Options UK Personal Pensions (formerly Carey UK Pensions) yesterday afternoon sought permission from the Supreme Court to appeal the recent judgment by the Court of Appeal in the long-standing Adams v Carey case, parent company STM said in a statement today (29 April).
The original case was heard in March 2018 and relates to an investment made in 2012, STM said.
Options, and their advisers, consider that the Court of Appeal erred in law in its application of s.27 and s.28 of the Financial Services and Markets Act 2000, including in its consideration of what acts constituted the underlying relevant activities, STM stated.
It added that the Court of Appeal's findings in that respect are of significant general public importance and broader application to the entire financial services industry. These are issues which warrant consideration from the highest Court.
Alan Kentish, CEO of STM Group, said: "It is a natural step for Options, having spoken with its advisers, to request leave to appeal to the Supreme Court. There are clearly some very significant factors here that will not only impact the SIPP market, but also the wider United Kingdom financial services market as a whole. It seems there could be significant unintended consequences flowing from the judgment.
"There are real risks for firms and third parties who may have inadvertently stepped over an unclear regulatory line. This is a wholly undesirable outcome for providers and firms involved in the financial services sector and will drive up costs for consumers. The whole market needs more guidance on this issue, and we hope that this would be forthcoming as part of any appeal to the Supreme Court."
Law firm Herbert Smoth Freehills has recently published a briefing note, entitled ‘Court of Appeal holds SIPP provider liable for execution only clients' investment losses' stating that "this judgment could have significant implications for SIPP providers and other financial services firms that receive referrals from unregulated introducers.
"The decision clearly places the risk that an unregulated introducer is carrying out regulated activities onto the provider that receives the referral, even if the provider is unaware that a regulated activity is being carried out and where the client takes out a product on an execution only basis.
"This may lead some providers to review their business models and may force them to look behind any ‘assistance' being given by unregulated third parties, and to have to form a view on whether they have engaged in any regulated activities.
"Following this judgement, the Pensions Ombudsman has confirmed that it will now reopen other related complaints against Carey Pensions which had been put on hold pending the outcome of this appeal."