An email written by Berkeley Burke director Zachary Gallagher has revealed the “woeful” sum raised from the industry for the firm’s court appeal.
The email, which was leaked to RP’s sister publication Professional Adviser, revealed £60,000 was received for Berkeley Burke SIPP Administration’s appeal, well short of the £300,000 funding target.
The £60,000 came from seven self-invested personal pension (SIPP) operators and one private individual. A loan of £45,000 was also offered from another private person. PA understands the email was sent to a variety of SIPP administrators.
In the email, Gallagher – who is also a former chairman of the Associated of Member-Directed Pension Schemes, the SIPP industry trade body – appeared to reprimand the industry for “failing to grasp” their financial backing towards the appeal would have furthered the industry’s interests, rather than in support or sympathy for Berkeley Burke SIPP Administration.
Gallagher wrote: “We had maintained a two-month campaign for funding to assist in the cost of the appeal, though in fact our first request for help, and our first warnings of what might transpire if the original decision of the FOS in 2014 went unchallenged, was made five years ago.
“Sadly, and bizarrely given that Berkeley Burke SIPP Administration entering administration served to deny it the prospect rewards of success at the Court of Appeal, many in the SIPP and platform industries seemed not to grasp that their financial help with the appeal would be in furtherance of industry interests, rather than in support or sympathy for Berkeley Burke SIPP Administration. To those who did see the implications for industry and chose to offer their backing financial or in spirit, our warmest thanks are due.”
The director described the donations as “woeful” and wished the industry well in “what might follow”. Berkeley Burke has been contacted for comment.
Earlier this month the administrators handling Berkeley Burke SIPP Administration blocked the firm’s Court of Appeal hearing following a judgment made against it last year.
The administrators, RSM Restructuring Advisory, said its wider responsibility was towards Berkeley Burke’s creditors and the safeguarding of the funds from the estate for the benefit of the creditors. As a result, it decided not to continue with the appeal.
In February, Berkeley Burke SIPP Administration was granted permission to appeal the judgment delivered against it in October 2018. That court judgment rejected Berkeley Burke’s claim against a Financial Ombudsman Service (FOS) decision.
In the original decision, the ombudsman ruled the SIPP administrator had to compensate a client after it failed to carry out appropriate due diligence on their investment.
Berkeley Burke, which facilitated the investment, argued it carried out the due diligence expected of it at the time, according to Conduct of Business Sourcebook (COBS) rules, and that the FOS subsequently placed undue responsibility by applying Financial Conduct Authority Principles 2 and 6 in a way that created a new and unexpected duty of care on the part of SIPP operators.