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November 1, 2018

Berkeley Burke Loses Landmark Case

SIPP provider Berkeley Burke has lost the high court judicial review case it brought against the Financial Ombudsman Service (FOS).

Berkeley Burke Case

This dispute relates to a 2014 FOS decision which ruled against Berkeley Burke for failure to carry out adequate due diligence. This was in respect of its client’s investment in Sustainable AgroEnergy PLC, through their SIPP.

Sustainable AgroEnergy PLC, a biofuel scheme based in Cambodia, was investigated by the Serious Fraud Office. It subsequently went into receivership following their intervention.

Due diligence requirements

Berkeley Burke did not give investment advice to their client and therefore not responsible for the suitability of this investment.

However, the FOS initially upheld the client’s complaint. This was on the basis that a SIPP providers obligation to check an overseas investment is simply an extension of existing due diligence requirements.

Something Justice Jacobs, the judge in this appeal case, also agreed with, having ruled the FOS acted within the existing rules and was not in error of the law.

It’s expected Berkeley Burke will appeal the decision.

Wide spread implications for other SIPP providers

Even though this ruling is limited to this case, it’s thought that it could have wide spread implications for other SIPP providers. And may offer the possibility for people to make claims where previously there was little hope.

Such as when there was no adviser, but an unregulated introducer, involved in the transfer.

This verdict also prompted the FCA Chief Executive Andrew Bailey to write to other SIPP provider firms advising;

“If the outcome of any of these cases calls into question your firm’s ability both now and in the future to meet its financial commitments as they fall due, you must notify the FCA immediately. Where relevant, firms should also notify claims to their professional indemnity insurers in accordance with their policies.”

Claims against Berkeley Burke

It’s been reported the FOS currently has 270 cases against Berkeley Burke , which were put on hold pending the outcome of this case.

Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.