At least 77 investors have jumped the first hurdle in their fight against self-invested personal pension (Sipp) provider Berkeley Burke, in what could mark the beginning of a new wave of claims against the firm.
In a judgment handed down earlier this month, Judge Russen said he was minded to allow a group action to be brought against the firm with respect to claims of mis-selling and would write to the president of the Queen’s Bench Division to make the application in accordance with group litigation rules.
The action would allow several groups of investors to come together and pursue Berkeley Burke for damages in relation to high risk investments in Sipps they claim were mis-sold to them.
The investors allege the pensions were sold through nine separate introducers, and were invested into single-asset high risk investments ranging from forestry in Australia, residential property in Arkansas and a holiday apartment in Grenada.
They claim the introducers carried out regulated activities without the relevant permissions, ie giving advice to transfer into the Sipp.
They also allege the Sipp firm was acting in a ‘joint enterprise’ with the introducers.
The investments made by the existing claimants range from approximately £6,000 to £160,000, the judge stated.
Berkeley Burke denied all allegations at the hearing held on 15 November 2017.
It said each Sipp had been established on an execution-only basis therefore it had had no obligation to assess suitability or appropriateness and that it had been required to act in accordance with a specific instruction by the client to invest.
The judge said the group of 77 could be joined by a further 66 investors, who had already signalled they wanted to join the action but there could be as many as 200 claimants in total, “and quite possibly considerably more”.
Berkeley Burke is already fighting a legal battle over a decision by the Financial Ombudsman Service from 2014 concerning an investment in Sustainable AgroEnergy PLC, which entered receivership in 2012 following intervention by the Serious Fraud Office as part of a criminal investigation.
In October a High Court judge blocked an arbitration appeal process to overturn the ombudsman's decision that it would have to compensate a Sipp client, meaning the case may now go to judicial review.
carmen.reichman@ft.com
