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Mattioli Woods battles PI provider over £400k claims
by Brian Cantwell on Jan 29, 2013 at 13:41
Sipp provider and advisory firm Mattioli Woods is battling a professional indemnity (PI) insurer over two claims for client redress totalling £400,000.
The claims relate to investment advice and are subject to separate legal wrangles between lawyers representing Mattioli Woods and the claimants.
Although Mattioli Woods has not conceded that the claims are valid, it is at loggerheads with a PI insurer which has refused to pay out if they are deemed to be legitimate, on the grounds that they were made outside the period for which the insurer covered the advice firm.
In its interim results for the six months ended 30 November 2012 Mattioli Woods said: ‘A number of claims were notified to the group's PI insurers in respect of the period from 18 February 2010 to 17 August 2011. The insurers have declined to indemnify the group in respect of certain of these claims. The group is of the opinion that the insurers' position is without any merit and is challenging their view.’
Nathan Imlach, Mattioli Woods finance director, said the firm would be in line to pay out £400,000 if the claimants and PI insurer won their battles.
'In a worst case scenario, if the claimants’ position is upheld and the insurer's position is upheld, then we're on the hook for £400,000,’ he said.
Imlach (pictured) said it was not always clear when a dissatisfied customer become a complainant.
'On any PI insurance policy there's a notification process….and in each period of insurance you have to notify claims and potential claims. Claims and potential claims are not a black and white thing,' he said.
'When you've got an unhappy client - and through the investment markets of 2009/2010 there were very few investment advisory businesses that didn't have unhappy clients- the question from the PI insurance perspective is when does an unhappy client become a potential claim?'
A statement in Mattioli Woods' interim results said it had not set aside the £400,000 to pay the claims.
It said: ‘The estimated compensation payable should the clients' claims be successful, with no indemnity provided by the insurers, is £400,000. To the extent the group believes it is possible but not probable that a claim will succeed and result in an economic outflow, no provision is made in these financial statements.’
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