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Categories:Advisers

Towry loses Raymond James court case

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A High Court judge has dismissed all cases brought by Towry against IFA firm Raymond James and seven former Edward Jones advisers.

Handing down the verdict at the Royal Courts of Justice in London today, the judge Mrs Justice Cox said: “For the reasons fully set out in this judgment, I find for the defendants and that the case of the claimant is therefore dismissed.”

Towry brought the claim against Raymond James and the seven advisers in an attempt to receive £6m in damages.

The case was heard over five weeks in July. Towry alleged that the seven advisers solicited up to 388 clients worth more than £33m to move with them to Raymond James in breach of the non-solicitation clauses in their Edward Jones contracts.

Raymond James and the other defendants argued Towry failed to provide any evidence of unlawful solicitation, and that Towry was in repudiatory breach of contract with Edward Jones’ advisers by allowing only seven days for new employees to agree terms before withdrawing any employment offer.

Raymond James chief executive Peter Moores says: “We are very pleased that the judgment handed down today dismissed the case against Raymond James and the seven advisers affiliated to us.

“The judgment confirms the advisers did not breach their restricted covenants, that there was no misuse of confidential information and there was no conspiracy to injure Towry EJ. The result today was the right one.”

Mrs Justice Cox added: “Having regard to the whole evidence in this case, the allegations against Raymond James do not withstand scrutiny.”

Raymond James is pursuing £930,936 in legal costs from Towry, though this figure may change subject to ongoing negotiations.

Towry chief executive Andrew Fisher says: “We are obviously disappointed that the Court did not find in our favour. We did not undertake this action lightly but to protect our legitimate business interests for our clients and shareholders.

“The judgment does support the efforts of professional services firms like ours, to protect their legitimate business interests, through contractual non-solicitation, non-dealing and confidentiality clauses.

“The contracts of the former Edward Jones employees were materially different to our standard Towry contracts in that they did not contain a ‘non-dealing’ clause and we are confident that our current Towry contracts afford us appropriate commercial protection.”

 

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Readers' comments (10)

  • What price justice?

    It really is incredible that it has cost so much to defend this claim.

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  • No one ownes a client, not an adviser, not a company, not an Insurance company or an investment house.

    A lesson for all - but will it be a lesson learnt.

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  • @Darren: The last paragraph of the article - the press release from Towry - confirms the answer is "no".

    Towry are trying to assure their shareholders that they do still own the clients of all the other Towry advisers, on the basis that only the ex-EJ employees didn't have a "We own your clients" clause in their contracts.

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  • Peanuts really when you consider how much they charge their clients. Probably settle out of the petty cash tin.

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  • Justice has been done in this case.

    However, I hope that it will not set a precedent for those cases where owner managed businesses seek to protect the imbedded value of their business from 'farming' advisers who inherit existing client banks and then seek to 'steal' the clients when they depart for pastures new.

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  • A Woolf in sheeps clothing.

    Mr. Fisher criticises the IFA community for getting it wrong. Only his company has the right business model. In fact the true situation is exactly the opposite, as demonstrated by fines and losing court cases like this. I for one will not shed a tear when his company goes the same way as numerous other IFA nationals that got too big for their boots.

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  • Fantastic result for comman sense and fairness. Couldn't happen to a better company, but I do feel sorry for their clients.
    Charges....ouch!

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  • I don't quite think that the "legitimate business interests" that Mr Fisher glibly cites quite run to a loss of £6m in respect of just 388 clients supposedly worth £33m. That's £6m in trail at, say, 0.5% p.a. is it? My calculator tells me that £33m generating trail of 0.5% = £165,000 p.a. which would take in excess of 36 years to amount to £6m.

    Mr Fisher ~ you tried it on and tried it on big with a view to destroying the lives of these seven ex-amployees. And you got a pasting. Good.

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  • After this result and costs etc I'm not suprised that TL are trying to reassure their shareholders about nearly everything under the sun!!

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  • I don't know about you but I find a spring in my step and a smile on my face today.

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