SIPP provider Berkeley Burke faces 164 fresh claims via group action

Hannah Godfrey reports...

Self-invested personal pensions (SIPP) administrator Berkeley Burke is facing 164 claims in a group action against it that is currently before the High Court in Bristol, RP’s sister title Professional Adviser can reveal.

Solicitor Hugh James is bringing the claims against the troubled SIPP provider and have recently selected the lead claimants in the group action.

Partner and head of group litigation Neil Stockdale told Professional Adviser the claims were worth approximately £40,000 each, and he expected the case to reach the courtroom by autumn next year. Stockdale said many of the claims related to the facilitation of unregualted investments.

Stockdale said today’s decision – the High Court rejected Burkeley Burke’s claim against a Financial Ombudsman Service (FOS) decision – had been “encouraging” for “investors who said they have lost their pensions due to the company’s failure to undertake due diligence”.

“We act as lead solicitors in a case being brought by 164 claimants in a group action against Berkeley Burke that is currently before the High Court in Bristol,” he continued. “Today’s decision of Mr Justice Jacobs is significant  for the claimants in this case, which is likely to reach trial next year with the hearing of a number of test cases.

“What is significant about the judgment is the judge found that Berkeley Burke failed to treat its customers fairly or act with skill, care and diligence when accepting an unregulated investment into a self-invested personal pension.

“The judge also rejected Berkeley Burke’s argument that it had no choice but to process the investment or that it was only permitted to give risk warnings, since had it completed adequate due diligence it would not have accepted the investment in the first instance.”

Hundreds of complaints ‘held’ by FOS

Hugh James said it submitted a freedom of information request to the FOS during the summer, which revealed 270 complaints of a similar nature that the ombudsman had placed on hold while awaiting the outcome of the High Court decision.

“It will be interesting to see how these complaints are now determined,” Stockdale added. “One would expect many complaints to now be upheld based on similar facts.”

Berkeley Burke was fighting a 2014 ombudsman where the FOS ruled it had to compensate a client after it failed to carry out appropriate due diligence on his investment.

After the Tuesday High Court decision, Financial Conduct Authority chief executive Andrew Bailey sent a letter to the heads of SIPP providers reminding them of their regulatory commitments.

Berkeley Burke has been contacted for comment.