Corporate & Professional Pensions Limited

The Self-Invested Personal Pension (“SIPP”) operator Corporate & Professional Pensions Limited (“C&PP”) entered into administration on 1 February 2022. Smith & Williamson LLP has been appointed as the administrators.

The Financial Conduct Authority (“FCA”) has announced on its website that the administration is a result of C&PP being unable to pay Financial Ombudsman Service (“FOS”) final decisions related to the lack of due diligence completed by C&PP prior to its acceptance of high-risk and non-standard investments into its SIPP.

Furthermore, it is understood that existing complaints currently lodged at the FOS are potentially going to be moved to the Financial Services Compensation Scheme (“FSCS”). The FSCS will then investigate whether there are any claims that meet its qualifying conditions for compensation.

The FSCS may award compensation because of a SIPP operator’s lack of due diligence on an unsuitable investment. We have already been successful in many cases where SIPP operators have overseen high risk pension investments into foreign land investments, property developments, storage units, carbon credits and other high-risk and illiquid investments.

Typically, the FSCS will calculate an award of compensation on what is known as a, ‘money in-money out’ approach. Broadly speaking, an award is usually equal to the price the investor paid for the investment(s), plus the SIPP fees and charges they paid, less any income they received from the investment(s).

We are currently acting for clients who have suffered losses on pension investments with C&PP. Our expertise in this sector is well documented and demonstrated by our representation for the successful claimant in the ground-breaking case of Adams v Options UK Personal Pensions LLP [2021] EWCA Civ 474.

Following the Court of Appeal’s Judgment in Adams, we believe that the FSCS should also uphold claims against SIPP operators for compensation to be awarded pursuant to Section 27 of the Financial Services and Markets Act 2000 (a “Section 27 claim”).

In brief, the basis of a Section 27 claim is that, because a SIPP has been established as a consequence of advice given by an unregulated introducer, in contravention of the ‘general prohibition’, the investor should be entitled to ‘unwind’ the establishment of the SIPP and be put back into the financial position they would have been in had they never transferred their previous pension into the SIPP in the first place, nor made their investment(s).

A successful Section 27 claim results in much higher awards as it compensates the pension holder for not just loss of money invested but loss of what the SIPP would be now worth if properly invested (i.e. loss of investment opportunity). A successful Section 27 claim requires specialist legal representation and experienced evidence gathering that we can offer.

Whether or not a claimant can demonstrate on the balance of probabilities that liability is owed to them in respect of a Section 27 claim – and the compensation which follows any such decision – is a hugely complex and fact specific area.

The Court of Appeal in Adams was concerned solely with the actions and conduct of a specific unregulated introducer, CLP Brokers (“CLP”). After undertaking a detailed analysis of the business practices undertaken by CLP, as well as its specific involvement in bringing about the transactions by which Mr Adams transferred his pension into the SIPP, the Court of Appeal was satisfied that CLP was carrying on regulated activities, in contravention of the general prohibition.

The FSCS will, therefore, need to consider the particular facts of each case, including evidence of the conduct of the unregulated introducer involved and its involvement in an investor’s pension transfer, in order to determine whether a Section 27 Claim is established in the particular circumstances of the case.

As the claimant, the onus is on you to provide sufficient evidence to the FSCS in order to discharge this burden of proof.

If you were advised by an unregulated and unauthorised introducer to establish a C&PP SIPP and invest into a high risk, unregulated funds and asset classes, there may be grounds for you to successfully pursue a Section 27 claim at the FSCS and recover increased compensation as a result.

We would like to hear from anyone who this may apply to. We may be able to assist you in bringing a No win, No fee claim to recover your full losses.

Please call us on 0800 152 2620 for further advice, or fill in the form and one of our Solicitors will call you back at a convenient time.