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14 June 2022 | Comment | Article by James Coleman

Options Pensions set aside £21.4m for enforcing Ombudsman decisions

The parent company of Options Pensions (formally Carey Pensions UK LLP) has recently confirmed that they will be setting aside £21.4m in a fund to deal with complaints being upheld against it by the Financial Ombudsman Service (“FOS”).

This announcement follows the decision of the Supreme Court in March 20022 to reject Option’s application to appeal the landmark decision of the Court of Appeal in Adams v Options UK Personal Pensions LLP which held Options liable for Mr Adam’s losses in relation to a self-invested personal pension (‘SIPP’).

Mr Adam’s case against Options was in effect a test case and established that a SIPP operation could be liable in what is referred to as a ‘Section 27 claim’.

A ‘Section 27 claim’ in this context relates to Section 27 of the Financial Services and Markets Act. In Adams it was found that Mr Adams entered into an agreement with Options Pensions to transfer his pension and make investments, which subsequently failed, in consequence of something said or done by an unauthorised third-party. The Court of Appeal was satisfied that this involvement of an unregulated party made the transfer unenforceable, and Mr Adams was able to recover the losses his pension had suffered as a result.

We are aware that there are a number of complaints relating to similar cases open with the FOS against Options Pensions and the £21.4m fund has been set aside to deal with them with. The parent company of Options Pensions has confirmed that they have “significant” professional indemnity protection which allows them to set up such a fund without impacting the rest of its business.

Hugh James is now representing individuals who have already received final and binding decisions from the FOS to pay compensation to take enforcement action through the Courts on a ‘no win no-fee’ basis.

Sadly, despite the Supreme Court decision there appear to be significant delays in compensation calculations being provided and paid. This is particularly affecting individuals who would otherwise be able to draw their pensions but are having to wait for their SIPP accounts to be credited with the compensation due.

Where a firm like Options fails to comply with a final decision from the FOS, in the first instance the FOS will try to contact the respondent and identify the reason for the non-compliance. If this does not result in the respondent complying with the decision, the only remaining option is for the complainant to enforce the decision through the courts. The court enforcement procedure relating to FOS decisions is rarely used and not widely understood. There are cost risks involved in bringing legal action and time limits for bringing cases so it is worthwhile considering taking specialist legal advice.

If you have received a final and binding decision from the FOS relating to a complaint against Options Pensions or any other SIPP provider, our Financial Mis-Selling team may be able to help you through the enforcement process.

Please contact us on 029 2267 5700 or by email to [email protected] for a free, no obligation discussion with one of our team. Contact us now to speak to one of our experts for help with your query

Author bio

He is currently a member of the Financial Mis-Selling team where he specialises in recovering compensation relating to property investment scams, pensions, mortgages and other financial products.

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