Options SIPP said it was pleased at the judgment published today by the High Court with Mr Adams’ three claims against Carey being dismissed.
The case, much awaited by the SIPPs sector, means it is now unlikely the floodgates will be opened to similar claims.
Mr Adams brought the court case in 2018 by claiming that Carey was liable for losses on investments made in his SIPP even though Carey had not advised on the investments.
The judgment was given by the High Court this morning.
The case itself was heard in March 2018 and related to the liability Carey had for storage investments selected by Mr Adams.
Carey said Mr Adams was introduced by an unregulated introducer and transferred an existing pension fund into a SIPP administered by Carey.
He then instructed that his SIPP be used to purchase a number of rental units from Store First.
Carey carried out the transaction on an execution-only basis as a pensions administrator.
However Mr Adams’ investment in Store First did not perform as he had expected and he brought a claim against Carey seeking damages for his losses.
Christine Hallett, managing director of Carey, said: “We acknowledge this isn’t the outcome the client was looking for, we do have sympathy for his situation and the fact that as a result of his decisions the investments he chose and instructed us to invest in have lost value. That said, we are pleased that the judgment has now been delivered and that the judge has found in our favour on all counts.
“It has been a long time coming and whilst we were confident of our position, the lengthy, comprehensive and detailed judgment recognises within it our approach to implementing strong contractual agreements and documentation, together with robust systems, controls and processes within the business. It was also clear that as a SIPP provider we are expected to carry out execution-only business based on decisions made by our clients.
“It is a judgment that has been long awaited by the SIPP industry and consumers alike, and gives clarity to what is expected of a SIPP provider under English law and the FCA Conduct of Business Principles when acting upon the instructions of a client. In addition, it has given a much better understanding of the legal relationship between an introducer and the service provider which will provide valuable guidance for both consumers and industry professionals.
“We now look forward to continuing to build our UK businesses with our new name Options “for your tomorrow”, new brand positioning and product portfolio along with maintaining our high service levels for all our clients.”
Alan Kentish, chief executive of STM Group which now owns Carey Pensions, said: “The judgment is a very welcome and clear precedent for the whole of the UK financial services sector given the increased litigation and use of the Financial Ombudsman to determine complaints. This judgment gives a solid legal footing for these to now be considered in the context of this ruling.
“The potential implications for any financial institution carrying out execution only business to have become responsible for their client’s decisions would be, in my opinion, wholly inequitable and inappropriate. I am sure many financial service providers and institutions, as well as their respective trade associations, would wholeheartedly agree and can now look to the future with greater confidence post this ruling.”
“STM is keen to put this case behind it and ensure its UK business, Options for your tomorrow, realises its full potential.”
• Law firm Eversheds represented Carey and its views on the judgement can be found here: https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Financial-services-and-dispute-investigation/Clarity_for_SIPP_providers.