In this blog we look at the recent High Court decision in Davy v 01000654 Ltd in which the Court considered whether a claimant was out of time to pursue a claim against a financial advisor relating to alleged negligent pension advice.
My Davy (the Claimant) sought damages for negligence or breach of contract, or for alleged breaches of duty that were said to be actionable under the provisions of the Financial Services and Markets Act 2000, for losses which were said to have arisen as a result of him making a switch of pensions in late 2001.
Mr Davy sought to hold the Company who had advised him liable for those damages on the basis that, in the course of its business as an authorised independent financial adviser and acting through its Managing Director (Mr Pickering who had provided Mr Davy with financial over many years previously), it gave advice which led to that switch of pensions.
The claim was for losses allegedly suffered as a result of the Company’s advice which led Mr Davy to transfer out of his occupational pension scheme with British Airways (a defined benefit scheme) into a personal pension scheme with Skandia Life. The transfer took place on 2 November 2001 and the Company’s advice which preceded it is reflected in the terms of Mr Pickering’s lengthy letter dated 26 September 2001, referring to a 6 hour meeting with Mr Davy on 18 September 2001.
What the Court was being asked to consider?
The application that was considered by the Court was not concerned with the merits of Mr Davy’s Claim that he was negligently advised by the Company in relation to the transfer of his pension but whether Mr Davy’s claim was time barred.
The Judge (considering the application in 2018) noted that the claim was ‘very stale’ in that it had been issued by Mr Davy on 16 January 2015.
The Judge further commented, ‘Its staleness is illustrated by the Company’s present, numerical style which is a reflection of the fact that, on 20 March 2012 and before Mr Davy issued his Claim, the Company – until then incorporated under the name of Heather Moor & Edgecomb Limited – was dissolved, having previously been struck off the Register of Companies. As I understand the position, the Company had ceased to carry on business at some point before 2012’. Prior to issuing the claim, Mr Davy had successfully applied to have the Company restored for the purposes of bringing his claim.
Given the pension transfer had originally taken place in 2001 (and therefore Mr Davy was outside the 6 year statutory time limit for bringing a claim), Mr Davy alleged that he had only discovered the Defendant’s alleged negligence in July 2011 and therefore he would have had until July 2014 to issue his claim. It was agreed between the parties that they would enter into a 6 month Standstill Agreement in July 2014, which effectively stopped the limitation clock and would allow Mr Davy to issue his claim in January 2015 at the expiry of the Standstill Agreement.
Mr Davy issued the Claim form in time in January 2015, however the issue to consider by the Judge was whether Mr Davy had gained knowledge of the Defendant’s negligence prior to July 2011.
S14 and /or S32 of the Limitation Act 1980
Mr Davy was bringing his claim under S14 and /or S32 of the Limitation Act 1980 which allows claimants extensions of time outside the initial 6 year time limit (subject to the individual facts of the claim).
S14 of the Limitation Act 1980 (which only applies to claims in negligence) provides that a claimant can bring an action outside the 6 year statutory limitation period (with a 15 year long stop period from the initial date of negligence), but that the claim must be brought within 3 years from when the claimant gained knowledge required to bring such an action.
S32 of the Limitation Act 1980 operates to postpone the running of the primary limitation period in a case where “any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant.” The period does not begin to run until the claimant has discovered the concealment or could with reasonable diligence have discovered it.
In regard to S14, Mr Davy had made a complaint to the Financial Ombudsman Service in July 2011 and it was found by the Judge that Mr Davy had gained knowledge prior to July 2011 regarding the Defendant’s alleged negligence.
In regard to S32, the Judge ruled that in his judgment (in relation to the specific facts of the claim), the Defendant was not guilty of deliberate concealment.
Consequently Mr Davy’s claim was struck out as being time barred as a result of the above findings.
It is imperative to act as soon as you discover a potential negligence (especially one relating to financial advice) to ensure that you are not statute barred from bringing a claim. Pursuing professional negligence claims and identifying time limits in accordance with S14 and S32 of the limitation Act 1980 can be complex issues to consider and it is always best to seek legal advice prior to pursing a claim for negligence.
Jordans Solicitors have an experienced professional negligence department that can advise if you are considering pursing a professional negligence claim. Click the link below for more details.