A financial adviser who took Tenet to court over fees has won his battle but now faces an appeal by the network.
Paul Morris, of Sheffield-based Metro Financial Solutions, took Tenet to court over its claims he owed it £2,657.30.
The network had claimed Mr Morris was an appointed representative during the period when it pays its fees, and that therefore he is liable to pay up for the year 2017 to 2018 despite the fact he had left Tenet the previous year.
In a hearing in April, Judge Brain found in favour of Mr Morris, ruling a clause of Tenet’s terms of service was unreasonable under the Unfair Contract Terms Act 1977.
This meant Tenet was not contractually entitled to deduct the money from the amount it had paid to Mr Morris.
The judge awarded Mr Morris the full sum plus 3 per cent interest and told Tenet to pay the court fees of £285.
But now Tenet has appealed the decision, which will be heard at Sheffield County Court on Friday 10 November.
In its grounds of appeal, Tenet said the legislation used by the judge to find in favour of Mr Morris does not apply to that clause of its terms of service.
It has argued the charging and payment structure was not “imbalanced” and that Mr Morris had the opportunity to contract with other regulated entities and seek legal advice.
As part of the case, Mr Morris disputed whether a memo issued by Tenet in August 2013 amounted to a permanent change to his contract.
The memo stated that following a review to its charging methodology, Tenet would be charging fees for 2014 to 2015 to any firm registered with the company as of 30 September 2013 based on their income profile.
Mr Morris left Tenet on 30 September 2016 after 15 years because it coincided with the renewal of his professional indemnity insurance.
In his witness statement at the time of his court case Mr Morris said: “I had no problem with what they did in those years since one way or another I would have had to pay my contribution to the FCA annual levy for the years I was part of the Tenet network.
"Indeed Tenet have charged me the full year for 2016 to 2017 but I have no problem with that since it was my decision to leave part way through the year.
“What I do have a problem with is that they are unilaterally attempting to make me contribute to their annual levy for 2017 to 2018 being a period long after I have left their network and when I pay my own annual levy direct to the FCA.
“This is wholly wrong. The memo was not a permanent change to the terms of service.”
However Tenet responded to Mr Morris’s concerns by saying that fees are paid based on Tenet’s prior full financial year and that the FCA needed all data by 28 February.
A spokesman for Tenet said: “The decision on the claim is subject to an appeal and therefore we cannot comment any further on this matter.”
Martin Stewart, founder at advice firm London Money, who said he is seeing the same in the mortgage sector, in which he specialises.
"People want to leave their networks but only then realise how restrictive the contracts are.
"I saw one contract and the network was going to keep all the adviser's pipeline, which came to nearly £30,000. I think it is an industry wide issue."
damian.fantato@ft.com
