Sipp provider Berkeley Burke has been granted the right to appeal its pivotal court case around due diligence of unregulated investments accepted by Sipp providers.
Last October, a judge dismissed Berkeley Burke’s request to appeal a Financial Ombudsman Service (FOS) decision which was upheld against it in 2014. The FOS decision found Berkeley Burke was responsible for failing to perform the required due diligence over accepting the unregulated investment Sustainable AgroEnergy.
When a judge dismissed Berkeley Burke’s claim against the FOS' decision at the end of last year, there were warnings from the Financial Conduct Authority (FCA) it could force Sipp firms out of business by opening the door to due diligence claims against them.
However, now the Court of Appeal has granted Berkeley Burke the right to appeal the judicial review decision. A hearing for the appeal will take place in the autumn, a Berkeley Burke statement said.
Berkeley Burke has been granted the right to appeal on all three grounds by Lord Justice Hickinbottom in the Court of Appeal, Civil Division.
According to a Berkeley Burke statement, Justice Hickinbottom, said: ‘I am persuaded this decision is potentially of considerable and wider importance within the industry and for customers, and the issues raised by it should be considered by this court, which has not considered them before.’
A spokesman for Berkeley Burke said: ‘We are pleased with this decision, not only for the Berkeley Burke wholesale Sipp administration business, but for the clear wider impact for both the Sipp industry and importantly the offering of FCA regulated execution-only services in the financial services sector.
‘This will not doubt reassure many in the professional indemnity insurance sector who have been deeply concerned about the potential open-ended implications from the judicial review. Berkeley Burke strongly maintains the judicial review has created a back-door duty of care where none was ever intended by the FCA, which is the ultimate watchdog there to protect the interests of the industry and consumers.’
Last month New Model Adviser® reported the FCA had visited five Sipp firms in the weeks following a warning letter being sent to chief executives about potential compensation claims.