Embattled SIPP provider, Berkeley Burke, has been the focus of a landmark pension mis-selling legal case for the past few years. This followed a Financial Ombudsman Service (FOS) ruling that the firm did not carry out appropriate due diligence on client Wayne Charlton’s investment.
Mr. Charlton lost part of his hard-earned pension pot to unregulated “green oil” investment, Sustainable ArgoEnergy. The scheme dealt with agricultural land leases in Cambodia, on which trees would be grown for biofuel.
2011 – Sustainable green energy scheme investment
Mr. Charlton was approached by a third party which advised him to invest £29,000 of his pension pot into a Sustainable Energy green oil scheme in Cambodia.
Unfortunately, the green oil scheme turned out to be a scam, and it came to light that more than 600 people had invested £12,250,000 in total into the fraudulent scheme.
2012 – Berkeley Burke investigated by the Serious Fraud Office
Mr. Charlton began the complaints process to the FOS seeking the return of his money.
Sustainable Energy was investigated by the Serious Fraud Office (SFO) and went into administration as a result of the overall situation.
2014 – FOS ruling and subsequent appeal
The FOS upheld Mr. Charlton’s claim, and it was ruled that Berkeley Burke should compensate the client as a result of its failure to carry out “appropriate due diligence”. Berkeley Burke decided to appeal this decision.
October 2018 – Berkeley Burke loses judicial review
In October 2018, Berkeley Burke lost its judicial review in a landmark High Court ruling. This meant that the FOS’s ruling stood.
Berkeley Burke argued that it had carried out the adequate due diligence required at the time. It said that the FOS had retrospectively applied a tighter duty of care to investigate a separate investment that was made in 2011, before adding them into a Sipp. It also claimed that the decision was inconsistent with previous decisions made by the ombudsman.
February 2019 – Berkeley Burke granted permission to appeal
Just a few months later, Lord Justice Hickinbottom of the Court of Appeal granted Berkeley Burke permission to appeal against the FOS. He claimed that the decision had “considerable and wider importance within the industry and for customers.”
August 2019 – Libertatem seeks donations for Berkeley Burke’s appeal
In August, it was revealed that a court order had directed Berkeley Burke to pay almost £1m in compensation to the client who had lost money. It was an interim payment to cover legal costs. This was following Berkeley Burke’s decision not to defend group litigation.
It was also reported that industry trade body, Libertatem, was seeking donations from other advisers to help Berkeley Burke’s appeal case against the FOS. According to an article by the FTAdviser, the group is helping to “form the provider’s legal case as well as seeking tens of thousands of pounds in donations from advisers and other Sipp providers.”
October 2019 – Appeal streamed live on YouTube
The industry has been eagerly awaiting the outcome of Berkeley Burke’s latest appeal following the initial unsuccessful judicial review. The High Court’s decision is now due to be heard on 15th and 16th October 2019. It will be streamed live on the internet via YouTube.
Many mis-selling cases were put on hold until the FOS came to a decision on the original case. This is because of the wider implications of the outcome within the industry.
Our clients are suffering due to this ongoing case. We are hoping that the right decision is made in October.
APJ believes that the original decision was founded on legal precedent. We expect the Court of Appeal to support the FOS decision. As a result, this will open the door for further complaints.
Do you think you may have been mis-sold a SIPP by Berkeley Burke or another provider? Get in touch to see how we can help.