The Pensions Ombudsman has confirmed it will reopen its investigations into Carey Pensions claims following the Court of Appeal's latest ruling against the SIPP operator.
Last week (1 April), the Court of Appeal ruled in favour of Russell Adams and against his self-invested personal pension (SIPP) operator Options Personal Pensions, formerly Carey Pensions, in their long-running legal dispute.
Now, the Pensions Ombudsman has told Professional Adviser it will continue its investigations into its Carey Pensions claims which were previously on hold pending the outcome of the case.
A spokesperson for the Pensions Ombudsman said: "We put all our Carey cases on hold when this matter first went to court and even when the High Court held in Carey's favour, we decided to leave them on hold pending the appeal.
"We are now in a position to continue our investigations and determine them taking into account the Court of Appeal judgment. We will be in touch with the complainants and organisations to let them know when we will be looking at their particular complaint."
They added: "We are not able to reopen previous determinations as they are final and binding, subject to appeal to the high court within 28 days on a point of law."
In response to the ruling, Martin Kaye solicitor Tobias Haynes said the Court of Appeal's decision to rule against the SIPP operator was extremely important and made clear responsibility lays firmly with providers.
In response to today's statement from the Pensions Ombudsman, he said while he welcomed the news the organisation should reconsider other complaints that are similar but not linked to Carey Pensions.
"It will be a travesty of justice if the Pensions Ombudsman does not now revisit historic complaints which are wrong in law. The Pension Ombudsman's 28-day time limit for appeal is not arbitrary - the High Court has the power to extend this time limit or give relief from sanctions where it has not been complied with.
Haynes said he believed the High Court would have "considerable sympathy" with people who are currently out of time to make claims where a decision made "is plainly wrong in law and due regard will likely be given to the need for access to justice and the right to a fair trial".
"The Pensions Ombudsman should consider matters in this light. Additionally, the Financial Ombudsman Service has been known to reconsider complaints, and it is hard to envisage why the Pensions Ombudsman would not be able to do the same, particularly where its decisions have been plainly wrong in law."
Haynes added that in the Berkeley Burke/Financial Services Ombudsman (FOS) ruling Mr Justice Teare said "it is true that the relevant legislation (Schedule 17 to the Financial Services and Markets Act 2000, paragraph 14) does not contain an express power for an ombudsman to reconsider a complaint. But I consider that Mr. Strachan QC, on behalf of FOS, was right in his submission that the power to reconsider a complaint is part and parcel of FOS's duty to consider a complaint which has been properly brought before it".
"In light of this, and in my view, the Pensions Ombudsman is able to reconsider complaints that it has got wrong - and I would encourage it to do so," the lawyer said.
Lorry driver Russell Adams had alleged Carey Pensions mis-sold him a SIPP. He and his lawyers accused the SIPP firm of using a Spain-based unregulated introducer to facilitate investments in Store First unit pods.
In July 2012, Adams invested £50,000 into Store First unit pods. Over the years, the funds have depleted and are now virtually worthless.
During the 2018 trial, Adams' legal representatives argued the pension administrator breached Financial Conduct Authority COBS rules that dictate a firm must act in a client's best interest. They claimed that, if the firm had been doing so, it would have declined to give business to this sort of "high-risk and highly speculative investment".
In that trial, they also argued that, if Adams had received "competent financial advice", it was unlikely he would have been put into a SIPP in the first place. Carey's defence team argued the pension administrator was "blameless" for the loss, however, but the client was not.
The court heard Carey Pensions had warned Adams the investment was high-risk and highly speculative, but Adams chose to go ahead anyway to claim a £4,000 inducement from the introducer, which Carey Pensions chief executive Christine Hallett said the firm reported to HM Revenue & Customs.
Carey's lawyers added that SIPP providers were under no obligation to ascertain to what extent an investment is high-risk and reject that investment.
In May 2020, Carey Pensions won in the High Court against former client Adams, with Adams' claims dismissed on all grounds. During the trial, Adams' representatives argued Carey had breached Financial Conduct Authority COBS rules that dictate a firm must act in a client's best interest by allowing Adams to use Carey's SIPP to invest in a risky, unregulated store pods scheme. Carey, however, argued SIPP providers were under no obligation to reject the investment.
Then, in September last year, the Court of Appeal granted Adams permission to appeal his landmark case and was accepted by Lord Justice Arnold on the grounds that Adams had a real prospect of success. The Court of Appeal is the second-highest court in the UK legal system behind only The Supreme Court.
Arnold found that the importance of the issues raised in the ground of appeal, and the delay of more than two years in producing the original judgment, amounted to compelling reasons for the grant of permission.
First published by our sister title Professional Adviser