{"id":645,"date":"2018-10-25T14:15:01","date_gmt":"2018-10-25T14:15:01","guid":{"rendered":"https:\/\/www.chrishegarty.com\/?p=645"},"modified":"2018-10-25T14:15:01","modified_gmt":"2018-10-25T14:15:01","slug":"liberty-v-tancred-a-rare-glimpse-inside-a-poor-financial-advisory-firm","status":"publish","type":"post","link":"https:\/\/chrishegarty.com\/?p=645","title":{"rendered":"Liberty v Tancred \u2013 a rare glimpse inside a poor financial advisory firm"},"content":{"rendered":"\n

The Commercial Court has given some recent insight into what goes on behind the scenes at a poor financial advice firm \u2013 Liberty Partnership Ltd v Tancred [2018] EWHC 2707 (Comm)<\/a><\/p>\n\n\n\n

Mr & Mrs Tancred ran GD Tancred Financial\nServices Ltd for many years and, in 2007, sold it to Liberty\nPartnership Ltd. After the sale a number of complaints arose from\npast business costing Liberty quite dearly.<\/p>\n\n\n\n

When selling the business the Tancreds had to make\nwarranties and assurances regarding the work they had done as this\ncan affect the new owners. These are fairly ordinary warranties in\nthis type of transaction and for a well run business do not present\nany major issue.<\/p>\n\n\n\n

However, Mr & Mrs Tancred are alleged to have\nbeen less than forthcoming regarding complaints and regulatory\ncompliance issues they had faced. This has had consequences for\nLiberty and would have affected the sale price.<\/p>\n\n\n\n

The case heard so far is a preliminary issue to\ndecide if the case has been brought inside the time limits. Liberty\nhad to prove that the Tancreds wilfully concealed (or were otherwise\nfraudulent or dishonest) in respect of each matter complained of in\norder for the time limits not to apply and the claim to be brought.\nThis is an ordinary feature of English law designed to ensure that\nthe dishonest and fraudulent cannot rely upon a time bar arising out\nof their dishonesty or fraud. It is accepted that the standard of\nproof is unchanged from the ordinary civil standard but that there is\na reluctance to find dishonesty without clear evidence. So the court\ndetermined that the important questions it had to answer were:\n<\/p>\n\n\n\n

  1. \n\u201cWhether there was wilful concealment\n\tof the FSA letter dated 24 June 2005 and the letter in response\n\tdated 4 July 2005.<\/em>\n\t<\/li>
  2. \nWhether there was wilful concealment of\n\tthe true extent of Ms McKenna’s involvement in the Company’s pension\n\ttransfer transactions.<\/em>\n\t<\/li>
  3. \nWhether there was wilful concealment of\n\tbreaches of a warranty stating that 360 Services had assumed\n\tcompliance of all income drawdown products sold by the Company.<\/em>\n\t<\/li>
  4. \nWhether there was wilful concealment of\n\ta failure to comply with an FSA requirement that the Company should\n\tsend a letter “in a form\u2026 signed off by an external\n\tcompliance consultant, and to the satisfaction of the FSA, to all\n\texisting income withdrawal customers\u2026”<\/em>\n\t<\/li>
  5. \nWhether there was wilful concealment of\n\tcomplaints alleged by the Claimant to have been made before the SPA\n\tby customers surnamed Aldous, Fox, Holling, Isaacs, Johnson, Smith\n\tand Vickers.<\/em>\n\t<\/li>
  6. \nWhether there was wilful concealment of\n\tmatters which eventually gave rise to complaints made after the SPA\n\tby customers surnamed Allen, Bloodworth, Clarke, Drury, Holloway,\n\tHornsby, Lingard, Smalley, Smith, Trout, Upex, Vesty and Vickers.<\/em>\n\t<\/li>
  7. \nWhether any claims which I may find to\n\thave been wilfully concealed under the various issues just\n\tidentified will not only be outside the contractual limitation\n\tperiod (by reason of the wilful concealment) but will also entitle\n\tthe Claimant to pursue other similar claims.\u201d<\/em>\n<\/li><\/ol>\n\n\n\n

    This does mean that the court has to hear the\nsubstance of the case, that is whether or not the Tancreds are in\nbreach of the sale agreement, but that a swathe of key findings have\nbeen made regarding what occurred. Ultimately the court allowed iii\n<\/em>through v<\/em> to proceed to full trial.<\/p>\n\n\n\n

    From a consumer perspective the exploration of how\nthe Tancreds ran their business improperly is most useful. It is far\nfrom uncommon to see allegations that what the paper file provided by\nan advisor says against what the consumer says occurred. Mr Tancred\nwas referred to by the judge (at paragraph 137) as a fast-talking\nsalesman who failed to recognise that complaints were upheld because\nthey were his fault and the FSA and consultants had identified\nproblems with how he acted. The judge acknowledged (at paragraph 155)\nMr Tancred\u2019s utter incomprehension of his own fallability and noted\nthe Mr Tancred would have wrongly rejected complaints which were\nlater upheld by the FOS.\n<\/p>\n\n\n\n

    This type of fast-talking salesman is,\nfortunately, not too common these days. However, that kind of\napproach has in the past caused significant losses for clients. The\nlack of proper complaints handling has left many people feeling\nunable to do anything \u2013 when in fact the duty on a firm is to\naddress the complaint and consider it properly, and then to signpost\nthe FOS.<\/p>\n\n\n\n

    The complaints where Mr Tancred was wholly failing\nto acknowledge his culpability or the possibility he was wrong could\nnot proceed as the court could not find he wilfully concealed\nsomething he did not acknowledge.<\/p>\n\n\n\n

    However when it came to consider the obligation\nfor a pension transfer specialist to approve any pension transfer\nadvice (point iii<\/em>); and the later involvement of compliance\nconsultants in relation to income drawdown advice (point iv<\/em>)\nthere was good objective evidence from the external parties which\ncontradicted the Tancred\u2019s case and the judge found that there had\nbeen deliberate concealment.\n<\/p>\n\n\n\n

    With both of these external consultants Mr Tancred\nwas obliged to have them approve specialist types of advice. The\njudge found that whilst some cases were certainly sent to be approved\nthat none of them actually received approval from the external\nconsultant. Furthermore that a lump sum cheque was produced very late\nas if to pay the pension consultant for approving advice \u2013 when the\nTancreds were claiming that individual payments had been made by\ncheque for each case. This was particularly unimpressive as it was\nfound to be a step to create a false paper trail.<\/p>\n\n\n\n

    The other issue which will proceed is that the\nTancreds were required to write to all their income drawdown clients\nin terms ordered by the FSA to tell them that they could rearrange\ntheir drawdown arrangements at no cost. Liberty brought several\nwitnesses who were supposed to receive this letter \u2013 none of them\nhad done.\n<\/p>\n\n\n\n

    Ultimately, the judge was compelled to find that\nwhere he could not discern wilful concealment that the claims were\noutside the time limit. Therefore the trial will be about the\npension transfer consultant, the compliance consultants and the FSA\ndisciplinary action mailshot<\/p>\n\n\n\n

    This is a particularly egregious example of\nmisbehaviour but, shows that fast acting clients who pressed their\ncomplaints to the Financial Ombudsman did obtain effective redress.<\/p>\n\n\n\n

    If you are unsure about a complaint it is vital to\nget good advice from an experienced financial services and pensions\nbarrister quickly to protect your position.<\/p>\n","protected":false},"excerpt":{"rendered":"

    The Commercial Court has given some recent insight into what goes on behind the scenes at a poor financial advice firm \u2013 Liberty Partnership Ltd v Tancred [2018] EWHC 2707 (Comm) Mr & Mrs Tancred ran GD Tancred Financial Services Ltd for many years and, in 2007, sold it to Liberty Partnership Ltd. After the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-645","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/chrishegarty.com\/index.php?rest_route=\/wp\/v2\/posts\/645","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chrishegarty.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chrishegarty.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/chrishegarty.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/chrishegarty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=645"}],"version-history":[{"count":0,"href":"https:\/\/chrishegarty.com\/index.php?rest_route=\/wp\/v2\/posts\/645\/revisions"}],"wp:attachment":[{"href":"https:\/\/chrishegarty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=645"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chrishegarty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=645"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chrishegarty.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=645"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}