Could the decision in Adams v Carey be good news for Pension Trustees and beneficiaries alike? It may not be as not unlikely as it sounds.
According to Benedict Walton, head of commercial dispute resolution at law firm Forsters, providers could now have some peace of mind. “This long running case may have positive implications both for Sipp trustees and investors,” he said. “While the court’s finding that Carey was not liable in respect of the poor performance of Mr Adams’ Sipp will mean that execution–only Sipp trustees are breathing a sigh of relief; this is not a ‘free pass’ because the finding was, to an extent, fact–specific.” “Put simply, if investors use execution–only Sipp wrappers to access more exotic investment opportunities, they won’t be able to rely on Cobs 2.1.1 to bring a claim; and if the investment fails, they should be prepared to take responsibility for that. “However, slightly counter-intuitively, this could actually lead to higher recovery in respect of failed Sipp investments by emboldening Sipp trustees to pursue claims against third parties in respect of failed investments, without having to worry as much about beneficiaries then pursuing them if the claim fails. “Viewed that way, it could actually be a positive development for investors,” he added. But this might not be the end because, with Adams appeal pending, “this tale will have a few more twists”.