A group of 77 investors have cleared the first hurdle in their attempt at a legal claim against Sipp provider Berkeley Burke over claims it was responsible for losses they incurred from high-risk investments, in a case that could have knock-on effects for the Sipp market.
A judge's decision published online last week outlines the case of investors who believe Berkeley Burke should be held responsible for what they call 'mis-selling'. They argue the Berkeley Burke allowed them to invest through non-regulated introducers.
The Sipp provider has denied it has any responsibility whatsoever, because all the clients were treated on an execution-only basis.
Lawyers for the investors said investments within the Sipps included unregulated schemes ranging from ‘forestry in Australia or Fiji to a residential property in Arkansas and a holiday apartment in Grenada’.
All 77 of the investors said they came to Berkeley Burke through one of nine introducers. According to the decision their investments ranged in size from £6,000 to £160,000.
At a hearing in the Bristol Commercial Court on 15 December last year the investors took the first steps to making a group litigation order, which would allow them to pursue Berkeley Burke through the courts.
Judge Russen, who heard the case last December, signalled he was 'minded to make the group litigation order' but added he needed to secure consent of the president of the Queen’s Bench Division before he could confirm the action.
If this order is granted then a large number of claims against Berkeley Burke could be heard at once. A further 66 investors have already suggested they want to join the legal action. In total Judge Russen suggested 'there might be around 200 claimants in total, and quite possibly considerably more'.
View the full details of the decision here:
Berkeley Burke has faced issues in the past about claims against it. The company is currently engaged in a separate ongoing legal battle over a Financial Ombudsman Service decision from 2014 over biofuel scheme Sustainable AgroEnergy.
Any legal action could also have an impact for other Sipp providers. Earlier this year the Financial Services Compensation Scheme said it will start accepting claims against Sipp firms over due diligence on investments for the first time. It said clients who came through unregulated introducers could submit a claim.
The other aspect of the hearing was Berkeley Burke seeking to transfer the case from the Bristol District Registry to the Royal Courts of Justice. Judge Russen dismissed this application.
Berkeley Burke did not respond to New Model Adviser®'s request for comment.