The High Court has ruled out the inclusion of windfall payments within pension review calculations in a decision that could cost the financial services industry at least £175m.
The decision, which will also serve as a precedent for FSAVC and mortgage endowment compensation cases, must be accepted by the industry if money cannot be found to fund an appeal, prompting a call by PI insurer Collegiate for an industrywide fighting fund.
Collegiate put up £250,000 for the test case brought by Needler Financial Services against Ronald Taber who was missold a Norwich Union pension. Collegiate managing director Tony Howe says: “We have a month to raise £300,000. If we don't, there will not be an appeal. It is unfair to expect individuals to fund cases like this. We think there should be an IFA legal defence association.”
Pass chief executive Mark Penton says: “Setting up a fighting fund will be harder now, it is like saying we are 1-0 down in the last minute, do you want to back us now?”
Aifa director of policy and technical services Fay Goddard says: “It is a matter for the firms involved to decide whether to appeal. If an action is mounted we would have to look at whether to support it then.”