Options UK Personal Pensions LLP (previously known as Carey Pensions) is seeking permission to appeal the High Court's refusal to grant a judicial review application in relation to a decision by the Financial Ombudsman Service (FOS) which upheld a scheme member's complaint against Carey.
The original member complaint was one of many arising out of introductions by Commercial Land and Property Brokers (CLP) who suggested to members that they could obtain substantial returns by using funds held within a Carey SIPP to invest in storage units. The member concerned had suffered a significant loss after transferring his pension fund to a Carey Pensions SIPP and investing in the storage units. FOS upheld the member's complaint. Although Carey was acting on an execution only basis, FOS held that Carey had failed to carry out sufficient due diligence before accepting any business from CLP and that, had it done so, it would have discovered that one of CLP's directors appeared on a list on the FSA's website headed "Firms and individuals to avoid".
The judicial review application sought to challenge the FOS decision on a number of grounds, arguing that:
- Carey had been under no duty to carry out due diligence of the type suggested by FOS;
- FOS had failed to explain the duties of due diligence which it had found to apply to Carey;
- FOS's decision was irrational; and
- FOS's refusal to convene an oral hearing had meant the procedure was unfair.
In the High Court, the judge found against Carey on all grounds. Options UK Personal Pensions LLP is now seeking permission to appeal the judge's decision.
Our thoughts
This is the latest chapter in a series of FOS and court decisions relating to members investing in storage units via a Carey SIPP. At the heart of the cases lies the question of the extent of the duty owed by SIPP providers to their customers when the SIPP operates on an execution only basis. Any Court of Appeal decision is likely to have ramifications which go well beyond the specific case in question.
