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Berkeley Burke ordered to pay £1m to cover legal cost of investors

Embattled Sipp provider Berkeley Burke has been ordered to pay almost £1m to cover the legal costs of investors left out of pocket after making high-risk unregulated investments.

The sum comes from failing to comply with a court order that saw hundreds of claimants take legal action to recover their losses.

The court order obtained by Money Marketing shows Berkeley Burke must cover the interim payment of a group litigation order to the tune of £987, 799.52.

Guildhall Chambers barrister John Virgo obtained a group litigation order for a group of claimants seeking damages against Berkeley Burke for unsuitable investments.

He represented the claimants throughout the proceedings and secured the order, resulting in Berkeley Burke having to pay almost £1m as an interim payment on account of the claimants’ costs as well as the costs of the claimants’ application.

The legal battle about whether Berkeley Burke can overturn the ombudsman’s ruling that it failed to do due adequate due diligence on client’s failed investment has attracted widespread interest.

Libertatem director general Garry Heath has told Money Marketing about meetings that have been held with various stakeholders regarding a crowdfunding campaign to cover Berkeley Burke’s defence.

Heath pointed out that financial planners should also be taking an interest because, if the Financial Ombudsman Service wins, “they will use this precedent as a hammer – not only on other Sipp players but also on all advisers.”

A spokesman for Berkeley Burke says: “We are considering our options while focusing on the hearing at the Court of Appeal for Berkeley Burke Sipp Administration Limited.”

Legal experts believe that there is a possibility that Berkeley Burke Sipp Administration Limited, incorporated on 25 April 2008, might now slip into insolvency.

Clarke Willmott Solicitors senior associate Laura Robinson says: “I can only speculate, but an advised defendant in court proceedings will almost certainly have appreciated what the consequences would be for openly and deliberately dis-engaging in the litigation, including the severe financial consequences that would result.

“One possible explanation, where a defendant chooses this course of action, is that it simply cannot fund the proceedings any further. I cannot know, but if that is Berkeley Burke’s situation, it’s possible that the firm may slip into insolvency in light of the £1m costs order it now faces.”

She adds: “Were that to happen, it seems likely that the industry would pick up the bill and hundreds of those who lost out will be once more restricted to the compensation available from the Financial Services Compensation Scheme.”

The Sipp industry has been eagerly awaiting the outcome of Berkeley Burke’s appeal following the initial unsuccessful judicial review, which is due to be heard on October 15 and 16 this year.



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FCA must give greater consideration to where detailed rules would result in more effective regulation and better protection Last month saw Sipp provider Berkeley Burke lose its High Court appeal against the Financial Ombudsman Service. The appeal followed the Ombudsman’s decision against Berkeley Burke for failing to carry out adequate due diligence on an unregulated […]


Berkeley Burke loses High Court appeal against FOS

Embattled Sipp provider Berkeley Burke has lost its judicial review in a landmark High Court ruling published today. The ruling is over a longstanding dispute between Berkeley Burke Sipp Administration and the Financial Ombudsman Service. The judgment establishes with greater certainty whether Sipp providers have a duty of care to vet unregulated investments for their […]


Berkeley Burke: We will defend our position through appeal

In a response to the High Court judgement against Berkeley Burke for failing to carry out adequate due diligence on a £29,000 unregulated collective investment scheme, the Sipp administrator has released the following statement exclusively to Money Marketing: “Berkeley Burke Sipp Administration Ltd (“the Company”) notes the ruling in the judicial review and, on legal advice, will be seeking leave to […]


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Pay £1m to investors? or pay £1m to cover their court costs, eg to their legal advisers?

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