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January 26, 2023

Carey Pensions refused right to judicial review of FOS decision

Carey Pensions, now Options Pensions, has been refused permission to apply for a judicial review of a Financial Ombudsman Service decision.

The pension provider’s application for a judicial review of a decision made concerning a client complaint was denied in a hearing held in December.

What was the complaint against Carey Pensions (Options) about?

The complaint made by client Mr Fletcher alleges that Carey’s (Options) did not carry out sufficient due diligence on Commercial Land and Property Brokers (CL&P) before accepting business from it.

Mr Fletcher said he was cold-called in 2011 by Commercial Land and Property Brokers. And was told by a CL&P representative that he’d receive a greater retirement income, with very little risk, if he transferred his pension savings into Store First.

Store First was an investment involving leases of storage units and was held in the SIPP administered by Carey.

CL&P was not regulated by the Financial Conduct Authority to advise on investments. Its director Terence Wright was the subject of an FSA warning notice from 2010. The FSA believed he “may be targeting UK customers” and he was on a list of firms to avoid

Carey Pensions (Options) accepted Mr Fletcher’s referral on 29 September 2011 and he transferred about £30k into the SIPP. He was paid £2,000 “cashback” by CL&P which he wrongly believed would be tax-free.

The investment in Store First was unsuccessful and Mr Fletcher suffered a significant loss.

The FOS upheld the complaint and ruled that it was fair and reasonable for Carey (Options) to compensate Mr Fletcher for his financial losses.

Why did Carey Pensions (Options) challenge the FOS decision?

The FOS issued a provisional decision in November 2021, setting out why it believed that the complaint should be upheld.

However, Carey’s did not accept the provisional decision. And made further submissions including a request for an oral hearing, which the Ombudsman refused.

The FOS set out the reasons for refusing an oral hearing and its final decision on the complaint, which it upheld in favour of the client.

In the application for a judicial review Carey Pensions (Options) argued that it had ‘complied with its contractual and common law duties and that it was under no duty to carry out the kind of due diligence suggested by FOS.’

It also contested the Ombudsman’s refusal to conduct an oral hearing and suggested the ombudsman failed to give ‘adequate reasons for the decision, failing properly to articulate and explain the duties of due diligence which he found to be applicable.’

In the judgement issued in December 2022 the Hon. Mr Justice Bourne dismissed most of the grounds Carey’s (Options) submitted. And in conclusion decided ‘Permission to apply for judicial review is refused.’

Last year The Supreme Court denied Options the right to appeal in the landmark Adams vs Carey Pensions SIPP 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.