Routes to financial redress against banks, investment advisers, insurers, mortgage advisers and product providers
By Susanne Muth
This is a wide field and the barristers of No5’s commercial and chancery group frequently advise and act for clients in their claims for professional negligence and breaches of the regulatory regime against their erstwhile professional financial advisers. What follows below are some pertinent and recurring themes encountered in this area of practice.
Investors seeking financial redress for losses suffered may have received advice from an independent financial adviser or a bank or may have bought an investment product directly from a product provider. If a recommendation was made or advice was given in relation to the investment product, the adviser will have come under a duty of care to give that advice with all the reasonable care and skill expected from a competent professional adviser (at the time the advice was given).
Experienced and sophisticated investors will mostly be locked out of relief because the court is likely to find that such an investor would have assumed the risk of incurring trading losses and, absent an express contractual duty, an advisory duty at common law will not be found: Springwell Navigation Corp v J P Morgan Chase. The decision at first instance in Springwell was confirmed in the Court of Appeal and has been followed in a number of first-instance decisions since. A further hurdle faced by the sophisticated investor is the courts’ willingness to uphold the ‘no representation’ and ‘no advice given’ disclaimers in the banks’ transactional documentation, which have the effect of excluding the possibility of any compensation claim for misrepresentation or for breach of an advisory duty: Peekay Intermark Ltd v ANZ Banking Group, Cassa di Risparmio della Republica di San Marino v Barclays Bank, Grant Estates Ltd v RBS (Scottish Court of Session)…
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