Following allegations of negligence by a private investor in connection with the management and putting into effect of investment decisions by an investment management business, B P Collins’ Simon Carroll, senior associate in the Dispute Resolution group acting for the investor, successfully procured a satisfactory settlement.

Many a private investor will know the time pressure associated with ensuring tax efficient trust vehicles are utilised within deadlines imposed by the financial year.  This case concerned a private individual who, upon receipt of a windfall sum, took steps to invest in tax efficient vehicles so as to maximise his investment return and to secure a tax rebate which, for reasons specific to his personal circumstances, was only recoverable following an investment made in a particular tax year. 

The rebate would have been considerable, but the chance of its recovery was lost after it transpired that the investment management business had failed to effect the investor's investment choices before the end of the relevant tax year.  It transpired (on the investor's case) only after the end of the tax year that the management business had been unable to comply with deadlines given by its sales personnel as to the final time by which it needed instructions to progress the investor's applications, and also that certain selections of fund advised and advertised as available had in fact been fully subscribed for a considerable period of time and were thereby unavailable in any event.

After setting out his claim in detail, together with evidence of the management business' failings and the consequential tax losses  incurred, the company’s denials of liability were followed by a process of negotiation and the reaching of beneficial settlement terms, the precise nature of which remains confidential. 

An interesting feature in this case concerned the management business' attempted reliance on the Ombudsman's findings, which followed a partially unsatisfactory complaint and appeal process instigated by the investor in an early effort to resolve matters. Whilst undoubtedly a helpful process for resolving mass customer service disagreements, an ombudsman is not a substitute for legal proceedings: such processes typically do not involve detailed  consideration of legal and evidential issues, take due account of a party's legal liability and entitlement to damage, and are typically not binding on a consumer without their express agreement.

Whilst this outcome is a positive one, investors should be wary of their ability to progress claims in such circumstances. Were it not for this investor’s distinct personal circumstances it is unlikely that the tax losses would have been legally recoverable. Concerned investors should be wary of such issues, and indeed the effect of allegations of contributory fault, which in both instances are likely to factor into the merits of any settlement or outcome, and preferably before accepting an arrangement with binding consequences.

If you would like any further information in relation to this dispute or to discuss claims of a similar nature, please contact

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