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Adams v Carey Pensions – What does this now mean for Sipp Claims?

7 July 2020

By Managing Director Sarah Stokes

The High Court ruled on one of the most anticipated cases in negligent Sipp Provider history a few weeks ago, in the Adams v Carey Pension case.

Mr Adams argued that Carey Pensions were responsible for significant losses to his pension fund after he transferred an existing pension into a SIPP they administered. The judgement dismissed the case on all grounds ruling that Carey acted as a non-advisory pensions administrator via an execution-only contract.

The case threw up many talking points around the role and requirements of the Provider, what obligations they have regarding the use of Unregulated Introducers and how Guidance set out by the Financial Conduct Authority is not necessarily legally binding.


Why did The High Court find in favour of Carey Pensions and not Adams?

The High Court made judgements based strictly under the Financial Service Market Act, they did not pay much attention to the regulators Guidance.

In the cold light of day, there is not much to protect the consumer under the Financial Service Market Act. This means the much discussed ‘treating customers fairly’ notion has been pretty much bypassed since it falls under ‘Guidance’ – rather than any binding law.


But why were Carey Pensions, as Provider, not liable for the unregulated advice given to Adams? 

Because Carey’s did not give the unregulated advice. A firm called Commercial Land and Property (CL&P) did. CL&P acted as Introducers for Careys, and gave unregulated advice, even though they were not authorised to do so.

The High Court found that Careys were unaware of this advice and that the arrangement between them as Provider and CL&P as Introducer was not a joint venture. In fact, Careys involvement was merely an ‘execution only’ contract, meaning the regulatory requirements (set out by the FCA) did not supersede the execution only contract – which the consumer was deemed responsible for.


Will this case have an effect on future Financial Ombudsman Service rulings?

The Judge stated this is not a landmark case, although precedents could be laid down because of it, especially if the ruling is upheld on appeal. However, the FCA were quick to say the High Court ruling does not change Guidance and Requirements.


Do you think SIPP Providers will learn anything from the Adams V Carey Pensions case?

If this case is anything to go by, it shows how little attention some SIPP Providers pay to the regulators Reviews and Guidance, so it could be the case the outcome of the Adams v Carey case sends out the wrong message.


Have Pension Claim Consulting had any recent claims against Carey Pensions?

Last May Pension Claim Consulting won a claim on behalf of a gentleman referred to as Mr T. The timing was ironic as it was within a couple of weeks of the High Court throwing out Adam’s claim against Carey. The point is, we went through the Financial Services Ombudsman and were successful – the claims were very similar.

Both claims related to Carey Pensions accepting a Sipp application from unregulated introducer Terence Wright and his firm CL&P. The difference was that The High Court accepted the ‘Execution basis only’ argument from Carey. The FOS would not have done so. Wright was of course on the FCA warning list as far back as 2010, yet Carey continued to accept business from his firm as highlighted in our claim.


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