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Neil Liversidge follows Lakey in billing claims firm over £3,800

West Riding Personal Financial Solutions managing director Neil Liversidge has written to a claims management company demanding it pay over £3,800 for wasting his time to investigate a mortgage misselling claim, or face court action.

Liversidge has asked Money Claims UK to refund him the money lost through investigating a claim of mortgage misselling in August 2012.

The claim was rejected by West Riding and no appeal was submitted to the Financial Ombudsman Service.

Liversidge claims West Riding lost £2,861.25 through time spent investigating and rebutting what he terms the “groundless” complaint.

Liversidge said he spent almost 15 hours of his own time investigating the claim, and three and a half hours of his PA’s time. He says his own time is charged out at £175 per hour and his PA’s at £80 an hour.

He is also claiming for a further £1,000 to compensate for upset and distress caused to him and his family as he was forced to investigate the complaint while on holiday.

Liversidge says he will commence court action against Money Claims UK if it fails to respond to the letter in the next 28 days.

In the letter, he says: “We were forced to devote our time to investigating and disproving your allegation. This involved my personal assistant’s time and my own.

“Your complaint, coming at the time it did, disrupted my annual holiday in Italy much to my inconvenience, anxiety and distress, and that also of my family.” 

Last month, Money Marketing revealed that Highclere Financial Services had been awarded £340 through the small claims court after contesting a payment protection insurance misselling claim from a claims management firm.

Claims firm Aims Reclaim was forced to pay Highclere partner Alan Lakey £100 for wasting his time and £240.20 in legal costs.


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There are 30 comments at the moment, we would love to hear your opinion too.

  1. I would draw your attention to the FSA intranet pages providing help to IFAs, specifically which covers this issue. I have no doubt this helpful stance/comment has long since been removed for that very same reason. However here it is reproduced for all to see:

    We recognise (FOS/FSA) that frivolous or vexatious complaints may raise unnecessary administrative burdens for both firms and the FOS alike. In these circumstances, we think it would be legitimate for firms, through their terms of business, to seek to reclaim costs and expenses reasonably incurred by the firm as a result of defending these complaints through the FOS.

    The question of what is frivolous or vexatious would need to be determined on a case-by-case basis; this would undoubtedly only be in a very small minority of cases. Our starting point would be that, if the FOS did not dismiss a case during its initial review under rule 3.3.1(2) of the FSA Dispute Resolution: Complaints manual, the claim should not be regarded as frivolous or vexatious.

  2. @Simon, you are correct, the FSA appear to have removed the link. Funny that. Was there any consultation on something else being changed/removed? I seriously doubt it.

  3. @ Neil – Good for you. I look forward to their out of court settlement although I’d prefer to see them contest it and LOOSE.

  4. £3,800 may be a bit ambitious, but I’d love to see him get it. All power to your elbow, Neil.

  5. These complaints are not victimless crimes. The cost of defending them has to be met.

    That is a clear conflict of interest. Should a firm’s honest customer’s be expected to meet costs incurred by those who seek to defraud it?

    Peter Hamilton wrote an excellent article on those who use deception and/fraud to pursue groundless complaints last month. In the comments I asked if that meant an IFA could sue such a performance and he replied that he thought the answer was “yes”.

    I think the FCA could intervene and try to stop that happening but only by forcing a firm to abandon Principle 8 and abandoning its own duties under Section 6 of FSMA.

  6. Alternatively Neil – if they don’t pay within say 90 days – just put in a winding up order. That should wake them up. Pity your claim didn’t have a couple of zeros added.

    Sock it to ’em son!

  7. Different Point of View 25th November 2013 at 8:38 pm

    I have to say that the action taken and the amount demanded show a huge amount arrogance! What if the claim company agrees to pay and then sues the original client for their losses for providing false information. I fear that is more about somebody looking big than somebody who cares about their clients!

  8. Neil F Liversidge 25th November 2013 at 9:56 pm

    I have to be honest: If they offer a reasonable settlement out of court I shall be deeply disappointed. I opened our file in its entirety to a few selected people including a lawyer, a journalist and a compliance consultant. All were amazed the claim was ever filed. MCUKL don’t have a leg to stand on and I am SERIOUSLY looking forward to a scrap!

  9. Good luck Neil, having just had a frivolous complaint in recently I will be keen to hear the outcome – my costs need to be met too

  10. Whilst I am all in favour of an end to frivolous and vexatious claims, I find it very surprising that a case that was apparently so clear cut took 15 hours of an adviser’s time to investigate – (although I would caveat that this is an opinion based on other cases having not seen either Neil’s file or the complaint itself.)

    It also very important to distinguish between complaints that are frivolous and vexatious and those which are merely rejected. Whilst the majority of cases are (or should be) clear cut there will always be complaints to which the outcome is a matter of opinion and even where the complaint is declined it was brought in good faith with a realistic chance of success.

  11. Neil F Liversidge 26th November 2013 at 11:22 am

    @CMC Manager: We are thorough, as any CMC that takes us on will find to their cost.

  12. Dear CMC manager so I don’t suppose that any trawling goes on in your industry with recorded voicemails badgering consumers, that go on to ruin relationships with clients that has taken many years to develop. I had 2 over the weekend. The we’ll give it a go and see what happens attitude that ambulance chasers have doesn’t apply to you…. No I thought not.

  13. @NB – the poster who refers to themselves as CMC manager actually seems quite a decent fellow and I would personally use them if the FOS couldn’t do the job to my satisfaction but only after considering mediation.
    One or two bad apples either IFA or CMC just have to be removed so the barrel doesn’t turn to cider (mind you I like Cider)

  14. @Neil

    I am also all in favour of being thorough, which is why our organisation’s paths are unlikely to cross.


    The company I work for has never cold called a customer and never sent a text message nor do we buy/sell/ exchange leads from any third party. We work only with customers who have responded t our advertising and returned a signed contract. If you look at my previous comments you will find I favour an outright ban on cold calling and not just for PPI. As I frequently re-iterate a professional IFA is unlikely to ever hear from a professional CMC. If you are unhappy with many others in the CMC industry, then you share my position, however can I suggest that sharing your views with the MOJ via their online consultation as suggested by Alan Lakey is probably a more useful method than inaccurate comments directed at me.

    @Philip Castle – thanks for the kind comments, however given your occupation, we would be unlikely to accept you as a client.(No offence intended) In the unlikely event that you had PPI, we would take the view that you really should have known better

  15. Neil F Liversidge 26th November 2013 at 10:07 pm

    @ CMC Manager: I think we are getting to the root of this. A lot of CMCs think they are entitled to simply issue claims willy-nilly without doing due diligence to ascertain whether their clients have a prima facie case. That involves the adviser in expense – because time is money – from minute one. It seems to me therefore that every adviser who successfully defends a claim launched by a CMC, or has claim abandoned, should sue via the small claims track for their full costs on their normal charge-out rates. In default of robust action by the FCA, MoJ et al, we obviously need to litigate CMCs to death. Hurrah for the small claims track I say.

  16. @Neil

    Whilst I agree with you to a point, I do think it is important to differentiate between an ill-researched and ill advised claim which has clearly been made with no form of due diligence and a reasonable claim which is declined on the balance of probabilities. i.e, a case where both parties make valid points around the sale and in the view of the claimant the points s/he raised outweigh the points raised by the defendant and the defendant takes the opposite view.

    Dealing with reasonable complaints should be a legitimate part of any business, the issue comes when the complaints have little or no basis in fact.

    I have no issue with advisers issuing claims through the courts as this will benefit the industry I work in by litigating out of business competitors who provide a poorer service to their clients. This can only be in the best interests of CMC’s, the Financial Industry as a whole and most importantly the customer.

  17. Different Point of View 27th November 2013 at 9:27 am

    @ Neil

    What will happen when the CMC start to sue their clients for providing false information to recover the costs? Sorry I feel that your claim is too high and shows a huge degree of arrogance. If I were a client of yours I would have to be concerns that any compliant will lead to a charge for wasting your time if it is not upheld. If this becomes the standard situation then we will lose the confidence of consumers who will be scared that even if mis-advised they may not be able to afford to make a compliant.

  18. A complaint when investigated properly can take a great deal of time. Quite often it is a senior member of staff and in our case would be a Director. And it should be remembered that time spent dealing with the complaint is chargeable time lost. It is not time that forms part of the Manager’s fixed costs. To record, respond, investigate and report back can take two days. And the hourly rate is high because that is the true cost of giving good financial advice.
    The problem which strikes me is that you do have to be careful that you do not place unreasonable barriers for a client who genuinely feels (even if misinformed) that he has a complaint at which point the FCA would intervene.

  19. @Different Point of View

    I think there’s been a slight drift off topic. I don’t think anyone has a problem with a client making a complaint. Should a client feel hard done by or feel the need to complain then they should be contacting the adviser directly. I would imagine that most advisers would try to resolve the complaint there and then without the need to involve anyone else i.e. CMC’s or the FoS.

    The issue around recovering costs from a CMC (i believe, please correct me if i’m wrong) is that the complaint has come out of nowhere with no previous contact from the client and the complaint is based on facts that are incorrect. Surely it is the job of the CMC to investigate whether or not a complaint is justified, should they send a fishing letter to an adviser and expect them to do this for them then it is reasonable for the adviser to try and recover their costs.

    All the above is my humble opinion only.

  20. @different point of view.

    If somebody makes a complaint that they know to contain lies, in order to try and seek financial gain, then they lose the right to be treated fairly or reasonably as they are a liar! If they make a complaint that they feel to be genuine and can support such a claim, then where is the problem? Isn’t that what the ombudsman is there for anyway? (cue CMC manager).

    I am not sure whether you have ever been on the receiving end of one of these complaints, but I am confident that you would change your view if someone was trying to slip their hand into your pocket and steal your hard earned income.

    As for the firms that bring the claims forward, well it is common sense that they check fully their complainants story and yes, if they feel that they have been duped, then they should take that up with their customer. As for the adviser, they should charge to the full extent of what they feel they are owed, we are not charities and have better things to spend our time on, for example looking after the needs of clients who require our services.

  21. @Nick Wardle

    I am in agreement with you. However it is very important to differentiate between CMC complaints where a shoddy template letter is sent and those where a valid, factually accurate and well presented argument is presented and in response the adviser disagrees and presents a slightly better argument to reject the complaint which on the balance of probabilities the CMC accepts.

    Surely, it is better that CMC accepts a valid defence to the complaint rather than automatically escalating to FOS

    (From Neil’s comments it would appear that this case would certainly not fall into this category)

  22. Different Point of View 27th November 2013 at 12:40 pm

    @ Steve D

    Yes I have had these types of complaints and believe that like all clients they should be treated fairly. Yes I agree that the CMC should have duty of care to check the facts. As far as stealing hard earned cash, I have seen enough cases where clients have paid through the nose for poor advice, but would not complain despite huge losses. Therefore we need to get the correct balance, but charging huge fees and claiming compensation it not the way forward in my opinion, though based on the charges and compensation claimed by Neil – Lloyds would be entitled to billions!!!!

    @ Nick

    I agree without the facts about the case should not make comment, but given the claim for compensation is based on the fact the compliant arrived when Neil was on a family holiday, it is clear that the CMC should have contacted Neil to ensure their letter was sent at a time which suited him! Glad Neil can afford such long holidays that he had to reply to the compliant during the holiday.

  23. Neil F Liversidge 27th November 2013 at 12:50 pm

    @ Different Point of View: In the nearly ten years since we founded West Riding we’ve had three complaints. This one (totally speculative – an attempted legal mugging) plus two more in the days when we did mortgages. Both of those only arise when, after asking to client politely for six months after completion to pay our £295 arrangement fee, we sent letters before claim. We then dealt with both complaints (try-ons) and neither went to the FOS because, like this one, they had not a leg to stand on. Despite both being frivolous I didn’t sue either client and it would take a lot for me ever to consider doing so. Where CMCs are concerned however, the modus operandi seems to be along the lines of “Sign here guv, I’ll get you some free money and keep 35% myself.” In other words they seem to regard a client’s signature on a claim form as a licence to obtain money by any means they can concoct. Now, such activities may be conducted on paper by men in suits working in offices but personally I do not regard them as being in any way different from the would-be mugger who once waved a silly little knife in my face and demanded my wallet. He had his head introduced to the pavement for his trouble. CMCs who try to mug me will suffer the small claims track equivalent. If it’s arrogant to assume I have the right to defend myself from those who think they can take from me what is rightfully mine, fine – I’m arrogant. As for clients, I have around 1600, all very happy thank you very much, but I do have certain rules about who I take on. I might write an article on the subject in a future column.

  24. Different Point of View 27th November 2013 at 1:39 pm

    @ Neil

    While I believe you have a right to defend yourself, the response should be reasonable. Whilst I agree that the person who attempted to mug you was a criminal and wrong, your response of introducing his head to the pavement, would seem a little extreme and equally wrong. I have the same sentiments to the action you are taking in response to the CMC, the claim seems high and unreasonable, but from your prior actions it is clear you believe that it is reasonable to behave this way.

  25. Neil I am with you on that one. I had a fellow Sargeant pick a fight with everyone when he was drunk on exercise once, I was the last one to walk in to his attempt at picking a fight,was sober, and had been up for nearly 24 hours, so when he went for me I put him down until he stopped getting up and then get HIM charged We both got disciplined ( I asked to be charged, everyone else wanted it hushed up) he got fined, I got told not to be a naughty boy officially and a slap in the back unofficially. Sad as he was actually a mate when sober, but frequently attacked people when drunk.

  26. @CMCmanager – because of client experience of FOS delays, we have a mediation paragraph built in to our client agreements requiring this before action. How would you react if a firm said they wanted the case handled through mediation rather than the FOS, YOU or the courts?
    Interested to know your position on this. As if we entered mediation we,d soon know if a case was vexatious.

  27. Neil F Liversidge 27th November 2013 at 4:32 pm

    @ Different Point of View: YES, when a glue-sniffing would-be mugger waves a knife in my face and demands my wallet, I do think it reasonable to defend myself. What would you do – negotiate on how much he robs you for? I think you need to re-read my post. As for my claim, we charge our hourly rate. The FCA likes fees so no doubt it’ll get me a few brownie points. Nemo me impune lacessit.

  28. @Philip Castle

    We would as we do with all responses to complaints we submit, discuss with our client what had been suggested, give our client our views of the pros and cons of this and take their instructions accordingly as to how they wished to proceed.

    Providing that this was a suitably qualified mediator and both parties agreed to be bound by the outcome I would be likely to recommend as the clients best course of action.

  29. @CMC – Our client agreements commit both parties to mediation using a CEDR trained and approved mediator. We quote a named mediator and a substitute can be inserted by mutual agreement.
    We’ve never had a complaint go to mediation, let alone the FOS (disappointingley as the FSCS subverted mediation with Keydata complaints of which we had none and stood in the clients stead when in fact complaining about Keydata and the FSA’s own failures)
    I’ve onlt eve had one complaint which came via a local solicitor and the former client had already compaliend about their previous solicitor, forgot to tell their new solicitor that like stockbrokers, we record ALL phoen calls an in our case client meetings to and hence the letter drafted by the solicitor could be proven to be a fabrication and the only question was whether the former client had concocted it or the solicitor.
    I gave the solicitor the benefit of the doubt and didn’t report him to HIS professional body )although he has since for fee irregularities I hear) and I didn’t take issue with the former client as she was getting increasingly confused and although her daughter had been present at all meetings, because her mother was bullying her stepped back from actually telling the solicitor that was the case.
    She then complained about her new adviser (someone I know) before moving on to her next victim.
    She had been introduced to me originally by another solicitor due to an error made by her previous solicitor and because she didn’t have a good word to say about ANYBODY, she was actually the reason why I started recording all client meetings immediately after our first fact finding meeting! Thank goodness I did!
    As to the cost to me. i was up at night on several occasion trawling through my notes and recordings and it was hell, so I think Neil’s bill is a little on the light side and he is letting the CMC off easily. I will not again.
    English Law _ He who asserts must prove – If you can’t prove it, don’t make public statements until the case has gone to FOS and/or the law or be prepared for a counter claim.
    No clients have to deal with Neil or I. They always have the choice of going to the banks…… oh I forgot they’ve all pulled out of giving “advice”

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