“We are determined to hold these companies to account on behalf of our 62 claimants who deserve to be compensated for the losses of their pensions that they’d worked hard for for many years, as well as the loss of the potential interest that could’ve been made had they been invested into suitable pension schemes.”
The transfers
Each of the claimants joined either one or both Qrops as members and transferred their existing UK pensions into these schemes.
There are two types of claimants, those who were advised in respect of a handful of unregulated collective schemes (Ucis Claimants) and those known as "Elysian claimants" who were advised in respect of a single investment of that name.
Some claimants fell into both categories.
During the High Court case, the barrister acting on behalf on the claimants, Gerard McMeel, instructed by High Street Solicitors, said the Qrops were an "inappropriate pension vehicle for UK-domiciled investors" and that in many cases the investors' accounts were now in debit.
sally.hickey@ft.com
