The claimants who took the Sense Network to court over an alleged secret £12.8m "Ponzi scheme" run by one of its appointed representatives have been given leave to appeal their case.
Last month Mr Justice Jacobs ruled in favour of Sense and against the 95 claimants who were clients of Alistair Greig, who owned and ran Midas Financial Solutions (Scotland) Ltd (MFSS).
The claimants alleged Sense was liable for their losses but Mr Justice Jacobs disagreed in a ruling which came just months after Tenet was found liable for the unregulated activities of one of its appointed representatives.
Robert Morfee, the lawyer at Cubism Law who represented the claimants, said they have now been given leave to appeal on two grounds but he was looking to apply to the Court of Appeal to enlarge the scope to cover more grounds.
He said: "The first ground we have been given leave to appeal on is whether Sense have to take responsibility for what Midas was doing as its appointed representative. The second ground was vicarious liability: does Sense have to take responsibility for what Midas' people did because they were agents of Sense in common law.
"The judge said we had no prospect of success for the other seven grounds but we think that at least a couple of those do have really good chances and we intend to apply to the Court of Appeal."
Mr Morfee said some of the claimants were quite elderly, and several have died since proceedings began, so he would be asking the Court of Appeal for a swift hearing.
In explaining why he made the opposite ruling to the Tenet case, Mr Justice Jacobs had said it was because the situation with Sense was the reverse.
He said the Tenet case had involved an adviser - convicted fraudster Alok Dhanda - providing regulated advice to disinvest from one product and invest in an unregulated one, whereas in this case no regulated advice was provided.
But Mr Morfee has argued that if the ruling was allowed to stand it would mean clients who are advised by an appointed representative will not have the same protections as those who go to an IFA because clients would be hampered by the contract between the adviser and their network, which clients are not party to or able to influence.
MFSS was a financial advice business based in Aberdeen.
The scheme it operated was a continuation of one which Mr Greig had operated when he had previously worked for a firm known as Park Row Associates Ltd.
It continued after Mr Greig founded MFSS in 2006 and after September 2007, when MFSS became an appointed representative of Sense.
As part of the scheme investors, most of whom were resident in Scotland and in particular in the Aberdeen area, were offered the opportunity to receive high guaranteed interest rates on short-term deposits.
According to Mr Justice Jacobs's ruling, when the deposit reached maturity the investors would receive or be credited with interest but in reality the interest that was paid, and any capital returned, was not the product of successful investment but came from funds subscribed by participants in the scheme.
But in August 2014 the whistle on the scheme was blown by Keith Ingram, an employee of and financial adviser at MFSS, who provided information about the scheme to Sense.
Mr Ingram's information led to a raid on MFSS's offices by the Financial Conduct Authority and the police.
At the time of the enforcement action there was about £379,000 in the firm's account but some 279 members of the public had invested £12.8m and were owed £13.6m upon the maturity of their investments.
damian.fantato@ft.com
