High court rules negligence claim in relation to pension advice in relation to income draw down scheme is time barred
| DOI | https://doi.org/10.1108/13581980810888886 |
| Published date | 25 July 2008 |
| Pages | 274-280 |
| Date | 25 July 2008 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
LEGAL COMMENTARY
High court rules negligence claim
in relation to pension advice
in relation to income draw down
scheme is time barred
Joanna Gray
University of Newcastle upon Tyne, Newcastle upon Tyne, UK
Abstract
Purpose – The purpose of this paper is to report and comment on the High Court of Justice ruling on
Shore v. Sedgwick Financial Services Ltd & Others.
Design/methodology/approach – The paper outlines the facts surrou nding the case and
comments on the ruling.
Findings – The claim for breach of duty against the defendants was time barred.
Originality/value – An interesting feature of this judgment is that one theme that runs its entire
course in terms of judicial finding of fact and of law is the degree to which the defendants did or did not
adequately explain the risks associated with income drawdown and the degree to which the claimant
either understood or failed to understand or indeed voluntary undertook the extra risk of taking
maximum income under income drawdown pension schemes in his desire to for flexibility and
retention of control over pension capital.
Keywords Legal decisions,Pensions
Paper type Research paper
Shore v. Sedgwick Financial Services Ltd & Others (High Court of Justice:
Mr Justice Beatson).
Date of judgment: 8 November 2007
Facts
This case concerned claims for both common law negligence and for breach of
statutory duty under section 62 of the Financial Services Act 1986 brought by a private
investor, Mr Shore against the defendants, Sedgwick Financial Services Ltd (“SFS”) in
relation to advice given by him in connection with his transfer of accrued pension
rights in a final salary scheme into a pension fund withdrawal (“PFW”) scheme
managed by Scottish Equitable. Many of the facts essential to determination of the
issues at stake in this claim were disputed, not comprehensively and consistently
document and transpired over ten years ago causing the Judge to comment right at the
outset of what was, of necessity, and extensive and exhaustive analysis of docum ents
and witness testimony:
Over ten years have passed since the crucial events and it is not easy to decide where truth and
accuracy lie. Inevitably the recollections of those involved will differ to some degree. It would
be surprising if it were otherwise. In these circumstances, as HH Judge Jack QC, as he then
was, said in Loosemore v Financial Concepts [2001] 1 Lloyd’s Rep. PN 235, at 237.
The current issue and full text archive of this journal is available at
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JFRC
16,3
274
Journal of Financial Regulation and
Compliance
Vol. 16 No. 3, 2008
pp. 274-280
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980810888886
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