SIPP Update- Compensation Hope For Investors mis-sold Unsuitable SIPPs products

In 2011, Mr Wayne Charlton invested in a “green oil” scheme in Cambodia which had been offered to him by a company called Sustainable Agro Energy Plc (“the SA scheme”) . Mr Charlton was introduced to Berkeley Burke SIPP Administration Limited as he wished to hold the investment in a SIPP. He also applied to transfer his personal pension to Berkeley Burke so he could use these funds to invest in the SA scheme.

  • The SA scheme was found to be a fraud and Mr Charlton lost his investment.

  • In a final decision in early 2017, the Financial Ombudsman Service (“FOS”) held that Berkeley Burke had not acted fairly and reasonably in allowing Mr Charlton to invest into the SA Scheme via his SIPP.

  • In a wide ranging determination, FOS provided that Berkeley Burke had a duty to comply with the FCAs Principles for Business and Treat Its Customers Fairly- this meant that Berkeley Burke ought to have carried out due diligence into the SA Scheme prior to the investment to include ensuring SA was appropriate for a Pension Scheme/SIPP, verifying SAs assets, ensuring the investment was genuine and not a fraud, and ensuring an independent valuation of the investment. Failure to do so caused Mr Charlton a loss. This extensive due diligence was required despite the fact Berkeley Burke was not providing advice and was acting on an execution only basis.

  • On 1 November 2018, the High Court dismissed an application by Berkeley Burke for a judicial review of the decision by FOS. The High Court in dismissing Berkeley Burke’s application accepted the lawfulness of FOS’s decision and that it was entitled to reach the decision it did which was fair and reasonable in all the circumstances.

  • On 18 September 2019 Berkeley Burke SIPP Administration Limited was placed into administration. The Financial Services Compensation Scheme (FSCS) is now accepting complaints against this firm.

  • On 4 October 2019, the administrators of Berkeley Burke SIPP Administration Limited confirmed that the proposed appeal of the High Court Judicial Review outcome would not go ahead which spells the end of the legal challenge to the FOS determination of the matter.

Hope for Investors?

Investors sold unsuitable SIPP products now have the ability to present a claim to FOS or the FSCS on the basis of the Berkeley Burke determination.

Even where SIPP providers are not advising customers (and are acting on an execution only basis) they are still required to comply with the FCAs Principles for Business and Treat Its Customers Fairly. This means conducting appropriate due diligence to determine whether an investment was suitable to be held within a SIPP in the first place.

It is felt that many SIPP providers will have failed in this regard.

JCLM have expertise in successfully pursuing compensation claims for those mis-sold SIPP products through FOS and the FSCS.

Suffered a loss as a result of an unsuitable SIPP product?

Please contact JCLM to see how we can help.

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