REGINA v INVESTORS COMPENSATION BOARD EX PARTE BOWDEN & ANOTHER
| Published date | 01 January 1995 |
| Date | 01 January 1995 |
| Pages | 85-91 |
| DOI | https://doi.org/10.1108/eb024830 |
| Author | Balcombe,Rose LJJ,J Hutchison |
| Subject Matter | Accounting & finance |
CASE LAW
REGINA v INVESTORS COMPENSATION BOARD EX PARTE
BOWDEN & ANOTHER
(Court of Appeal) Balcombe and Rose LJJ and Hutchison J
Date of
Hearing:
19th and 20th May, 1994
Date of Judgment: 24th
June,
1994
Reported at: 3
Weekly Law Reports
1045
THE FACTS
A number of investors, among them
the appellants in this case, took out
'home income plans' (HIPs) pro-
moted by insurance brokers who
were FIMBRA members. Mortgage
loans were raised under these plans
on the security of the appellants'
homes and the capital so obtained
was invested in income producing
equity linked single premium invest-
ment bonds. The values of property
and equities then fell, interest rates
rose sharply and the appellants' sus-
tained serious losses in that they
were left with mortgage liabilities
they could not meet.
The nature of the advice they
received from the brokers and the
manner in which they received it fell
short of the standard required by
the Financial Services Act (FSA)
and the relevant rules and regula-
tions made under it so that, in
theory at least, the brokers were
open to damages claims from the
appellants' under s. 62(1) of the FSA.
Since such claims were not worth
pursuing against the brokers, due to
their default, the only hope of com-
pensation the appellants' had was an
award for statutory compensation
from the Investors Compensation
Scheme (ICS). The ICS was set up
under s. 54 FSA and governed by the
Financial Services (Compensation of
Investors) Rules 1990 (hereinafter
referred to as 'the Rules').
The appellants applied to the ICS
for compensation and its Board
found the following:
- it was not bound by the Rules to
assess the amount of compensation
payable as being equal to the
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