Today, the Berkeley Burke case was dismissed in the High Court. Progress can now be made for our clients who are seeking compensation for mis-sold investments.
Our thoughts on Berkeley Burke
Our expert Glyn Taylor said: “We welcome the judgement as a sensible decision. It gives clarification on the law with regard to the level of due diligence required of Sipp Operators.
“The judgement has now clarified that the concept of due diligence inevitably brings to mind the concept of inquiry or investigation. They are not distinct concepts.
“It is clear from this judgement that due diligence should have been performed pre-2013.
“While there may be an argument as to the extent of inquiry or investigation, this is a matter following the application of the facts when considering what is fair and reasonable. A red flag was raised because an unregulated illiquid high-risk asset was identified. It is a matter for the Financial Ombudsman to decide on whether a sufficient level of due diligence was carried out, based on the facts as to what is fair and reasonable as to the extent of the inquiries the Sipp Operator should take to avoid consumer detriment.
“In the Adams v Carey Pensions case, the FCA made written representations that there is a duty on a Sipp Operator not to accept into a Sipp an investment of a kind that is inappropriate for any Sipp investment. Therefore accepting a highly speculative and or risky and or illiquid assets is not consistent with the purpose of a Sipp which is to provide a pension at retirement.
“We believe that the Ombudsman should consider factors such as the volume of business being accepted from an introducer, clients electing to waive cancellation rights, and the level of risk of the investments, as any high risk investment would be unsuitable for a retail investor.”
If you have invested in a Sipp you believe was mis-sold, get in touch. Our team of experts can offer advice and support.