Mr Adam’s long running legal battle with Carey Pensions appears to be over thanks to a very clear decision from the Court of Appeal upholding his claim for losses arising out of his transfer into Carey’s self-invested personal pension (‘SIPP’).
This landmark decision has significant implications for the SIPP industry and should give hope to the thousands of others pursing similar claims.
What was the case about?
The case arose following Mr Adams transferring his personal pension with Friends Life into a SIPP administered by Carey in 2012 who then, on his instruction, used £52,500 of the pension fund to purchase leasehold self-storage units, owned and operated by Store First Limited (“Store Pods”).
Mr Adam’s evidence was that he has been persuaded to follow advice and guidance to transfer his pension and invest in Store Pods by CLP Brokers Socieded Limitada (‘CLP’) a firm that operated from premises in Spain.
The investment was not successful. The rental units did not generate any significant income and evidence presented at trial suggested that the units were worth a fraction of what had been paid for them.
Mr Adams brought a claim against Carey Pensions (now known as Options SIPP UK LLP) seeking to hold them liable for the loss to his pension fund within the SIPP.
It was Mr Adam’s case that he had agreed to transfer his pension to the Carey SIPP in consequence of things said and done by CLP in contravention of what is known as the ‘general prohibition’ imposed by section 19 of the Financial Services and Markets Act 2000 (‘FSMA’).
Section 19 bars anyone but a person authorised by the Financial Conduct Authority (‘FCA’) from carrying on specified activities. Section 27 renders agreements entered in consequence of something said or done by a third party in contravention of the general prohibition unenforceable.
Mr Adams alleged that CLP had breached the general prohibition by carrying on activities specified in articles 25 and 53 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (“the RAO”). Articles 25 and 53 are respectively concerned, with “Arranging deals in investments” and “Advising on investments”.