An attempt by the West Bromwich Building Society to claim compensation for losses that it incurred by the mis-selling of Home Income Plans has failed.
The building society, alongside other financial institutions in the 1980s, promoted and provided mortgage advances as part of the Home Income Plan that was sold by independent financial advisers (IFA).
However, while the Investors Compensation Scheme (ICA) and individuals attempted to recover losses from the West Bromwich Building Society, it sought losses it says it was liable for from solicitors that acted for lenders and borrowers. Defence was conducted by two panel firms of the Solicitors Indemnity Fund (SIF).
Mr Justice Evans-Lombe ruled on 15 January that West Bromwich Building Society was liable because the Home Income Plan had been a joint venture between it and the IFAs.
He also ruled that the solicitor's retainer to the borrower was limited to the legal mechanics of completing the mortgage, which did not include advising on the merits of the scheme.
Jes Salt, assistant claims manager at SIF, says: “This was a major piece of litigation that had considerable potential consequences for the profession both in terms of the sums of money involved and the duties the other parties sought to impose upon solicitors.”