A pension investor has been told he is too late to bring a negligence claim against his former financial adviser. His attempt to seek damages failed because he did not start his claim until thirteen years after he was first aware of his losses. The Limitation Act 1980 puts a six-year limit on the amount of time allowed to people to start a negligence claim unless they were unaware of the negligence or it was deliberately concealed from them.
In 2001 Mr Davy was advised by his financial adviser to switch his pension out of his British Airways final salary scheme into a Skandia personal pension. He was not aware at the time that the Skandia pension was in higher risk investments. The pension did not perform as expected and Mr Davy suffered financial losses.
In 2015 Mr Davy brought a claim of negligence against his former adviser. He said that he had only become aware that he had suffered losses in 2011. He also claimed that the adviser had deliberately concealed the negligence from him at a meeting held in 2006.
Under s14 of the Limitation Act, a person can bring a claim up to fifteen years after the alleged negligence, provided they start a claim within three years of gaining ‘knowledge’ of the negligence. Section 32 of the act also allows claimants to ‘stop the clock’ on the six-year time limit if the negligence is deliberately concealed.
In court, the judge ruled that Mr Davy was aware that the Skandia pension was high risk in 2002. He also agreed that there was no attempt at the 2006 meeting to conceal the negligence. As a result, Mr Davy was out of time for bringing his claim.
“Having a fifteen-year limit on the amount of time a client has to bring a negligence claim is a sensible rule,” said James Burgoyne, Director – Claims & Technical, Brunel Professions. “It gives clients plenty of time to bring a claim but acknowledges that after a certain point matters are so aged that there are real difficulties in establishing what actually happened. The limitation rule also means that firms can plan their insurance and archive old records without the same risk of still facing decades-old claims.”
Brunel secures competitive professional indemnity insurance cover for financial advisers. To find out more call Mark Sommariva on 0203 475 3275.