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Ex-Whitechurch adviser wins court battle over £37k Keydata claim

A former appointed representative of Whitechurch has succeeded in striking out a legal claim by the network to contribute to the cost of settling with the Financial Services Compensation Scheme over Keydata.

Whitechurch had pursued RGT Financial Services partner Roger Thomas for £37,739 in professional indemnity insurance excess costs.

But Bodmin County Court has struck out the claim after Whitechurch failed to respond to a request for further information on how the alleged debt had been calculated and why the adviser was liable.

The network’s latest annual accounts, filed in August, state it finalised its liabilities with the FSCS in 2013 in respect of the scheme’s long-running legal battle with advisers over Keydata compensation.

The accounts show Whitechurch set aside £704,616 for the settlement of Arch cru and Keydata claims and says it has since received a reimbursement from its PI insurer.

Regulatory consultant Evan Owen, who represented Thomas, said in a witness statement: “The claimant made a commercial decision more than six years ago to accept Keydata products. It cannot revisit that decision simply because the products later turned out to be poor investments or, as in this case, the product provider collapsed into insolvency.

“The mere fact that Keydata products have led the claimant into an expensive settlement with the FSCS and that the defendant introduced some clients who purchased Keydata products (which the claimant had researched and accepted) does not amount to an act or omission by the defendant that could trigger a claim for indemnity.”

Thomas says: “My advice to any adviser in a similar situation is to challenge the network, because if I do not have to pay, why should anyone else have to?”

In May, Money Marketing revealed a group of 19 former and current Positive Solutions advisers had rejected demands from the firm to contribute to the cost of settling with the FSCS over Keydata.

Whitechurch declined to comment.


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There are 11 comments at the moment, we would love to hear your opinion too.

  1. The crux of the success of the defence appears to be that the product/s in question had been “researched and accepted”, as in approved for use by Whitechurch, allied to its [Whitechurch’s] failure to provide the additional information. It would be interesting to know if the products in question were Lehmann-backed SCARPS or Life Settlement based.

  2. Another misleading headline.

    This is miles away from actually winning in court against HSF and the FSCS.

  3. The similarity is that someone with superior knowledge, almost mystical, has decided the plan was missold without looking at a client file.

  4. Positive Solutions (or whatever they are called these days) are no longer chasing their AR’s for PI costs.

    So it seems that most Networks are doing the decent thing and accepting their responsibility on this matter

  5. Hairy Katz shouldn’t climb trees

  6. Hairy Katz shouldn’t climb trees

  7. @ Harry

    One solitary IFA could have won in court, that is something the FSCS didn’t want to happen.

  8. hectors house – when did PS stop chasing their AR’s for the keydata claim, as I have not read anything in the press.

    can you please point in the right direction.

  9. @ northern IFA

    99% of these cases never make it into the papers, all the networks need is a few mugs to cave in and they are happy as pigs in sh*t.

  10. @ Northern IFA

    Ex PS Chap at our firm had a threatening letter from them about a year ago. He replied saying he would be happy to contest their claim in court, and has heard nothing since?

  11. @Exasperated

    Sorry I’m a bit dense. Don’t understand about climbing trees. (Although I guess I’m a bit past that nowadays – but was pretty good in my young days!)

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