West Law Report

Right accrues on transfer

Posted in Times Law Report by mrkooenglish on August 12, 2008

From The TimesAugust 12, 2008

Right accrues on transfer
Shore v Sedgwick Financial Services Ltd and Another in the Court of Appeal
Court of Appeal

Published August 12, 2008

Shore v Sedgwick Financial Services Ltd and Another

Before Lord Justice Buxton, Lord Justice Keene and Lord Justice Dyson

Judgment July 23, 2008

If a client, on the advice of a financial expert, transferred his pension investment from one old safe pension scheme to a new risky pension scheme, in which the value of his investment went down, the client’s right to sue the adviser in negligence accrued when the transfer was made; it was not contingent upon the occurrence of loss.

The Court of Appeal so stated in a reserved judgment dismissing the appeal of the claimant, Clifford Shore, from the dismissal by Mr Justice Beatson ([2007] EWHC 2509 (QB)) of his claim for negligence against the defendants, Sedgwick Financial Services Ltd and Barclays Financial Planning Ltd, for breach of section 62 of the Financial Services Act 1986, now replaced by the Financial Services and Markets Act 2000, on the ground that the claim had been barred by limitation since the action was brought in the later part of 2005 for damage suffered in early 1999.

Mr Michael Soole, QC and Mr Ben Elkington for Mr Shore; Mr John Wardell, QC and Mr Thomas Seymour for the defendants.

LORD JUSTICE DYSON said that an investor, who wished to place £100 in a secure risk-free investment and, in reliance on negligent advice, purchased shares, suffered financial detriment on the acquisition of the shares despite the fact that he paid the market price for them.

It was no answer to the investor’s complaint that he had been induced to buy a risky investment when he wanted a safe one to say that the risky investment was worth what he paid for it in the market.

His complaint was that he did not want a risky investment. A claim for damages immediately upon the acquisition of the shares would succeed.

The new scheme was a transaction under which Mr Shore obtained a bundle of rights which, from the outset, were less advantageous to him than the benefits that he enjoyed under the old scheme.

It was not necessary to wait to see what happened to determine whether Mr Shore was financially worse off in the new scheme than he would have been in the old scheme.

Lord Justice Keene and Lord Justice Buxton agreed. Solicitors: Irwin Mitchell; K & L Gates LLP.

One Response

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  1. VASTINE Alexis said, on August 13, 2008 at 12:39 pm

    Thanks for sharing that!


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