Following the UK’s high court decision to make two illegal pension introducers refund clients, one of them has confirmed to International Adviser it plans to appeal.
On 7 August 2020, Avacade and Alexandra Associates were ordered to pay over £10.7m ($13.7m, €11.7m) to the Financial Conduct Authority (FCA), to be distributed back to investors.
The sum was made up of £10m from Avacade and £715,000 from Alexandra Associates.
But the latter is appealing the decision.
The firm was already successful in replacing the judge presiding the case because of conflicts of interest.
Another trial coming
Omid Khub, from Zakery Khub Solicitors who looking after the Alexandra Associates case, said: “After our successful application for the recusal of the trial judge on 14 July 2020, the hearing of 31 July 2020 concluded the outstanding matters from the first trial.
“The judge for this hearing rejected the FCA’s primary case for an interim restitution orders (IRO) based on ‘investment losses’ and stated in his judgment: ‘In the circumstances, I decline to make an IRO on the assumed loss basis advanced by FCA as its primary case.
“‘I am not in a position to be satisfied as to the ‘likely amount’ that a court will order on this basis at/after the second trial’.”
Not responsible
Alexandra Associates and its lawyer claim the introducer has no responsibility for the losses experienced by investors, and that the Financial Services Compensation Scheme (FSCS) has already handed out over £40m to the clients of the regulated IFAs and Sipp providers involved.
Khub continued: “Our clients are pleased the court has recognised the need for the second trial.
“Whilst our clients sympathise with any consumer who has suffered a loss, they insist that the second trial is necessary to show that they did not cause the loss alleged by the FCA.
“It is clear to our clients that the FCA–regulated IFAs and Sipp administrators have a case to answer. The FSCS has confirmed to us that it has already paid out £39,356,175.91 and £3,227,676.84 for the failures of two IFAs, to whom our clients were an introducer.
“It is noteworthy that FSCS claims are being made against the FCA–regulated IFAs and Sipp administrators for their conduct and causation of loss, and not our clients.
“Our clients are now focused on the appeal and we can confirm that our clients’ notice of appeal – on at least 28 grounds – has been filed with the court of appeal.
“For the avoidance of doubt, the judgment of the 31 July 2020 is also subject to appeal and our clients are currently reviewing the judgment,” he added.
Clarify the law
When asked about that appeal, Khub told International Adviser: “The second trial is concerned with the quantum of loss by having regards for the current value of each of the investments concerned.
“This is necessary for a fair conclusion to the second trial. In this regard, our clients will seek to obtain at least eight valuations, from eight suitably qualified experts in relation to each of eight different type of investments.
“We will invite the court at the second trial to have regards for the sums which FSCS has confirmed to us that it has already paid out for the failures of at least two IFAs, to whom our clients were an introducer.
“We will comment upon the court of appeal’s decision once the decision is available.
“It must be noted, however, that the second trial will only go ahead if the appeal is not successful. In any event, this appeal will clarify the law once and for all.
