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Berkeley Burke update: judicial review set for Autumn

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Berkeley Burke hit the headlines earlier this year. They were accused of “mis-selling” self-invested personal pensions (SIPPs) and hundreds of investors took legal action against them. Clients alleged that they lost money by investing their pension pot with the SIPP provider.

Allegations stated that Berkeley Burke established the SIPP after unregulated third-party firms advised investors to transfer their private or work pension funds to a Berkeley Burke SIPP. This resulted in clients investing their pensions in high-risk schemes. These included self-storage units and foreign property.

Why are people claiming?

Claimants were often promised large returns for investing in a range of high-risk schemes. Many of those investors then witnessed the value of their pensions either plummet or become totally worthless. A significant portion of the claimants invested their whole pension, leaving them with nothing.

A group litigation order against Berkeley Burke, consisting of 77 people, was approved by the High Court. Together, they are claiming a total of more than £3.7 million in compensation.

Berkeley Burke vs FOS

Berkeley Burke have now been engaged in a long-standing battle with the Financial Ombudsman Service (FOS) since 2014. The FOS ruled the SIPP provider had to compensate a client. This is because it failed to carry out adviser-style due diligence on his investment.

Mr Wayne Carlton alleged that he had invested in a SIPP administered by Berkeley Burke, and subsequently lost his personal pension.

Berkeley Burke maintain they did not provide Mr Carlton with any advice. They sought to seek judicial review of the Ombudsman’s decision.

Mr Carlton’s complaint was then reviewed by a different Ombudsman. They agreed with the initial decision.

Berkeley Burke attempted to appeal the rule was blocked by a High Court judge. This left them with no other option but to seek another judicial review.

What’s next?

The case should be resolved in October, when a judicial review hearing is due to be heard.

The three-day hearing is due to take place in London on 10th October.

The case will have wide-ranging implications for the SIPP market, with the FOS currently appearing to be cautious about making decisions on SIPP cases. However our specialist financial mis-selling solicitor Glyn Taylor believes that despite the judicial review the FOS should continue to process cases.

Glyn said: “The review in October is concerning the individual facts of the case in question. However, the FCA has already made it very clear to SIPP providers the responsibilities they owe to clients under the FCA principle of treating customers fairly.

“The FCA reiterated this view that SIPP operators could not shirk regulatory responsibilities towards their clients, regardless of whether there was an execution-only contract in place, during the Adams v Carey Pensions case.”

If you think you may have been mis-sold a SIPP, contact one of our expert solicitors who can see if you have a claim and advise you on what to do next.